Fear not the dip: BDO says to buy stocks during Ghost Month

MANILA  -BDO Securities, the stock brokerage arm of industry giant BDO Unibank Inc., is calling on fearless investors to “buy the dips” during Ghost Month as it maintains its year-end target of 7,700 for the benchmark Philippine Stock Exchange index (PSEi).

If reached, the target offers an upside of about 22 percent from the current level.

John Michael Raz, BDO Securities head of online sales, said in a statement on Wednesday that investors should not fear the Ghost Month, a Chinese festival usually associated with having bad luck, and instead use the period to go bargain hunting.

The 2023 Ghost Month runs from Aug. 16 through Sept. 14.

“While historically weak, investors should take it as an opportunity to buy the dips and initiate positions in their favorite stocks. For a lot of investors, they see weakness as an opportunity to even improve their cost,” Raz said.

“Making investment decisions based on sound research, diversification and long-term goals are crucial, regardless of the time of the year,” he added.

BDO Securities remains bullish on the financial and power sectors and select conglomerates.

“We suggest investors look at sectors that can sustain earnings growth. We continue to prefer the financials sector on the back of still healthy loan growth and improving lending margins,” Raz said.

“We are also bullish on the power sector which is seen to benefit from inelastic power demand and higher spot market prices. We also like conglomerates with consumer-centric portfolios that benefit from the country’s economic resilience,” he added.

Lower trading volumes continue to weigh on the market and its various stakeholders, including brokerage houses. BDO Securities, however, noted that current conditions could also offer trading opportunities.

“For active investors who like trading, a flat market offers an opportunity to trade in and out of a well-established range—buying near support and selling at or near resistance. A down market doesn’t mean no opportunities to make decent returns. Rather, you just need to be more selective of the stocks to buy and manage your expectations in terms of returns,” Raz said.

“For investors with a long-term view, our comprehensive research coverage provides up-to-date fair value estimates. This aids our clients in identifying opportunities at bargain prices,” he added.