BDO Securities Corp. asked investors to ride the volatility in the equities market by focusing on quality names in consumer, banks, property and conglomerate sectors.
BDO Securities said in a statement Thursday that while elevated inflation remains the key risk for equities and earnings growth—as it erodes consumers’ disposable incomes, investor risk appetite and overall business sentiment—investors can look at stocks with strong balance sheets and resilient business models.
“Given the uncertain macroeconomic backdrop, we suggest investors to consider quality names in consumer, banks, property, and conglomerates, or sectors which we expect to still benefit from positive reopening dynamics and offer healthy earnings growth at reasonable valuations. Several of these names are also trading at deep discounts and are good value recovery plays, in our view,” said BDO Securities head of research Abigail Chiw.
Chiw said investors could look for stocks that offer products and services with enduring demand and cost pass-through structure as these are better positioned to manage inflation headwinds.