Foreign Financial company tags 'Philippine Stocks Are the World's Best Performers Right Now'

Foreign Financial company tags 'Philippine Stocks Are the World's Best Performers Right Now'



The Philippines is not only resilient , its stocks are off to a roaring start this year-2019.
The Philippine Stock Exchange Index is beating all its global peers. Its been climbing for a third straight session, having a gain this year to about 4 percent, the second best performer among the global equities indices tracked by Bloomberg.
(photo credit to Bloomberg)

As of the end of Friday’s business the PSEi climbed 1.1 percent  to 7,761.11 , as inflation the major reason that sank the market into bear territory in 2019 , cools down.
The government just announced that the December inflation slowed down at 5.1 percent, the weakest since May.
“The significant slowdown in inflation confirms the outlook that the central bank will not raise interest rates in the first half and strengthens expectations of a cut in reserve requirement," said Rachelle Cruz, analyst at AP Securities Inc. “Considering that the macro concerns that plagued 2018 have moderated, market sentiments should improve from here on."
The PSEi sank at 13 percent in 2018, its worst year was recorded last 2008.
The better than expected fourth-quarter GDP growth and double digit growth in corporate earnings could propel the Philippine Stock Exchange Index to retest 8,000 in the first half barring any worsening in the global environment, particularly regarding the U.S.-China trade tensions and a rebound in oil prices, Cruz said.
The 8,000 level could be hit “sooner than later if the index convincingly breaks" its resistance at 7,800, according to BDO’s chief market strategist Mr. Jonathan Ravelas.
Cruz, further adds that the “Cooling inflation combined with the spillover effect of campaign spending for the May elections on household spending should extend the rebound for consumers stocks”
Currently, the PSEi is trading at 16.3 times 12-month estimated earnings, compared with its 17.6 times five-year average. The multiple hit a peak of 19.85 times in January 2018 before investors started dumping Philippine equities.
“Given the prospects of falling inflation, still favorable P/E valuations one can still go on accumulation mode," Ravelas said. “But one must be nimble to adjust to adverse external factors particularly if there is a massive selloff in Wall Street to which there’s very little this market can do."

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Report from Bloomberg

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