Bulls push PH stock market to new peak
Analysts see index hitting 6,000 in second halfBy Doris C. Dumlao
Philippine Daily Inquirer
The main share Philippine Stock Exchange index added 26.14 points, or 0.5 percent, to finish at 5,228.84. The index also marked an intra-day peak of 5,269.97, but gains were trimmed at closing.
The index was led higher by the financial and holding firm counters whose sub-indices respectively rose by 1.2 percent and 1.7 percent. The industrial and property counters likewise firmed up modestly. On the other hand, the services and mining and oil counters dipped.
Value turnover for the day was substantially larger at P17.86 billion including a P9.73 billion block sale of Bloomberry Resorts Corp., which placed out about 11 percent of its shares to new investors.
Across the region, reports of favorable US and China factory data fueled risk appetite.
Philip Hagedorn, ATR KimEng Asset Management director for investments, said it would be healthy for the index to consolidate between 5,000 and 5,200. But he said corporate earnings were keeping the market buoyant, noting that the first-quarter earnings reports so far were not disappointing markets.
During the last real bull run at the local stock market in 2007, Hagedorn said the market traded as high as 17 times of projected earnings. Using the same price-to-earnings multiple for this year, he said that 17x P/E should translate to about 6,200. “I think that’s possible in the second half of the year,” he said.
Hagedorn said 5,500 would be a good “short-term” target for the market. “But you know how people are, by the time we get to the third quarter, people start looking at 2013 and the outlook is much better at 2013,” he said.
The fund manager said a lot of the big funds buying into the Philippines were now looking at a three- to five-year horizon.
“We’re getting a much more longer commitment form the foreign investors rather than the hedge funds that invest short-term,” Hagedorn said.
Another factor to watch out for, Hagedorn said, was that the Philippines currently accounted for only 0.98 percent of the MSCI ex-Japan index but there were large investment houses recommending their clients to be “overweight” or increase exposure relative to the MSCI benchmark by about six times.
With the local fund management industry growing by a double-digit level, he added that there would be more funds likely to flow to equities. The fund management industry currently has assets of about P4 trillion, less than 15 percent of which was invested in equities, he estimated.
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