Run-up seen to continue
The Philippine stock market reopens today after a long holiday break with cautious optimism for the year ahead.
The Philippine Stock Exchange index gained for the sixth straight year in 2014, racking up 22.8 percent or 1,340.74 points to close at 7,230.57.
Many are expecting the run-up to continue this year while noting headwinds such as a potential rise in US interest rate, the weakening of the peso against the US dollar and political noises ahead of the 2016 elections.
“We remain bullish for 2015 and expect strong volatility given uncertainties in the global environment,” said local stock brokerage AB Capital Securities.
AB Capital currently favors consumer and power generation sectors.
The brokerage sees oil prices recovering in the second half of 2015 and the US Federal Reserve to hike rates later than expected, or by the fourth quarter of the year.
Article continues after this advertisementAB Capital said full-year 2014 gross domestic product growth would likely be disappointing but lower oil prices could be a catalyst in boosting consumer spending. On the other hand, it sees an improvement in local corporate earnings to push the index higher, likely targeting 7,700.
Meanwhile, AB Capital cautions against heightened local regulatory risk with 2015 being the last year before the Philippine presidential elections. Doris C. Dumlao
