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JP Morgan “overweight” on PH

market seen to rise by 10-12% in line with corporate earnings growth
02:10 PM June 19, 2015

AMERICAN investment bank JP Morgan sees Philippine stocks outperforming Southeast Asian peers this year, citing upbeat corporate earnings growth trajectory notwithstanding 2016 election risks and external headwinds.

“We are recommending that investors be overweight on the Philippines relative to emerging markets and Asia ex (excluding)-Japan,” Jakarta-based Aditya Srinath, executive director for equity research at JP Morgan, told a press briefing on Friday.

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“It’s a straightforward compelling reason. The Philippines offers some of the most attractive earnings growth dynamics anywhere,” he said, noting that within Southeast Asia, this was the only market that JP Morgan was “overweight” on.

“Overweight” is a recommendation to increase allocation of stocks relative to a benchmark index which is thus a bullish view.

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Outside of Southeast Asia, JP Morgan likewise has an overweight recommendation on China, India and South Korea.

In the Philippines, Srinath said corporate earnings would likely rise by 10-12 percent this year, which means in the given year, one could expect the equity market could rise by the same pace of 10-12 percent.

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