Bull market not yet over, investors told

THE PHILIPPINE stock market has enough steam to allow its main stock barometer to exceed 8,600 by the end of the year, but like a cocktail party, it’s the last call for “happy hour,” the head of BPI Securities said.

In an interview, BPI Securities managing director Michaelangelo Oyson said the local market was fairly valued at 7,800 but downside risks were coming from the reversal of flows out of emerging markets and in to North Asia.

But the decline in prices arising from the exit of foreign funds would be an opportunity for investors to pick up stocks at lower prices.

“We’re in the last call for happy hour and the elections in 2016 will determine whether we move the happy hour to the main party or we will say the party is over,” Oyson said.

“The bull market is not yet over,” he said noting that local stock valuations were still below historical peak and the growth story was still intact.

He said the market was still supported by a strong underlying economy despite some weakness in consumption numbers.

Historically, consumption spending contributed 400 basis points of GDP but in the first quarter, it accounted for only 370 basis points, he said.

Toward the end of the year, as the market starts looking at the 2016 elections and starts factoring in corporate earnings for next year, Oyson said the fair value of the local stock barometer could exceed 8,500.

In a presentation to investors on Saturday, Oyson said the Philippine Stock Exchange index could advance to 8,200 to 8,600 by the end of the year.

One positive catalyst, he said, would be for the economy grow by least 6 percent in the quarters ahead.