The Philippine stock market will continue to outperform other markets in the region, according to several analysts as the market observes the sixth year of bullrun come March.
The Philippine Stock Exchange index closed the year at 7,230.57 points, 22.76 percent higher than the previous year. It was the best performer in Asia.
Analysts who were expecting the index to hit 7,400 points on the last trading day were disappointed with the December 29 close of 7,230.57 points from 5,889.83 points in 2013. . Harry Liu, president of Summit Securities Inc. one of those disappointed with the December 29 record said that the first trading week of PSEi this month is expected to be in the consolidation phase given that 2014 yearend main index did not reach the targeted 7,400 points.
But after the consolidation, Liu said that the market will go in an upward trend due to the positive outlook for the international markets, as well as the economic developments and activities anticipated this year.
Growth this year is expected to be boosted by pre-election season and government infrastructure spending.
Analysts are forecasting the index will range from 7,600 points to 8,000 points by the end of 2015.
Justino Calaycay Jr., analyst at Accord Capital Equities Corp., said pre-election spending will boost prices of “MRTC – media, retail, transportation and communication-companies.
Some of Accord Capital’s recommended stocks for next year include: ABS and GMA7 for media; PGOLD and RRHI for retail; CEB and PAL for transport; as well as TEL and GLO for communication.
“MRTC stocks are buy and hold propositions through 2016,” Calaycay said.
Using data from 2009, Calaycay said election spending will add 1.1 percent on GDP growth.
DA Market Securities Inc and Jason Escartin of F. Yap Securities Inc. agree with Liu that the market will consolidate in the first trading days of the year .
Escartin said the market is likely to trade within the 7,200 to 7,350 points range in the month of January “as participants weigh headlines overseas,” while immediate support and resistance for the first trading week will be at 7,180 to 7,200 points and 7,270 to 7,300 points, respectively.
DA Market Securities said in a yearend outlook that the Philippine stock market is still seen to be a “global outperformer” given its economic targets, lower inflation and interest rates, healthy and strong peso and gross international reserves
“The bull market is set to celebrate its sixth year anniversary next March from continued optimism on the back of continued global growth amid divergent regional outlooks. Notably, equities continue to provide higher yield versus other equity classes,” DA Market Securities said.
“More importantly, the Philippines is still set to be a regional and global outperformer,” it added.
Given the healthy equities market, DA Market Securities said the PSEi is seen to reach 8,000 points by end-2015, and 8,200 points in early 2016.
Liu said the series of good news may uplift the market up to 8,000 points at the end of the year. Some of the optimism, as Liu mentioned, included the arrival of the pope mid-January, 2015 Asia-Pacific Economic Cooperation (APEC) meets in the Philippines, lower oil prices and inflation, as well as the expected higher GDP numbers.
On 2014’s last trading day, the PSEi increased by 0.62 percent or 44.25 points to 7,230.57, while the wider All Shares went up by 0.69 percent or 29.09 points to 4,264.61. Trading will resume today, January 5, Monday.