INVESTORS should “take advantage” of the weakness in the stock market amid the current volatility in global markets as the long-term prospects for capital markets remain bullish.
First Metro Securities Brokerage Corp. on Wednesday said investors should position themselves in opportunities with the lower prices in Philippine equities due to headwinds overseas and sell-off by foreign investors.
“Despite the volatility, which will most likely continue until the end of 2015, we remain optimistic of the Philippine market over the longer-term,” said Mark Angeles, First Metro Securities head of Equity Research.
Due to the global volatility caused by slower-than-expected growth, weak corporate earnings, expectations of a US rate hike, and economic troubles in China, Angeles noted investors should shift to defensive stocks that have constant dividends and stable earnings regardless of the state of the economy.
The upcoming campaign season in the run up to the May 2016 elections are economic opportunities, especially for consumer-related businesses that in turn boost consumer-related stocks.
“We suggest investors take advantage of the current market weakness by increasing their exposure on stocks that tend to perform better during election season. Historically, expenditure on groceries, liquor, cigarettes, and fuel tend to rise about 12 months prior to elections,” Angeles noted.
Investors should not let the fear of current volatilities get in the way, said Melvin Abajon, First Metro Securities head of institutional sales.
“The stock market has its ups and downs but given the long-term positive outlook for stocks, the current market weakness presents an attractive buying opportunity,” Abajon said.
First Metro Philippine Equity Exchange-Traded Fund (FMETF) is a likely bet in long-term investing, given that the fund mirrors the performance of the top 30 stocks of the PSEi which translates to solid growth of diversified blue-chip companies in various sectors, Abajon noted.
The fund is convenient to trade because it can be bought and sold online like equities.