PH shares seen to move sideways, says analyst

Posted at 02/17/14 2:31 PM

MANILA, Philippines – Philippine shares are expected to move sideways in the medium term despite recent positive gains due to the release of earnings reports, an analyst at Angping & Associates Securities said.

“Anticipation of good earnings will provide a short term impetus for the market, but for the medium term, I think the market will continue to move sideways because the Fed is still pushing through with its plan to scale down its asset purchase program. With that, foreign investors will take some risks off the table and essentially what this will do to the emerging markets is somehow decrease the flow to the emerging market,” Rafael Supangco, head of research at Angping & Associates Securities, told ANC on Monday.

Supangco said there are no “strong drivers” seen to propel the market back to 7,400 in 2014.

“The way to make money now is essentially to buy on the dips and sell on the rallies,” he said, noting the potential of stocks in the property, mining and consumer industries.

“We’re looking at the consumer industry because of the recent announcement of JFC (Jollibee Foods Corp.), the top line continues to grow and we expect consumer company top line to continue to grow moving forward,” said Supangco.

Supangco believes the Philippines is in a strong economic position and remains as an attractive investment destination despite having a high price-to-earnings ratio.

“It’s just that relative to other countries like Korea and Japan, we’re still a bit overpriced. So I think when foreign funds decide to go into riskier investments, they would go into the cheaper markets,” he said.