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Credit Suisse recommends investing in RP stock market

abs-cbnNEWS.com | 11/19/2008 12:10 PM

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Investors should put their money in the Philippine stock market to take advantage of cheap valuations and stronger returns, according to Swiss investment bank Credit Suisse.

In its latest global equity strategy report, Credit Suisse cited the country as one of the markets in emerging Asia that investors should look at amid the deepening slowdown in world economy. It lumped the Philippines with China and Thailand in its list of recommended markets.

The international financial services group said Asian markets are more attractive than those in Europe because of their low macroeconomic risks, strong exports, and high domestic sales and current account surpluses.

In measuring risk, Credit Suisse considered factors such as current account balance, loan-to-deposit ratio, level of external debt, level of leverage and net commodity exports. The Philippines ranked second with a score of 46, followed by Singapore, with 39. Low scores indicate less risk.

The Philippines registered a surplus in its current account balance, with a ratio of 3 percent to gross domestic product, which means it is a net lender to the rest of the world. In terms of loan-to-deposit ratio, the country had one of the lowest, 61 percent, making it well leveraged compared to its peers in Asia.

Credit Suisse placed a buy tag on 30 stocks, of which eight are listed on the local bourse. These include the Philippine Bank of Communications, Union Bank of the Philippines, Energy Development Corp., Metropolitan Bank & Trust Co., Globe Telecom Inc., Manila Electric Co. and Megaworld Corp.

The PSE, for its part, said the latest report is a further testament that the Philippine stock market and economy have the necessary elements to weather the global financial crisis.

"This is a recognition of our market’s potential and encourages us to intensify our efforts in promoting stock market awareness among the public," said PSE president and chief executive officer Francis Lim.

as of 11/19/2008 12:10 PM