Bloomberg
Some of the Philippines’ top money managers see central bank easing and low inflation pushing the nation’s equity benchmark back above the key 8,000 level.
The Philippine Stock Exchange Index has retreated 5.8 percent since riding a bull market to as high as 8,365.29 on July 15. The gauge has breached the 8,000 mark about a dozen times this year only to retreat amid concerns including the global trade war and slowing domestic growth.
Fund managers at BDO Unibank Inc and Security Banking Corp expect continued interest rate cuts will signal that inflation remains under control. The nation’s central bank is expected to make the second-straight 25 basis point cut to its key rate at its September 26 meeting. Together with higher government spending, the central bank policy should boost growth, the money managers said.
Fritz Ocampo, chief investment officer at BDO, sees the PSEi rising to 8,400 as early as the fourth quarter. He favors property, consumer companies and some banks and conglomerates, including names such as SM Prime Holdings Inc and Metro Pacific Investments Corp. BDO is the Philippines’ largest money manager based on a Bloomberg survey, handling assets of 1.3 trillion pesos ($25 billion).
“We are rotating our funds,†Ocampo said. “Those that have run up and offer limited upside, we are taking profit and rotating to the laggards. We are accumulating names the market has left behind but are promising.â€
Security Bank sees a climb to 8,200 by year-end but cautions that profit-taking could kick in above 8,000. In addition to concern over US-China tensions, investors may look to shift funds into upcoming IPOs from Metro Pacific Hospital Holdings Inc and AllHome Corp, according to Noel Reyes, the bank’s chief investment officer.