THE downtrend observed in the local bourse in recent days shouldn’t discourage Filipinos from investing, a top official of PNB Securities Inc. said.
Manuel Antonio Lisbona, president of PNB Securities, remained optimistic the country is still in the best position to reap higher growth backed by its strong and solid economic fundamentals.
“The Philippine Stock Exchange index (PSEi) is currently in a correction phase, giving a big opportunity to position in value stocks for a superior Philippine stocks portfolio,” said Lisbona during the Institute of Corportate Directors (ICD) meeting last week.
He noted that while the stock market’s performance has been volatile, investing in the local bourse should be for the long-term.
Local stocks fell thrice below the 8,000 mark this month, the lowest of which is the 7,909.07 recorded last Mar. 21 and the lowest finish seen by PSE since Aug. 3, 2017, when it closed at 7,876.66.
Lisbona said the US Federal Reserve’s interest rate hike and the recent trade war concerns between the United States and China have caused investor worries.
“Our outlook though remains positive amid the recent volatility. We remain to be stable,” he said.
Lisbona, specifically anchored his optimism on the Philippines’ high gross domestic product (GDP) growth, the third highest among 38 major countries, as of the fourth quarter of 2017.
Since 2010, the country’s GDP has been growing at around six percent per quarter, which gives the country the fourth best price to earnings (P/E) growth ratio despite its high price/earnings ratio (PER), said Lisbon.
Lisbona said the Philippine stock market is teeming with value, with 50 stocks enjoying an average net income growth of 10 percent. Aside from that, 26 stocks are at bargain levels, 12 are reasonably priced, and only 13 stocks have high PERs that make the PSEi look expensive.
Sectors such as banks are seen to benefit from the economic growth and gradually rising interest rates. Listed companies that belong to retail, food and beverage are noted as main beneficiaries of Train Law on the back of high spending activity.
Infrastructure, power and utilities are likewise expected to benefit from the economic growth despite a strain on margins from competition.
Lisbona said that while the government’s Build, Build, Build program has caught the attention of the global economy and has raised the value of the country, Filipinos need to make sure the promised infrastructure projects are implemented.
Growth in property, on the other hand, will continue, buoyed by strong demand for quality living spaces and housing backlog.
Lisbona recommended that investors raise sizeable liquidity for stock purchases at the upcoming bargain season. He said this is a good opportunity that only appears every three to five years.
He also advised to accumulate on value stocks with share prices that have gone to low asset valuations. And lastly, to catch fallen blue chips—recent ones include Ayala Corp. and JG summit Holdings Inc.
Moreover, timing is also equally important to achieve gains in the stock market. Lisbona identified May, August and November as the slowest months where the market goes down, which are opportunities to buy more shares.
He, however, said the best strategy is to never put all the hard-earned money in a single investment. “You can invest monthly, depending on your cash flow, but never on one-time big-time investment,” he said.
Philippine markets will be closed today and on Good Friday.