Ismael Cruz, president of IGC securities, said that based on PSEi data on the past six national elections since 1998, the market gained an average of 25 percent during election years.
But excluding the 1998 and 2001 election years—when market was down 14 and 3.6 percent, respectively—the market gained an average of 41 percent.
Citing the PSEi data, Cruz said for the 2004 elections, the market was up 45 percent; 34 percent for the 2007 elections; 49 percent for the 2010 elections; and 41 percent for the 2013 elections.
“If you want to apply the 25 percent minimum return on election on this 7,200 index, we will be at 9,000,” Cruz told ANC on Tuesday.
“Unbelievable, but that’s what the statistics say…I’m hopeful that this will happen,” he added.
The PSEi dropped to a five-month low 7,200 on Tuesday, but Cruz said the Philippine market is still in a “bull market,” and he expects the index to climb up by the third quarter of the year.
“We didn’t expect this kind of correction. It is a very sharp correction, it’s about 12 percent from the peak that we hit about early April when we are marking 8,136,” Cruz said.
“These are not good times for the market but we continue to be very confident because of our strong fundamentals in the market. We feel that what is happening is the Philippines is caught in a contagion. This contagion is the outflow of funds from emerging markets including Southeast Asian markets,” he added.
He said "when the dust settles," flows will come back to the
Philippines driven by its strong fundamentals.
source: www.abs-cbnnews.com
