MANILA -- The local stock market's recent decline due to indicators pointing to an improving US economy is an opportunity to invest in the bourse amid the growing Philippine economy, an analyst said on Friday.
The Philippine Stock Exchange index lost 3.81% or 275.22 points to finish at 6,953.35 on Thursday. The government's announcement of a 7.8% first quarter economic expansion that beat market expectations wasn't enough to cushion the fall, PSEi's steepest since September 26, 2011, when it shed 4.24%.
Smith Chua, vice president at BPI Asset Management and Trust Group, explained the slide in share prices, which has been evident in the past few days, has been mainly due to recent indicators showing an improving US economy.
"The recent slowdown we've seen in the past few days [is] actually caused by the data from the US: you've had strong consumer confidence and housing prices have gone up... US treasury yields went up," Chua told ANC's Business Nightly.
Chua noted that share prices may continue to be volatile in the coming weeks, mainly dependent on upcoming US data.
"But while foreign funds come and go, local funds are quite abundant," Chua stressed.
"Now for the next few weeks, we may see a point of consolidation, some weakness or volatility, we would advise clients to invest on a staggered basis, especially buying on weakness," he continued.
He said that while his firm remains overweight on conglomerate and consumer stocks, investors should also consider media and construction firms.
"What would be long-term buy for us would be the media stocks," Chua said.
The growing economy will entice firms to advertise their products and this will benefit media companies, he explained.
"The other sector we're also bullish on is the construction sector, as demand grows not only of public... but also private [infrastructure]," Chua said.
The economy is expected to sustain its growth momentum, as some indicators such as consumption and sales already point to a high second quarter expansion, the analyst recounted.
Moreover, he said new lawmakers at the Senate may mean a shuffle of priority bills that will provide the country with needed reforms that can sustain the economic growth.
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source: www.abs-cbnnews.com
