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Saturday, December 20, 2014

11 stocks that still have an upside in 2015

The Philippine Stock Exchange index (PSEi) may hit the 7,700 level in the next 12 months after weathering the volatility at the close of 2014.

In a briefing today, RCBC Securities vice president for research Raul P. Ruiz said the forecast is based on the projected 15 percent growth in earnings of the basket of 50 companies that the brokerage covers.

"A lot of the recent selloff is because of oil prices. In the long run, that's a plus for the Philippines. We expect the market to reverse next year, taking into account the lower oil prices which will be good for the Philippine economy," RCBC Securities president Gerald O. Florentino said.

Election-related spending ahead of the 2016 polls will also boost the Philippine economy, Florentino added.

As a result of these factors, RCBC Securities is overweight on consumer stocks like Robinsons Retail Holdings Inc, SSI Group Inc, Puregold Price Club Inc and Universal Robina Corp.

Despite the declining revenues of the casinos in Macau, RCBC Securities sees upside for gaming stocks, particularly Bloomberry Resorts Corp and Travellers International Hotel Group Inc.

The brokerage also likes First Gen Corp and Energy Development Corp for power and Megaworld Corp, SM Prime Holdings Inc and Vista Land & Lifescapes Inc for property.

RCBC Securities is projecting the PSEi would close this year between the 7,200 and 7,300 levels if the critical support level of 6,900 holds. The local equities market had a volatile trading session today with the main gauge settling at 7,029.28, up nearly a percent.

If the support level fails to hold, the benchmark index can fall to as low as 6,800 by yearend, Ruiz said.

He expects the last four trading days of the market to be volatile as oil prices remain the focal point of trades.

"It's been a good year. We're still up 20 percent. It's just a bit shaky because of the drop in oil prices. A lot of the funds are cautious because of higher valuations and with the market coming down, that should provide buying opportunities for these funds to come back into the market," Ruiz said.

"The funds are just standing by, waiting for good levels. You will see them coming back in. A lot of these funds made a lot of money so it’s easy for them to take profits," he added.

- Interaksyon

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