February 24, 2018, 10:31 pm
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Pinoys to invest more in stocks

Online brokerage firm COL Financial Inc. (Colfinancial.com) said many retail investors wish to invest more money into the Philippine Stock Exchange (PSE). 

Colfinancial’s retail investor sentiment survey showed   majority of the respondents are onfident things will be much better this year compared to last year.

The  top three factors seen driving the market this year are earnings growth, foreign fund flows, and parallel good performance of the PSE’s global peers. 

Colfinancial said a majority of the respondents said they still have money to invest in the stock market and that they plan to increase their exposure in the equities market this year. 

This sentiment also reflects  Colfinancial’s projection that the market could  hit 9,300 for the year. That  is only a few points away from the current level,  indicating market corrections until the end of the year.

April Lynn Tan, Colfinancial  head of research, said prospects for the PSE index (PSEi) remain bright in light of the recovery of the global economy and overseas markets.

Tan said the revised tax system translates to more revenues for the government and in turn will result to increased spending for its infrastructure plans, cascading to the corporate and the consumer in the process.

Tan said the Philippines also benefits from the higher Chinese tourist arrivals  which last year grew by almost 40 percent. The influx of Chinese online gaming firms  has boosted demand for office spaces.

Tan said higher inflation is seen due to expected hike in US rates, higher taxes on fuel as well as the stronger local economic growth that may dampen consumer confidence and spending and may also lead to higher interest rates.

The market may have also priced-in the effects of the tax reform as  the PSEi has risen 12.5 percent since the tax package was approved by the House of Representatives in May 31, 2017.

Juan Barredo, Colfinancial chief technical analyst, meanwhile said the early part of the first half may see cascading extensions with next resistance estimates projected at “9,220 first, then, if broken, 9,700.”

“But necessary pullbacks may be expected and these reactions may urge rollbacks of 5 percent to 10 percent,” he added, noting that  “such pullbacks may propose better buying options for traders.”

Barredo also said  several large capital-raising plans by banks and conglomerates that will amount to as much as P400 billion may siphon liquidity from the market and trigger a correction.
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