MANILA, Philippines - The Philippine Stock Exchange is swinging between gains and loses today. COL Financial is only going as far to say a 12% gain would be easy this year.
COL Financial research head April Lee Tan said the first half may be difficult as the Fed starts to cut stimulus, and inflation, and possibly interest rates, rise.
She said the BSP itself may not raise its rates through.
"We believe the increase in inflation that will be brought about by higher power and food prices may not push the BSP to raise rates. Because I think they're more focused on demand-driven inflation. When prices increase because of power and food, that's supply shock, so they may not be prompted to raise rates... What will push rates higher will be the strong economic growth," Tan told ANC.
Tan said she thinks funds may return by the second half, bringing the PSE index to at least 6,600 this year, which would be a 12% gain compared to last year's 1%.
"If conditions normalize, I think 6,600 is an easy target for the PSEi by end of the year. It's still good. Any weakness we believe is an opportunity to accumulate. We're not really advising investors to buy for 2014, it's more like buy for 2015 and going forward. We don't think story is over for this bull cycle," she said. - ANC