MANILA, Philippines - Expect trading at the Philippine Stock Exchange (PSE) to remain lackluster in the first half of 2014, brokerage firm COL Financial said on Monday.
April Lee Tan, vice president and head of research of COL Financial Group, said investors are looking for signs of stronger corporate earnings.
"Most likely we'll see lackluster trading. What we expect for at least the first six months, we don't see any strong catalyst for the market on the upside. I guess the problem right now is foreign investors continue to sell out of the market. Unfortunately, when they look at the Philippines, they look at valuations and earnings growth. And this year is not a good year at least for earnings growth. For COL, we're projecting PSEi EPS growth to be at 6%. And in terms of P/E we're still trading at historical average 14-15x," she told ANC.
Trading at the PSE has been thin, around P2.5 billion in early trade on Monday. This is just a quarter of last year's P10 billion average daily value turnover.
Tan said also keeping investors on the sidelines are worries over rising global interest rates and falling Asian currencies, as the US Federal Reserve announced it will keep trimming its monthly bond buying.
"All these news about emerging markets encountering problems, raising interest rates, weakening currencies. I guess there's still much fear. Foreign investors are selling out, staying on the sidelines... (But) second half might be a different story as we look forward to 2015," she said.
"For 2015, we're expecting earnings growth to ramp back up to around 14%." -- With ANC