MANILA -- Goldman Sachs said Philippine stocks will continue to climb but told investors to lighten up on these shares because they are expensive.
The firm said Philippine Stock Exchange-listed companies can boost profit by an average of 13% this year, above market forecast of just 9%.
Earnings growth will be fueled by banks, while profit will be flat for telcos and utilities, Goldman Sachs said.
Despite this, the investment banking firm is telling investors to be underweight in the Philippines or have less Philippine shares than recommended by indexes like the MSCI Asia Pacific Index.
Goldman Sachs explained that with Philippine shares trading at 21 times the profit, they are the most expensive in Asia. Moreover, the back-to-back credit rating upgrades should lift bonds more than stocks, the firm noted.
The company has an overweight tag on Singapore and Thailand, and neutral on Indonesia. It is underweight on Malaysia, mainly due to muted earnings growth. -- Lois Calderon, ANC