[BLOOMBERG]June 22 -- Philippine investors should buy shares in utilities and phone companies to ride out a market “consolidation” in the next three months, Macquarie Group Ltd.’s Manila-based strategist Alex Pomento said.
Philippine Long Distance Telephone Co., Energy Development Corp. and Manila Water Co. are among the picks, Pomento said, advising investors to sell banks and property companies. He estimates the Philippine Stock Exchange Index will range between 2,200 to 2,500 in the third quarter, from 2,388.84 on June 19. His January forecast that the measure will climb to 2,410 this year was reached on June 1.
“It’s time to go defensive,” said Pomento. “In a period of market consolidation, these are the stocks that are less volatile because they have earnings certainty and consistent revenue streams as opposed to banks and property companies, which can show big swings.”
The benchmark index sank 7.7 percent last week, its sharpest loss since Nov. 21, after the government cut its economic growth forecast for the third time this year and remittances from overseas Filipinos grew at a slower pace. The measure, which has advanced 29 percent this year, rose 0.6 percent to 2,411.88 at noon local time today.
A widening budget deficit, rising interest rates and advancing oil prices may delay economic recovery into 2010, making it hard for the market to sustain its rally and support stock valuations, Pomento said.
Sell List
Ayala Land Inc.,
Bank of the Philippine Islands
Jollibee Foods Corp.
San Miguel Brewery Inc.
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