Philippine index may rise to record in 2010, ING says

Written by Jun Cruz
BusinessMirror

THE Philippine equities index may rise to a record in 2010 with energy, property and mining stocks gaining the most from low interest rates, a pickup in consumer demand and economic growth, ING Investment Management Ltd. said.

The manager of the three best-performing Philippine equities funds this year is holding more energy, property and mining shares than the allocation in the benchmark index, said Paul Joseph Garcia, chief investment officer at ING Manila. He’s reducing holdings of consumer, banking and telecommunications stocks.

The Philippine Stock Exchange index may climb to 3,600 points in 2010 as economic growth accelerates to 3.2 percent and corporate earnings increase between 15 percent and 20 percent, Garcia said. Macquarie Group Ltd. said last week the benchmark may reach a new high in the second half. The measure rose 2.8 percent to 2,996.71 at the noon close yesterday, a 19- month high.

“Anything better than those numbers and we could see the index hitting a new record,” Garcia said, adding that ING prefers “names that will benefit most from low interest rates and the ongoing economic recovery.”

ING forecast a 1.4-percent economic growth and 8-percent earnings growth this year, he said. The government has forecast economic growth to range between 0.8 percent and 1.8 percent this year, after expanding 4.6 percent in 2008.

The Philippine stock index has rallied 60 percent this year, the third best-performer in Southeast Asia after Indonesia and Vietnam, on expectation record-low interest rates and a 15-percent increase in government spending will help ease falling exports amid the global recession. The measure closed at a record 3,873.50 on October 8, 2007. Read More...