HSBC considers ’14 positive for PHL equities market

By Joann Santiago

MANILA, Jan. 16 (PNA) — The Philippines equities market is expected to post a surprise earnings growth this year as the domestic economy continues to be attractive to foreign investors.

In a briefing Thursday, Herald van der Linde, HSBC head of equity strategy for Asia Pacific, said the bank is overweigh on the Philippines among few Asian countries this year because the domestic economy continues to post gains.

The country used to be one of the most expensive equities market in the region but Linde said this has changed given the developments in global economy.

Aside from the Philippines, the bank favors Indonesia as among the “most profitable” economy in the region in terms of the equities market because of strong fundamentals.

He also noted that mutual funds have reduced their exposure and is well invested across Asia.

“There are good opportunities here and they have to revisit the Philippines and Indonesia,” he said.

Relatively, Linde, in his global equities research note, said the Philippines “remains to best macro story in Asia.”

“Household spending continues to be robust while investment is rising gradually,” it said.

He even pointed out during the briefing that on the average Filipino households have no debt such as those in the US, thus, this is “positive for long-term consumption spending.”

Relatively, the research note said that natural calamities “have failed to dent the resilience of Filipinos as the nation continues to march ahead of its peers in terms of growth.”

The banks has a 6.1 percent growth projection for the Philippine economy for 2013 and 5.9 percent this year.

In the first three quarter of 2013, growth, as measured by gross domestic product (GDP) grew by 7.4 percent, higher than the government’s growth target of six to seven percent.

A major factor for the domestic economy’s output this year is how it recovers from the devastation from several natural calamities last year.

The government has approved a P40.8 billion rehabilitation fund for this year and how the rehabilitation will be implemented will play a big role on domestic growth.

“The success of public-private partnership projects, which have been stuck in a procedural log-jam, will be crucial in determining where the next leg of growth comes from,” it added. (PNA)