Local retail investors turned more optimistic on the local stock market over the next three to six months despite lingering worries on geopolitical tensions and inflation risks, according to a survey conducted by online brokerage firm COL Financial Inc.
COL Investment Management Inc. president Marvin Fausto said in a news briefing Monday that 64 percent of respondents said they would likely increase their exposure in Philippines stocks and other income-paying investments over the next three to six months.
Fausto said investors are most bullish on the property, power and real estate investment trust firms on expectations that interest rates would start going down in the second half of 2024.
Investors, however, were most concerned about the escalation of geopolitical tension in the Middle East and inflation risks which could affect the growth of the domestic economy,
Other risks in the market going into 2024 include the possibility of the US going into recession, slower-than-expected rate cuts and slowdown in China’s economy.
COL Financial research head April Lynn Tan said Philippine stocks could enter a bull market this year as the outlook for economic growth looks bright and as stocks are cheap and under-owned.
Tan said the 30-company Philippine Stock Exchange index would likely hit the 7,100 level this year as lower inflation and interest rate could spur consumer and investment spending for 2024.
Tan said, however, the US faces heightened risk of hard landing and bear market which could affect the local equities market.
“Due to the said risk, we recommend investors to focus more on defensive stocks which are more resilient to economic downturns and those that provide income through cash dividends,” Tan said.
“It would also be wise for investors to keep some cash so they can capitalize on opportunities to buy stocks at cheaper prices in case they are sold down indiscriminately because of contagion,” she said.
Among her top stock picks for 2024 are AREIT Inc., Citicore Energy REIT Corp., SM Investments Corp., Monde Nissin Corp., PLDT Inc., Aboitiz Power Corp. and Ayala Land Inc.