MANILA -- Leading online stock broker COL Financial is looking forward to the local stock market's recovery this year, as economic fundamentals and continued inflow of foreign funds are expected to fuel earnings growth.
“It’s really fund flows and fundamentally-driven. In a way, earnings recovered this year. So, we can still bring all the way to 8,600 (level) for the end of the year,” COL head of research April Lee-Tan said in an interview Monday.
Tan particularly cited the inflation rate, which is on a downtrend and is expected to decline between the 2 percent and 4 percent range this year, and a stronger peso, which are good for the stock market.
“So hopefully, with inflation going down, the confidence of people to actually buy will come back and improve consumer spending this year,” she said.
Inflation peaked to a record high of 6.7 percent in September and October mainly brought about by higher food prices due to supply issues. It declined to a seven-month low of 5.1 percent in December amid government efforts towards further reining in the prices of commodities.
“They (factors) are still in place, so we feel that so far so good. Nothing there to cause us to change and you know valuations are just so cheap,” she said.
Nevertheless, Tan said the country still has to be “cautiously optimistic” this year, noting the twin deficit risks of slower investment and slower government spending because of the election ban.
“And we may not be as resilient to this (slower) global economic growth,” she said in a briefing. (PNA)
