Finally, CitiSec On Line (COL) release it’s first COLing the shot article and market brief for 2015. And I’m pleased to share COL Top Stocks for 2015 and market outlook. You can compare it with Stocksmarts Top 10 and decide where to invest this year.
Good news! PSEi is on it’s way to achieve 10,000 by 2020.
Main driver for 2015: LIQUIDITY
Deflation rather than inflation is now a bigger concern... Therefore, reducing pressure for central banks to raise interest rates.
Domestic factors ensuring low interest rates:
- Strong government finances
- Strong external account position
- Ratings upgrade
- Banks awash with cash
Stocks Remain the Most Attractive Peso Asset Class Available. Due to low interest rates, stocks remain the most attractive peso asset class even though valuations seem expensive compared to historical averages.
Consumer Spending has Always Been Resilient. . .
We benefit from Falling Oil Price
Government Spending Usually Picks up a Year Before a Presidential Term Ends.
End 2015 PSEi Target Raised from 7,800 to 8,300. Fundamental factors coupled with falling US bond rates warrant a reduction in risk free rate assumption from 5.0% to 4.5%
With that, COL 2015 Stock Picks are:
COL notes for 2015:
- We believe that the market will continue to move higher in 2015, bringing the PSEi well on its way to meet our goal of 10,000 by 2020 at the latest.
- The most important reason why the stock market will continue to go up is ample liquidity, both globally and domestically. The resulting drop in interest rates makes stocks more attractive compared to other liquid investments despite the PSEi’s relatively expensive valuation from a historical perspective.
- Other reasons why we expect the market to continue going up is the Philippines’ above average economic growth outlook for this year and beyond, the favorable impact of falling oil prices on consumer spending, and expectations that reforms to address shortcomings in the country will endure beyond the current administration
- Given our view that liquidity will continue to drive the stock market higher, we increased our end 2015 target for the PSEi to 8,300 from 7,800 after we factored in a lower risk free rate assumption of 4.5% vs. 5.0% previously
- Our top picks for 2015 include DNL, CIC, GTCAP (consumer plays/play on weak yen), AP, EDC, FGEN (bottom up picks/power plays), MBT (value play), SMPH (consumer play proxy), CEB (oil play) and AC (bottom up pick/ power and infra play). Risks for 2015 include the uneven appreciation in share prices, volatility, and share placements.
Source: COL Prospects for 2015 and Beyond by April Lyn Tan, CFA, VP & Head of Research
Be part of our country’s growth and development, invest in stock market! Open an investment account now in CitiSec On-line. www.colfinancial.com
Further, join us in praying for our nation, as we hope for economic growth and improvement on quality of our lives as Filipinos, we also believe that God will also restore the lives of every Filipinos. We are a blessed nation, Psalm 33:12 says “Blessed is the nation whose God is the LORD, the people whom he has chosen as his heritage!” As we desire to be bless by God, let’s not only enjoy the blessings, let’s share,let’s also desire to bless others too!