Philippine Stock Market Research

April 4, 2017

1Q17 Recap and 2017 Outlook

Our Special Report this week is the 1Q17 Recap and 2017 Outlook Report.  The PSEi was the seventh best performer in 1Q17 among 18 emerging and developed markets we cover.  The Philippines also has the third best GDP growth behind India and China and has the ninth most expensive PER in the group.  The Philippines’ yield curve improved in 1Q17 from 4Q16 indicating better economic outlook.

The PSEi range-traded in 1Q17 from 7,200 to 7,400 after surging from 4Q16.  It was weighed down by heavy net foreign selling.  The PSEi is midway our estimated peak and through this year but is weighed down by rising interest rates.

Our recommended 2017 Stocks Portfolio generated a 5.8% return in 1Q17 slightly underperforming the PSEi and ASI in the early part of the year.  The 2017 Stock Portfolio was made at the start of the year.  They are composed of 12 cash dividend paying, bargain and Trump-free stocks.  The latter refers to having very minimal to no BPO exposure.  Two stocks generated hefty double-digit returns in 1Q17.  Seven generated single-digit returns, while three incurred losses.

Philippine stocks are coming from a high base in 2016 which is highlighted by the presidential campaigning period and elections.  2017 earnings results are seen to be generally flat to slow due to this.  There are 28 bargain stocks though in the 51-stock coverage indicating a good number of choices for investments.

1Q17 Stocks Portfolio vs PSEi

1Q17 Stocks Portfolio vs ASI


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