Stocks likely to start 2015 on positive note

MANILA, Philippines - Local stocks are likely to kick off the new year on a positive note, tracking the upbeat mood across the region.

The Philippine stock market resumes trading today following a nine-day holiday break that began on Dec. 23.

Most Asian stocks rose on the first trading day of the year amid optimism about the US economic outlook as well as China’s effort to spur lending.

China’s central bank amended its rules to allow deposits from non-bank financial institutions to count as reserves, a measure aimed at boosting growth and lending.

First Metro Investments Corp. (FMIC) sees the main Philippine Stock Exchange index breaching 8,000  this  year  with  corporate earnings expected to grow 12 percent.

“That earnings pace is going to take the PE (price to earnings) of the market lower to 19 times from the current 20 times, suggesting a target PSEi of 8200 or a 12-percent upside…But 2015 is not like any other year. It is the year when rallies start in the last semester, peaking on the election year which is 2016,” FMIC said in its report.

Accord Capital Equities Inc.’s Jun Calaycay said while the 2016 elections is still a year away, the political landscape is expected to turn a different color this year with thousands vying for elective seats.

“This early any serious aspirant to a national office (president, vice-president and senator) should already have in place a pre-campaign mechanism that will in turn build his/her 2016 official campaign network,” Calaycay said.

Riding on the anticipation that the run-up to the election season will begin to show up in some “companies’ financials” Calaycay is bullish on stocks engaged in  media, retail, transportation and communications.

Meanwhile, Calaycay advised investors  to keep a closer watch on the movement of foreign trades this year as conditions in the US improve.

Expectations of an increase in interest rates by mid-year could open some liquidation windows and create a stir in the market, he said.