Philippine equity investors are preparing to average down in the coming months as weak sentiments weigh on the second-worst performing stock market in the region, according to top online broker COL Financial Group Inc.
Bullish sentiments over the next six months were down 33 percent, the latest investor survey from COL Financial showed. Investors turned more “neutral” while bearish views jumped 23 percent.
“It looks like things are shifting to more neutral. They are more concerned about global recession and the slowing down of [global] economies,” said COL investment management president Marvin Fausto, who discussed the results during a media briefing on Monday.
Data from COL showed the Philippine stock index declining over 15 percent since the start of the year, faring better than South Korea’s 19.4-percent plunge but lagging behind the rest of its regional peers. Only Indonesia (+2.5 percent) and Singapore (+1.72 percent) were trading higher since the start of 2022.
Still heavily invested
Despite the prevailing downtrend, those surveyed by COL said they remained heavily invested in the Philippine Stock Exchange.
Fausto noted 71 percent of the survey participants were expecting to add to their stock market positions in the next three to six months.
“They are considering to increase their exposure, still on equities, plus other investments such as local funds, global fund and corporate bonds as part of their strategy in terms of asset allocation,” Fausto said.
He added that interest in cryptocurrencies was significantly down from COL’s previous survey.
Despite uncertain prospects in the short term, COL chief equity strategist April Lynn Tan said a possible earnings downgrade in 2022 and 2023 were “already priced in.” Large company buybacks and insider buying could also indicate the bottom was near, she said.
Nevertheless, more cautious investors were advised to park their money in bonds and real estate investment trusts while taking profits on commodity-focused stocks.
“Commodity prices are going down. If they do rally, it is an opportunity to lock in gains,” Tan said. COL’s top picks include MREIT Inc., Citicore Energy REIT Corp., Aboitiz Power Corp., Converge ICT Solutions Inc. and Universal Robina Corp.
Traders using technical indicators were advised to exercise caution since the prevailing downtrend was “still very much in play,” said Juanis Barredo, COL chief technical analyst.
“Until we can see ourselves wrestle away from that particular trend, I really have to caution optimistic views that I have until we can see the market show some strengthening of its legs,” he said. INQ
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