Stock analysts raise PSEi yearend target

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Posted: 9:26 PM | Jun. 11, 2006
Elizabeth L. Sanchez
Inquirer

Published on page B6 of the June 12, 2006 issue of the Philippine Daily Inquirer

ENCOURAGED BY THE EXPANSION OF THE economy, inflation slowdown and robust corporate earnings growth, the Association of Stock Analysts of the Philippines (Asap) has upgraded its yearend target for the benchmark Philippine Stock Exchange index (PSEi).

In a recent briefing, Asap president Francisco Liboro said the PSEi target for this year was raised to 2,820 from the original goal of 2,500.

"We are entering a period of relative inflation stability. There is a strong chance that the stock market will continue to move up and this confirms our contention that we are already in a bull run," Liboro said.

Asap director Astro del Castillo said corporate earnings were expected to grow by 25 to 30 percent in terms of earnings per share, riding on expected economic growth.

Del Castillo, however, said that what might be worrisome for stock market investors were possible delays in the state's efforts to privatize power assets and the increasing oil prices.

"The high cost of power is one of the factors that is slowing the growth of the economy," Del Castillo explains.

Stock prices, as tracked by the PSEi, rose 9.5 percent to 2,296.11 points in the first five months of the year, from 2,096.04 last year.

This growth was supported by the 8.6-percent increase in the value turnover in the first five months of the year to P213.45 billion, from P196.47 billion in the same period last year.

Total market capitalization or the value of total stocks traded in the bourse climbed 14.2 percent to P6.8 trillion from P5.95 trillion last year.

The bulk of the market capitalization remained concentrated on the financial sector. Based on a PSE review, the market capitalization of this sector increased by 13.3 percent to P4.8 trillion during the first five months of the year.

The services sector followed with a P643.3- billion market capital, or 17.1 percent higher than its level a year ago.