Market's bull run likely to last till 09

By Honey Madrilejos-Reyes

Reporter

THE current bull cycle being run by the stock market may last until 2009, analysts told reporters at the Good News Kapihan on Thursday. PCCI Securities president Francisco Liboro said technical analysis show that the bull market, which started in 2003, could last until six years based on moving averages of the prices. A bull run is a prolonged period in which investment prices rise faster than their historical average. It can happen as a result of an economic recovery, an economic boom or investor psychology. This year, Liboro added, the benchmark Philippine Stock Exchange index (PSEi) could hit 3,700 as economic fundamentals remain intact and the health of the corporations is a lot stronger. The positive outlook was supported by Jenny Ting Jr., senior manager at BPI Asset Management. “There is still more room for an upside,” Ting said. Liboro said the succession of new highs is indicative of the so-called blue skies phenomenon. “The long-term moving averages reconfirm the bull-bear cycles where the PSEi is in year four of the bull run,” according to Liboro. “The year-long rallies across the region [except Thailand] exemplified elevated investor interest in Southeast Asian emerging markets. Clearly, the PSEi bull market is not an aberration but part of the mainstream flow of funds into the region.” He said there are new trends that will save the day for the stock market, including inflation, which is expected to fall further with cost-push factors (like oil prices) in decline; the low Treasury bill rates and declining interest rates. “We anticipate that a healthy period of consolidation will occur sometime between April and  June, in line with the elections in May,” Liboro noted. “And depending on the conduct of the polls, as well as the global economy [particularly the US], entering the second half, we could see the market make a run at the 3720 level.” Fourteen companies are expected to ride on the prevailing bullishness of the equities market by going public from this year to 2010. For this year, the companies eyeing to sell shares of stock to the investing public are Anchor Land Holdings Inc. Phoenix Petroleum Philippines Inc., STI Group, Yehey Inc., and GMA Network Inc. Pacific Online Systems Corp. and National Reinsurance were the first two companies that conducted public offerings this year. In 2008, the market could witness the public offerings of sourcing and procurement service provider BayanTrade, Seaoil Philippines Corp., and Figaro Coffee Co. On the other hand, the companies looking to go public from 2008 to 2010 are Cebu Pacific Air Inc. and oil player Enerfuse Holdings Inc. Since the start of the year, a lot of companies have hinted plans to tap the stock market as a way of raising capital for their operations. Analysts say the bullishness of the investors on blue chips and even the second and third liners augurs well for the market. From 2004 t0 2006, the stock market saw eight public offerings, namely, IBank, PetroEnergy Resources Corp., SM Investments Corp., Manila Water Co., CitisecOnline, First Generation Corp., Alliance Tuna and PNOC-Energy Development Corp.

 

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