Philippine stock rally continuing

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Philippine stock exchange building in Makati, Manila

Global traders are finding cozy refuge in the Philippine stock market, which has continued to hit record highs in the first half of this year as large funds across Europe look to shield themselves against the debt crisis.

The main-share Philippine Stock Exchange (PSE) has been stunning investors consistently by climbing to record highs 19 times this year, increasing a total of 20 per cent to 5,246.41 points at the end of June, reported the Philippine Daily Inquirer.

Though shares are no longer going for bargain prices, industry experts predict that the main index will continue to gallop ahead as low interest rates stoke consumer appetite and attract potentially dangerous levels of short-term money flows from abroad.

Increased spending on retail, food and housing has led to concerns over the harbinger of so-called “hot money”, whereby traders look to exploit the appreciating Philippine peso. An unchecked currency also poses threats to the Philippine’s lively export and BPO industries, which stand to lose competitive strength if the peso rises against the dollar.

Interest rates are likely to remain low, however, as the government works towards acquiring investment grade status. Currently the Philippines has been given a BB rating with a stable outlook by Standard and Poor’s, BB+ with a stable outlook by Fitch and Ba2 with a stable outlook by Moody’s.

Along with its neighbouring Southeast Asian tigers, the Philippines has clocked serious growth rates in past years, impressing investors with its resilience, credited in part to increased domestic consumption and a business-friendly environment.

The Philippine economy grew by 6.4 per cent in the first quarter, showing vivid similarities to its larger archipelago neighbour Indonesia not just in terms of economic prowess, but also as nations that have similar credit ratings and a youthful population.

Analysts believe consumer sentiment will continue to be upbeat and shift up earnings for companies in the bourse.

At the moment there are no controls in place to stymie the flow of short-term investments, though some analysts believe the government should consider implementing controls similar to those seen on Bursa Malaysia, which would require traders to hold investments for a minimum period of several months.

 

 

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Reading Time: 2 minutes

Philippine stock exchange building in Makati, Manila

Global traders are finding cozy refuge in the Philippine stock market, which has continued to hit record highs in the first half of this year as large funds across Europe look to shield themselves against the debt crisis.

Reading Time: 2 minutes

Philippine stock exchange building in Makati, Manila

Global traders are finding cozy refuge in the Philippine stock market, which has continued to hit record highs in the first half of this year as large funds across Europe look to shield themselves against the debt crisis.

The main-share Philippine Stock Exchange (PSE) has been stunning investors consistently by climbing to record highs 19 times this year, increasing a total of 20 per cent to 5,246.41 points at the end of June, reported the Philippine Daily Inquirer.

Though shares are no longer going for bargain prices, industry experts predict that the main index will continue to gallop ahead as low interest rates stoke consumer appetite and attract potentially dangerous levels of short-term money flows from abroad.

Increased spending on retail, food and housing has led to concerns over the harbinger of so-called “hot money”, whereby traders look to exploit the appreciating Philippine peso. An unchecked currency also poses threats to the Philippine’s lively export and BPO industries, which stand to lose competitive strength if the peso rises against the dollar.

Interest rates are likely to remain low, however, as the government works towards acquiring investment grade status. Currently the Philippines has been given a BB rating with a stable outlook by Standard and Poor’s, BB+ with a stable outlook by Fitch and Ba2 with a stable outlook by Moody’s.

Along with its neighbouring Southeast Asian tigers, the Philippines has clocked serious growth rates in past years, impressing investors with its resilience, credited in part to increased domestic consumption and a business-friendly environment.

The Philippine economy grew by 6.4 per cent in the first quarter, showing vivid similarities to its larger archipelago neighbour Indonesia not just in terms of economic prowess, but also as nations that have similar credit ratings and a youthful population.

Analysts believe consumer sentiment will continue to be upbeat and shift up earnings for companies in the bourse.

At the moment there are no controls in place to stymie the flow of short-term investments, though some analysts believe the government should consider implementing controls similar to those seen on Bursa Malaysia, which would require traders to hold investments for a minimum period of several months.

 

 

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