{"id":329523,"date":"2024-09-17T14:12:03","date_gmt":"2024-09-17T06:12:03","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=329523"},"modified":"2024-09-17T14:12:14","modified_gmt":"2024-09-17T06:12:14","slug":"special-report-foreign-funds-lead-pseis-charge-to-7000-and-beyond","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/special-report-foreign-funds-lead-pseis-charge-to-7000-and-beyond\/","title":{"rendered":"Special Report: Foreign funds lead PSEi’s charge to 7,000 and beyond"},"content":{"rendered":"\n

Our View<\/strong><\/h3>\n\n\n\n

Our PSE index (PSEi) target of 7,500 corresponds to 11.1x current and 9.9x forward Price-Earnings (P\/E) ratio. We have an overweight rating on Banking, Property and Consumer stocks. <\/p>\n\n\n\n

Our top picks are: SM, MBT, JFC, ALI, ICT, AP and MWC.<\/p>\n\n\n\n

Analysis<\/strong><\/h3>\n\n\n\n

The PSEi’s ascent to above the 7,000 level is likely led by foreign fund inflows. As it stands, we are on a 9-day net foreign buying streak and we\u2019ve been seeing more of sustained net foreign inflows streaks lately.<\/p>\n\n\n\n

Global funds are turning to the regional market ahead of the U.S. Fed’s policy pivot. Most of them are under-allocated to emerging markets (EMs) which faced headwinds from a strong USD before. Now that the USD is weakening as US rates move lower, these funds are looking for some exposure to higher growth markets.<\/p>\n\n\n\n

Bloomberg has reported that Southeast Asian equities have firmed up their position as a favorite among global funds who are positioning for the Fed\u2019s pivot. ASEAN markets have been outperforming the regional markets for the current quarter lead by Indonesia. The Philippines comes next in terms of outperformance.<\/p>\n\n\n\n

Specific on the Phils: (1) the PSEi is up 8.88% year-to-date (market has gained 5% since the BSP\u2019s first rate cut last 15th Aug); <\/p>\n\n\n\n

(2) The peso has regained some lost ground, down by only 1% now after having appreciated by over 4% during the current quarter; <\/p>\n\n\n\n

(3) foreign ownership remains low at just 24% as of end-July (vs. over 30% pre-pandemic); and <\/p>\n\n\n\n

(4) valuations still look cheap at 10.4x current P\/E and 9.3x forward P\/E (vs. 5-year average of 14.2x and 10-year average of 15.7x).<\/p>\n\n\n\n

So far, 4 out of 5 of the outperforming regional benchmark funds are from ASEAN. Apart from the weaker USD, other factors such as attractive valuations, supportive local policies and relatively low level of foreign ownership are driving interest back to these markets, the Philippines included.<\/p>\n\n\n\n

The ASEAN markets have started to see more net foreign inflows during the current
quarter, pushing the MSCI ASEAN Index to its highest level since April 2022. Increased inflows have provided support to the region\u2019s currencies which have all appreciated during the current quarter.<\/p>\n\n\n\n

<\/div>\n\n\n\n

This report is prepared by PinoyInvestor\u2019s partner broker below. Find out more about our partner brokers<\/a> and sign up to avail their complete trading brokerage services.<\/em><\/em><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Here\u2019s a commentary on an important issue or event affecting the stock market<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1124,11],"tags":[],"class_list":["post-329523","post","type-post","status-publish","format-standard","hentry","category-commentaries-special-reports","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/329523","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=329523"}],"version-history":[{"count":1,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/329523\/revisions"}],"predecessor-version":[{"id":329525,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/329523\/revisions\/329525"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=329523"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=329523"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=329523"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}