Market seen regaining strength in second half

MANILA, Philippines - Local stocks remain under pressure as the bears are likely to tighten their grip on the market in the short term, but the country’s strong macroeconomic fundamentals and the optimism generated by the proposed reforms of newly-elected President Aquino’s administration would help the market regain strong footing in the second half of the year, leading online stock brokerage CitisecOnline said.

In a briefing Tuesday, CitisecOnline research head April Lee-Tan said while they are bullish on the prospects of the stock market for the rest of the year, “concerns of a double-dip recession in the US and the deterioration of the sovereign debt crisis in Europe, coupled with the Philippines’ relatively fair valuation in Asia, would make it difficult for the local market to go up in a straight path.”

Tan said the new administration’s resolve to improve government finances, cut the red tape, and level the playing field for investors could provide the boost for market growth.

“By prioritizing the country’s rising fiscal deficit, setting firm revenue and agency targets and appointing the qualified people to the different departments, the government is gearing up for a positive investment climate for all investors,” Tan said.

She said rising OFW remittances and an improving BPO industry augur well for the capital market.

She said OFW remittances have grown by a compounded annual rate of 14.2 percent in the past eight years while revenues from the BPO industry have risen 37.3 percent annually in the past five years.