Fund flows to drive local equities market

CEBU, Philippines - The local equities market is expected to be driven by fund flows this week, according to BPI Asset Management.

In its weekly review, BPI Asset also noted that data releases locally and globally, and the influx of earnings reports from local listed corporations are also to affect the equities market.

Last week, the benchmark Philippine Stock Exchange index (PSEi) breached the 8,100-level given close to US$1 billion in net inflows before profit-taking during the last trading pulled the market back to the 8,000-level as foreign money continued to flood the market.

Year-to-date, net foreign inflows reached US$981 million.

"Investors continue to find attractive the strong macroeconomic fundamentals, expectations of strong household consumption growth, and potential for more infrastructure projects under the new administration, leading to a flow-driven rally in the equities market," BPI Asset said.

In an earlier statement, PSE President Hans B. Sicat said: "We see local and foreign investor confidence getting a boost from expectations that the Philippine economy will continue to outperform its peers. This should hopefully reflect in corporate performance."

The asset management firm also said despite the noise being faced by the telecommunications companies, most investors remain bullish on most listed Philippine firms, given the positive macroeconomic backdrop.

It was referring to the comprehensive review by the Philippine Competition Commission of the P69-billion deal between Globe Telecom and PLDT Inc. to buy the telco assets of San Miguel Corp.

On Friday, the PSEi closed at 8,025.35 points, down 0.95 percent or 76.95 points. — (FREEMAN)