Stock Smarts Market Outlook 2014 (Part 3): COL Financial ‘s April Lee Tan | Marvin Germo

Stock Smarts Market Outlook 2014 (Part 3): COL Financial ‘s April Lee Tan

By: Marvin Germo | January 24, 2014

I started the outlook series stating that 2014 is a year of positioning, a year for us to position our stocks for the greater days ahead for the PSE.  Then BPI Trade’s CEO Mike Oyson pushed the envelope further stating that 2014 is a year of stock picking, its about selecting the right themes, growth companies and cheap stocks.

For part 3 of our outlook, COL Financial’s very own April Lee Tan, will weigh in on where she thinks the market is headed.  I believe April is also one of the most sound and relevant Fundamental Analysts of our time.  My desire is that you use whatever information you have here to help you make amazing choices on your trades and investments.

We’re currently at the final leg of January 2014.  The market is up, the tide is set.  It’s time for us to make the most out of what is in our hands!

April Lee Tan Outlook 2014

1.  What is your outlook for the PSE this 2014?

2014 is year of accumulation.

2.  Given that the FED disclosed that they would taper off Q.E., in your opinion what is the effect of this to our market?

The QE is more negative on other Asian countries than Phils because they have a deteriorating current account position. This means that if interest rates increase in the US, they are more vulnerable to capital outflow and a sharp depreciation of their currencies. They would also be forced to increase interest rates.

3.  Sector to watch out for?

In the Philippines, the CA position is much stronger. However, the spread between peso and US sovereign bond rates is very narrow. Aside from mere contagion, I think this is exerting pressure on the peso to weaken and for interest rates to adjust upwards.

 4.  Will the PSEi again hit 7,400, if so what is the trigger for this to happen?

Sectors: No perfect sector. In terms of earnings growth, consumer is the best, but valuations are not attractive. In terms of valuation, banks and properties are interesting, but those are considered most vulnerable to rising interest rates.

PSEi 7000

 5.  Year end projection of the PSEI?

As for 7,400, I still think we can reach it. The correction we are seeing today is largely due to valuation issues and impact of higher interest rates on valuations. However, earnings growth trend is still clearly up as economic growth trajectory remains upward. Eventually, fundamentals should catch up with price.

6.  If there is one stock that you are bullish about what would it be and why?

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7.  Message to newbie and veteran investors a like for this 2014?

View this correction as an opportunity to accumulate stocks for the next leg up of the market.

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