Stock Smarts Market Outlook 2014 (Part 4): Sun Life‘s Mike Enriquez | Marvin Germo

Stock Smarts Market Outlook 2014 (Part 4): Sun Life‘s Mike Enriquez

By: Marvin Germo | January 27, 2014

It’s a brand new week, a brand new chance to trade, invest, and move closer towards financial freedom.  The market was so good last week where we had 5 days straight of upward closes.  Factoring in the decline we had today, I believe as long as we hold 6,000 we should be better off than where we were a couple of weeks back.  January 2014 proved to be revelation for me, as we are seeing more Filipinos being wise in positioning stocks and not just going with what’s popular or hyped up.

We are now in part 4 of our stock market outlook series!   I started Part 1 with setting up the theme of 2014 being the year of positioning, while BPI Trade’s CEO Mike Oyson pushed the envelope further stating that 2014 is a year of stock picking, about selecting the right themes of growth companies and cheap stocks.  Then COL Financial’s very own April Tan named 2014 as a year of accumulation.

What’s amazing about this is all of us are optimistic about what’s happening in the country.  Foreign sentiment may wind down but what’s great about it is its us Filipinos who know what’s going on inside the Philippines and it is us locals making it happen.  For this portion of the outlook series, we are having Sun Life of Canada’s Chief Investment Officer, Mike Enriquez, share his expertise. I love his wit in how he answered the questions and I also like how he balanced the effects of both local and external factors that may influence the PSEi.

May this article prove fruitful to you as this goes about your investments.  My greatest desire is to see you prosper and move towards your dream of financial freedom.

 Mike Enqriquez Sun Life

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

We expect aggregate earnings growth to be at 6% – 8% due to a slowdown in the banking sector. We expect the 1st half to be volatile in the absence of any positive news. 2nd half activity would probably pick up as we see more direction on company earnings growth and the rebuilding efforts of the government to boost GDP growth.

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? 

Because of the gradual withdrawal of the monetary stimulus, we expect the Peso to continue to depreciate against the USD; thus we expect foreign funds to continue to pull out of the Philippines in favor of US markets.

3.  Sector to watch out for? 

We continue to favor the consumer and property sector as domestic liquidity continues to be strong and the BSP is still supportive of low policy rates

URC stocks

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

Maybe not this year. Because of lower earnings growth expectation, and foreign funds favoring developed markets, it would be difficult for the market to test the recent all time high.

We can probably see the market retest the all-time high next year as earnings growth is expected to be much higher due to low base effects

5.  Year end projection of the PSEI?

At this point, we are looking at 6500 index target base case scenario – about a 10% appreciation

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

Skipping this question since we manage pooled funds

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

Don’t join the bandwagon. What’s good for others might not work for you 

Don’t let emotions rule investment decisions. The excitement of seeing money growing quickly when sentiments are posi­tive often leads people to buy when prices are high, just as fear in a down market often leads people to sell when prices are low.

Be careful who you deal with. In an up market, everyone’s an expert. There is no shortage of people advertising their gains, giving advice and enticing you to invest your hard-earned money. But in a down market, many suddenly disappear. Look for the ones who will be with you through the ups and downs, who will address your concerns, handhold you and help guide you in deciding what to do.

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My book Stock Smarts: Stock Investing Made Easy is now out if you would like to grab a copy you may Click the Link to Register and Order.  Thank you for making Stock Smarts a National Bookstore Bestseller!

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*picture via ANC’s On The Money