RP stocks poised to hit new record high - Macquarie

Brokerage firm Macquarie Research Equities has retained its bullish outlook on the local stock market, saying the recent losses suffered by the bourse does not indicate it will turn into a bear market. In a note distributed to the media on Thursday, the research firm said the Philippines is poised to beat its all-time high of 3,448 points, as it is the only stock market in the Southeast Asian region which has yet to set a new index high in recent rallies. "(We are) retaining our bullish outlook. We reaffirm our positive stance on the Philippines," the firm said. Macquarie said it has an index target of 3,550 points for the Philippine Stock Exchange, which is higher than the stock market's record high set in February 1997, before the Asian financial crisis. Macquarie said that fundamentally, investors have nothing to worry about, with the Philippines' macroeconomic picture "quite positive" and corporate earnings still strong. "Growth prospects are stronger and the political environment is more stable, in sharp contrast with the situation in previous years," Macquarie said. The Philippines posted a 5.4-percent growth in the economy last year, marking the 5th consecutive year when the country registered an improvement in the gross domestic product, the total number of goods and services produced in the country, grew above 5 percent. "The Philippines should still achieve fairly strong earnings growth of 16 percent in FY07 and even higher thereafter, thereby supporting the market's ascent," the firm said. The local bourse had hit 3,389 late in February or a 13.6-percent improvement year-to-date, before gains were wiped out by the recent global sell-off triggered by a large decline in China's stock market. Among issues, Macquarie said its top picks were Banco de Oro, SM Prime, Philippine Long Distance Telephone Co., Globe, Metrobank, Bank of the Philippine Islands and Universal Robina Corp.- Cheryl Arcibal, GMANews.TV