Stock Talk: Is it time for active investing again?
There is a lot of excitement brewing in the local stock market these days. Our deputy head for the investment management division suggests a two-stage approach to taking advantage of the trend.
In an interview with ANC’s Mimi Ong, Cristina Gabaldon, Metrobank Deputy Head for the Investment Management Division, talked about some reassuring projections for the year.
First, there’s the index goal of 7,400, which, based on the current index level, offers around 10 percent upside.
“If you look at the index level now, we’re trading relatively cheaply at 11.72 times the PE (price-earnings) multiple. Looking at the 15-year historical PE, that’s at 18 times,” said Gabaldon.
Second, earnings per share (EPS) growth is expected to be around 6%, and third, the projected rate cuts are 100 basis points, which will encourage more companies to expand and borrow more from banks.
With all these encouraging predictions, is it the “season for active investing again”? Mimi Ong asked.
“I would think of it this way. In the first half of the year, I would go for actively managed funds because there are a lot of market inefficiencies. A lot of things are not priced in yet, and you need active fund managers to make the decisions for you,” she told Ong.
“In the second half, when we see rate cuts happening, we expect a broad-based recovery for the market, and maybe you can go to passive, less-management-fee types of funds,” she said.
Gabaldon sees pontetial, too, in gaming, ports, and property. Property, in particular, is expected to benefit from the rate cuts that will come soon.
To listen to the full interview, please go to the 17:10 mark of the video here.
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ANTHONY O. ALCANTARA is the editor-in-chief of Wealth Insights. He has over 20 years of experience in corporate communications and has won various communication awards for his work in helping companies and individuals communicate with purpose, clarity, and creativity. He also has a master’s degree in technology management from the University of the Philippines. When not at work, he goes out on epic adventures with his family, practices Aikido, and sings in a church choir.