Philippine market top 3 JP Morgan picks for 2013

Manila (Philippine Daily Inquirer/ANN) - Global investment bank JP Morgan has picked the Philippines as one of its three most-favoured stock markets for 2013, marking the fourth straight year that the local bourse is expected to outperform most of its regional peers.

"We are still very bullish for 2013," JP Morgan Securities Philippines Inc. executive director and head of equity research Gilbert Lopez said in a press briefing yesterday. The two other Asian markets seen by JP Morgan as top market picks for next year are Thailand and India, citing favourable demographics as a common denominator with the Philippines.

Related story: Financial markets roll into record territory

At the beginning of 2012, JP Morgan's emerging market and Asian equity strategist Arian Mowat also cited the Philippines as among its most favoured markets along with Thailand and Indonesia. This year, he said the Philippines was still on Mowat's favoured list.

Lopez said JP Morgan had an "overweight" rating on Philippine equities for the last four years. An "overweight" rating refers to a recommendation to buy in excess of the prescribed weight in a closely followed index like MSCI Asia ex-Japan, which JP Morgan expects to rise by 15 per cent next year.

Also read: IMF lauds Phl growth amid global slowdown

JP Morgan does not target local indices like the Philippine Stock Exchange index but Lopez said that based on its price targets on monitored stocks, the PSEi might have room to rise by another 20-25 per cent from current levels. The company covers 30 Philippine stocks, at least 27 of which are part of the PSEi.

"The reason we like the Philippines is that in a global context, earnings environment is still good," Lopez said, adding that JP Morgan was expecting average earnings per share in this market to grow at a faster pace of 17 per cent next year from about 12 per cent this year.

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