Expert is cautiously optimistic on stocks

ALTHOUGH most stock market watchers are still fearful due to the impact of COVID-19 and other factors, an expert said there is a reason to be cautiously optimistic on the Philippine stocks as the economy has started roaring back to life.

Mark Joseph Fernandez, chair of the Finance PH Group of Companies, said he understands the worry of most investors as the market has been flat since last year owing to the impact of the pandemic, but his optimism hinges on the expectation that the "earnings or net incomes are to grow on account of the bouncing of the economy due to less effects of COVID-19 - a lot of people are already vaccinated."

"Further, historically election years usually have a positive effect on the stock market," said Fernandez.

He is one of the most copied popular investors in eToro Philippines who specializes on dividend stocks. He currently has more than 300 local and international copiers. In 2021, he was able to generate a total 27.58% annual return.

He said he understood why investors were still hesitant to go all in in the Philippine stock market despite the current price earnings ratio of the market at 13.1x (March 23, 2022) which is still lower than the average 14.2x for the past three years. "Investors are just indifferent despite the expectation that there will be an around 23% growth in net income this year of the companies in the PSE from the previous year," he said.

Fernandez added that among the undervalued sectors include technology, consumer discretionary, real estate and industrials.

He said that tech, consumer discretionary, real estate and industrials are set to take significant uptick while materials, financials, utilities are expected to recover from slump, while he foresees a little growth in consumer