Stocks seen to rise

LOCAL STOCKS are seen remaining buoyant on the back of large foreign flows but some investors may turn increasingly reluctant to load up more equities due to valuation concerns.

Last Friday, the main-share Philippine Stock Exchange index closed at a new record high of 5,016.3, rising by 1.6 percent. For the week, the index gained 123.3 points or 2.5 percent.

“I think the market will continue to remain strong but the growth will be much slower as markets remain overbought,” said Conrado Bate, president of leading online stock brokerage Citiseconline.com. “Foreign funds flow will continue to be the main driver of the market.”

While prices are not yet extremely high relative to earnings, except for some Ayala stocks, Eagle Equities president Joseph Roxas said it was very challenging to anticipate where the peak would be.

For those anticipating the index would peak at 5,000 to

5,100 this year, Roxas noted that since this has been achieved too soon, it would be difficult to set new targets.

On the other hand, Roxas said “there's just a lot of money out there that doesn't want to stay in Europe” and the country's apparent “mostfavored nation” status was attract- ing a lot of these funds.

Year-to-date, the PSEI has gained 14.7 percent. Based on the latest PSE data, foreign investors were net buyers year-to-date as of March 1 with net buying at P23.41 billion, reversing P8.01 billion in net selling in the same period in 2011.

Total market capitalization as of March 1 stood at P9.38 trillion, up 6.2 percent from P8.83 trillion in the same period last year.

Total value turnover as of March 1 reached P339.99 billion, 69.7percent higher than the P200.38 billion registered in the same period last year.