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Market Outlook 2019: What to expect

PH’s 2019 Market Outlook and the bright offerings that one can tap

With consumer prices surging further, gnawing on growth and investor confidence, the Philippine economy could turn even uglier, but the environment will get much better in 2019, Sun Life Financial Philippines said.

“There will be more negatives before we see positives in the economy but it doesn’t mean there’s no opportunity to enter markets right now,” Sun Life Chief Investment Officer Michael Enriquez said, adding that this was the time to pick up equities.”

During the 2019 Market Outlook briefing, Enriquez projects next year’s inflation to be at 4.1 per cent. As the market is expected to experience multiple swan dive dips, now is the perfect time to invest on equities to take advantage of the opportunities for next year. While this year, the gross domestic product (GDP) growth is forecasted to 6.7 per cent from 7 per cent as higher-than-expected inflation had curbed consumption.
On the other hand, inflation likely probed 7 per cent in September and has yet to peak, and is expected to remain under pressure, especially with crop damage inflicted by recent weather disturbances in particular Typhoon “Ompong,” and peak at slightly above 7 per cent by the first quarter of 2019.

Amid a challenging macroeconomic environment, Sun Life is quite bearish on the stock market, forecasting the Philippine Stock Exchange index (PSEi) to end the year at 7,000 to 7,200 based on a “bottoms-up” approach which values individual stocks to come up with the index forecast rather than using a general price-to-earnings assumption.

Enriquez also added that starting next year,  inflation should “normalize” from around 5 per cent this year.  This is seen to further ease to 3 per cent by 2020 or well within the 2-4 percent goal of the inflation-targeting Bangko Sentral ng Pilipinas (BSP).
While based on Sun Life’s assumption, inflation would normalize by next year mainly hinged on the passage of the rice tariffication bill that will pave the way for the replacement of the quantitative restrictions on rice imports with tariff, removing unnecessary government intervention in the rice market, and thereby ensuring enough supply.

Inflation measures the average increase in the prices of goods and services typically consumed by local households. The shortfall in rice supply, along with the upsurge in oil prices and the higher excise taxes on vehicles, fuel and sweetened beverages, all contributed to the spike in the inflation rate this year. As inflation normalizes by 2019, the Philippine domestic economy could grow at a faster clip of 7 per cent, shoring up the value of the peso, which is currently among the weakest currencies in Asia-Pacific this year.
Based on Sun Life report, it is expected for the peso to stabilize at P53.80:$1 by end of 2018 and appreciate to P52.90:$1 by 2019. The currency appreciation projected this year factored in the seasonal influx of overseas remittances during the Christmas season as well as a massive initial public offering (IPO) worth as much as P141.8 billion planned by San Miguel Food and Beverage this year.
Lastly, Sun Life also expects the PSEi to recover to the 8,000 levels by next year.
Clearly, as the markets will correct eventually, it’s a good time for people to review and rebalance their portfolio. Learn more about investments at https://www.sunlife.com.ph/PH/Investments.
Meanwhile, the Sun Life Asset Management Company, Inc. (SLAMCI), a subsidiary of Sun Life Financial, has partnered with Banco De Oro (BDO), Bank of the Philippine Islands (BPI), and Metrobank beef up its Bills Payment Program as part of its commitment to make investing an even more delightful experience for its clients.

“We’d like to offer clients comfort and convenience in their investing experience, knowing just how demanding their daily lives can be. By enhancing the Bills Payment Program, and with the help of our bank partners, our clients can effectively integrate investing in their lifestyle and be on their way to prosperity.” – SLAMCI President Valerie Pama

The Bills Payment Program enables clients to make additional investments in peso-denominated Sun Life Prosperity Funds via a bank partner’s various payment channels: online banking, mobile banking, ATMs (applicable to 800 only) or over-the-counter (OTC).
For online banking payments, Sun Life Prosperity Fund investors who are accountholders of the partner banks can make additional investments by enrolling the intended Sun Life Prosperity Fund/s as a biller in the banks’ respective online platforms, then proceeding with payment. This functionality can also be enjoyed using the banks’ respective mobile applications. For OTC payments, investors simply need to drop by any partner bank branch, fill out a payment slip, and hand the payment to the teller. SLAMCI is set to partner with more banks in the coming months.

Also, as part of SLAMCI’s commitment to provide better products and services to its clients, and in its aim to promote financial awareness and contribute to financial inclusion, it has recently reduced the minimum initial invest in Sun Life Prosperity Funds for as low as P1,000. To inquire, visit www.sunlifefunds.com. You may also get the new SLAMCI forms in all Sun Life Client Service Centers and via www.sunlife.com.ph.

Sun Life Asset Management Co. Inc. (SLAMCI) was recently awarded as the Best Asset Management Company in the Philippines for 2018 by Euromoney, for providing relevant wealth solutions and excellent service that brings great rewards.

#SunLifeMarketOutlook #BrightOfferings #SLAMCI
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Written by editorial team

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