2015 Outlook, part 3

By Randell Tiongson on January 12th, 2015

There has been a lot of attention with regard to the Philippine stock market today than it was a few years ago. Thanks to great performance of the Philippine stock market, more people are opened in growing their wealth through equity investing. Will the rally of the past continue in 2015?

I am proud to present the 2015 Outlook of a former co-worker, a stock market advocate and the person behind the growing Traders Apprentice Pilipinas (TAP) — Mr. Tony Herbosa!

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The 2015 Outlook of Tony Herbosa

2015 is “make or break” year and we do not really know moving forward.

As of today, I have been consistent that we are on the final stages of a bull market rally that started in 2009, specifically that we are on Wave5. For most of 2014, this view that mostly “greed stocks” move on a wave5 rally vs. “Index stocks or heavyweights” was confirmed specifically in nickel plays ($NIKl, $Marc, $Ore, $CMT volume), gaming ($LrW, $PLC, $Bloom) and some property stocks like $MEG that still climbed in 2014. As we ended the year, a few IPO’s even sucked the liquidity out of the directionless PSE/market causing a retest of the 7,000 critical floor.

The US$ is expected to be stronger which is not bullish on Emerging Markets or EMs ($EEM) in general and it never happened that weakening peso, medium term, was bullish on the PSEi. My advice, we break 7,400 then the issue of “global de-leveraging” is postponed and the would signal the continuation of our Wave5 rally for most of 2015. If we do not break 7,400 in next two to three months something is very off. This has nothing to do with how the PHL economy is doing. This is all about the global shifting of funds, either foreign money stay in EMs, be selective with EM currencies or stocks which are strong like EM-PHL vs. EM-Argentina, or mainly leave for US$ assets. Already global investors are moving to risk-less US treasuries, not good.

My advice: I would get out of stocks if we go below 7,000 once again if not focus on just a few nickel stocks which will be spared given global nickel projections/prices for 2015. But the PSEi is less predictable in 2015, given foreign funds make up 60% plus of our trading. The ground is somewhat shaky underneath.

 

imageWith more than 2 decades in the financial industry, Tony Herbosa is one of the country’s most active and noticeable stock market advocates. With an MBA from the prestigious Wharton School in the U.S., Tony has worked for many financial institutions both here and in the U.S. such as Citibank, Solomon, PCI Bank, Ernst & Young, and as CEO of PNB Capital. Tony is the influential person behind one of the most active stock market education forums in the country today, the TAP. Tony Herbosa has been actively engaged with the Philippine Stock Market since 1992.

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2015 Outlook, part 3