As you can see, The Philippine stocks' main index grew by a modest 1.33% from last year. After breaching an intraday record high of 7,403.65 last May 15, 2013 PSEi has since experienced an up and down ride, primarily attributed to tapering talks from the US Fed. It even reached an intraday bottom of 5,562.13 last August 28 with many stocks analysts signalling the start of the bearish cycle. In the end, the local bourse only managed to squeeze-in a 77.10 increase from prior year's close. PSEi increased by 32.95% last 2012.
2013 Performance per industry sector
Only holding firms and services sector posted better results this year, gaining by 5.41% and 8.20% respectively. By comparison, all the sector indices increased in 2012 except mining & oil. The industry is still marred with uncertainties brought about by issues concerning the environment and profit sharing with the government. Mining & oil has declined by 17.43% and 38.59% for 2012 and 2013, respectively.It should be noted that while most of the sector indices have declined, only mining & oil has declined from in a two-year cumulative data. Here is a comparative change from 2011 to 2013 levels for the Philippine stocks indices:
2013 vs 2011 % change
PSEi 34.72%
all shares 18.70%
financials 47.38%
holding firms 54.97%
mining & oil -49.30%
property 48.82%
services 15.45%
industrial 22.84%
Outlook in 2014
What I realized looking at the data was how extraordinary 2012 had been for Philippine stocks. Excluding mining & oil and services, all of the sector indicators have gained by more than 20% in 2012! I do not wish to imply that it was overvalued, but the massive gains were posted in a short span and thus became more susceptible to bigger drop. As they say, the higher the climb, the harder the fall.
The close of 2013 has more or less dragged us back to our previous 2011 figures. Factoring in the country's growth targets, I expect a more stable and more sustained ascend from here on. I believe holding firms will still continue to move up given that these companies have the large resources from growth expansion. Companies like MPI, SM, AC, JGS - they are in the position to partner with government infrastructure projects, along with companies in construction business like MWIDE, EEI, HLCM and LRI. 2014 will also push capitalization higher for financial sector in compliance with the Basel III implementation. BPI and PNB have started to raise additional fund via stock rights offer just before the year's close. Fear of a bubble still lingers for property sector while speculative stocks like mining & oil companies will most likely be avoided, especially when other "less risky" stocks can outperform.
Related:
A Look at Initial Public Offers in 2013
Things You Should Know About Exchange Traded Funds
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