The Philippines: Falling from Grace
Watch the video with Andrew Stotz or read a summary of the country profile on The Philippines.
Four Pillars of GDP: Growth hurt by net exports
High growth remains a feature of The Philippines’ economy, however, strong private consumption and investment have been greatly reduced by a severe trade deficit. This has helped The Philippines go from one of the most attractive markets just a few years ago to one of Asia’s least attractive today.
Most expensive market in Asia
Return-on-equity is relatively good, and EPS growth beats Asia ex-Japan. But The Philippines’ high valuation should offset any optimism. At 16.4x PE expected for 2017, the country has the highest valuation in Asia.
A. Stotz Four Elements: The Philippines’ rank relative to Asia
Overall The Philippines is the second least attractive in Asia considering all our four elements: Fundamentals, Valuation, Momentum, and Risk.
Fundamentals: Fundamentally, The Philippines has a good ROE and strong earnings in 2016 so far.
Valuation: The country has the highest valuation in Asia.
Momentum: It has the poorest price momentum in Asia.
Risk: The market features moderate gearing and volatility.
Strong performance in Materials and Consumer Discretionary
Top 3 largest sectors: Industrials: 25% of the market. Financials: 22%. Real Estate: 18%.
Best sector & stock: Energy: +7.2% & Semirara Mining and Power Corporation: +16.1%
Worst sector & stock: Telecom: -28.7% & Globe Telecom: -30.6%
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