051907: JP Morgan turns 'very bullish' on Philippines

May 19, 2007
Updated 05:33:35 (Mla time)
Elizabeth Sanchez-Lacson
Inquirer

MANILA, Philippines -- Global financial services giant JP Morgan is telling investors to fatten their exposure in the Philippines, saying the country’s prospects are boosted by low interest rates, a strong peso, reforms in the power sector, an encouraging mining industry, and government mega-infrastructure spending.

JP Morgan is keeping its “overweight” call on the Philippines and advises investors to increase their holdings in the country, JP Morgan Securities (Asia Pacific) Ltd. chief Asian and emerging markets equity strategist Adrian Mowat said after an investor conference late Thursday.

It was JP Morgan’s first investor conference in the Philippines since the 1997-98 Asian economic crisis affected the country. The conference attracted around 80 fund managers, mostly from abroad.

“Now, investors are waking up to this market and people are increasingly going to a plane and coming back to Manila,” Mowat said.

“You live in a relative world when you look at emerging markets,” he said. “The Philippines started performing only in August last year. The reforms in the power sector are all relatively new, the movement in onshore bond yields is relatively new.”

JP Morgan Securities Philippines Inc. head of equity research Kelly Lim-Bate said there were four key drivers that would keep investors glued to the Philippine growth story this year.

She said these were a strong peso because of the country’s similarly robust balance-of-payments position; interest rates that would continue to be low and in turn spur loan growth; the government’s P1.7-trillion infrastructure spending program; and foreign direct investments coming back into the country, specifically in manufacturing, power and mining.

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