Stocks rose Wednesday to end a three-day decline, after Templeton Emerging Markets Group said Southeast Asian shares still offer good value and that political worries about the region are “overdone.”
“They’re not really expensive in the environment that we’re in now,” Templeton executive chairman Mark Mobius said in a live interview on Bloomberg’s Facebook page at the Bloomberg Markets Most Influential summit in Hong Kong. “Southeast Asia is benefiting from the growth of China and increasingly from the growth in India.”
The Philippine Stock Exchange index, the 30-company benchmark, rose 29 points, or 0.4 percent, to close at 7,586.96 Wednesday. This lifted total gains this year to 9.1 percent.
The heavier index, representing all shares, also gained 21 points, or 0.5 percent, to settle at 4,517.41, on a value turnover of P6.4 billion.
Fifteen of the 20 most active stocks ended in the green, led by builder Megawide Construction Corp. which jumped 6.5 percent to P15.76 and casino operator Bloomberry Resorts Corp. which advanced 6 percent to P4.92. Nickel Asia Corp. gained 3 percent to P6.98, while concessionaire Manila Water Co. Inc. rose 2.6 percent to P29.60.
The 12-month price-to-earnings ratio for the MSCI South East Asia Index has risen from this year’s low of 12.5 in January to a 16-month high of 15.2 in August amid a rally in emerging-market assets. It was 14.9 on Wednesday, compared with 12.5 for a measure of developing-nation equities.
Overseas investors pulled money from the Manila bourse for 24 straight days through Tuesday amid concern Philippine President Rodrigo Duterte’s abrasive style is deterring investors, while in Indonesia a disappointing tax amnesty has contributed to outflows. Investors are still pumping money into Thai equities even amid uncertainty over the health of the 88-year-old king, who has been a source of political stability throughout this reign.
“There are individual problems in each of the countries,” said Mobius. “There’s concern about Duterte in the Philippines, which I think is overdone. There’s concern about reforms in Indonesia and the political environment in Thailand. I don’t see downside anywhere.”
Foreign funds have pulled $351 million from Philippine shares this month and $300 million from Indonesia, while adding $525 million to Thai equities, exchange data show. While they’ve come off highs reached in July or August, most of the region’s main share gauges are still up for the quarter. The Jakarta Composite Index advanced 7.5 percent, the SET Index rose 3 percent and the FTSE Bursa Malaysia KLCI Index increased 0.8 percent. Only the Philippine benchmark measure has fallen, dropping 2.8 percent.
“I like the consumer sector in Southeast Asia because per capita incomes are going up,” said Mobius. “On a selective basis, I like technology.”
Meanwhile, Tokyo stocks led a retreat in Asian markets Wednesday as the yen recovered, while regional energy firms struggled with crude prices on concern about the chances of success at an upcoming producers’ meeting.
The OPEC oil cartel and Russia are due to meet later Wednesday in Algeria to discuss a global oil glut and overproduction that has strangled prices for more than two years. With AFP, Bloomberg