Peso at P46/$, PSE to test all-time high in '07- Philequity

The peso may strengthen to P46 per dollar by end 2007 and the stock market's main index may test its all-time high of 3,447 next year, with the economy getting a boost from mineral exports and dollar remittances from overseas Filipinos, said local fund management group Philequity Fund Inc. "While some global banks and foreign houses have forecasted the peso to reach P48 to P49 to the dollar, it should be noted that these banks paid emphasis to the fiscal state of the government, growing dollar earnings from BPOs, and the strong OFW remittances," Philequity said in a note dated November 6. "But what most economists have yet to incorporate into the picture are the additional strong dollar earnings from mineral exports which will grow by leaps and bounds." The fund said the country will largely benefit from a commodities boom, following in the footsteps of Latin American countries like Brazil, which exports steel, iron ore, sugar and soybeans. The Philippines has significant mineral exports like gold, copper and nickel. Philequity said that the nature OFW remittances have changed from being merely financial assistance for relatives, into investments tools. "OFW money has become more productive as these are now being used for investments. In fact, OFWs have become a major market for property companies," Philequity said. The brokerage firm also said China's economic strength will sustain the regions improving momentum. Meanwhile, Philequity expects economic activity and prospects to sustain the stock market's bull run until next year. "The Philippine stock market is just catching up with other markets which have made new highs, surpassing the levels achieved prior to the 1997 financial crisis," the firm said. "While we see a correction in global equities in the short-term because of the strong run-up in the past two months, Philequity sees the correction in prices as healthy and advises investors to take advantage of this pullback as an opportunity to buy." - Patricia de Leon, GMANews.TV