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For some Philippine money managers, it is still too quickly to scoop up shares during the world’s worst-performing stock exchange.

As the Philippine Stock market Index dipped below 7 100 during Tuesday’s session, taking its valuation to its lowest level since January 2016, Metropolitan Bank & Trust is one of the firms that’s staying around the sidelines. John Padilla, the actual top of equities along at the money manager, says he’s too concerned concerning the high inflation level, rising oil prices, weakening peso, increasing rates of interest and drying up liquidity.

“Everybody is bracing and positioning for a higher inflation, together with oil continuing its climb there is not almost anything to say that’s enticing to go bargain hunting at this stage,” said Padilla, who helps manage 450 billion pesos ($8.3 billion). “It once were which a buy-on-weakness strategy works, these days for prudence it’s safer to step aside and have the market take its course.”

The Philippine Stock Exchange has plunged 17% since the end of December, becoming the biggest losing equity market and taking its valuation to fifteen times estimated earnings for the year, below its five-year average. The gauge fell just as much as 0.5% to 7 095.26 on Wednesday.

The recent sell-off from emerging markets and US-China trade frictions only combined with worries covering the nation’s headwinds. Overseas investors have withdrawn almost $1.6 billion in 2018, exceeding inflows through the past four years.

Padilla said it is not improbable for that Philippine stock gauge to fall below 7 000 soon and that it may go as low as 6 600. He explained his firm changes its underweight call on the equities should consumer prices, the peso, rates and liquidity show improvements. September inflation data are due on Friday.

“You could get a better return with your money in time deposit now as an alternative to exposing it to equities, where at best you get yourself a flat return but run the risk of losing part of money if you do buy a different name,” Padilla said.

The country’s shares will face more challenges before things get well, as outlined by Michael Enriquez, the primary investment officer of Sun Life of Canada Philippines. The PSEi could stay at around 7 100 in 2010, with earnings progress of 5.5% weighed against 10% to 12% consensus, he explained. To set that into perspective, the main element stock gauge closed at almost 8 559 right after last year.

Steven Ko, who helps manage 60 billion pesos at Rizal Commercial Banking Corp., sees further risk as limited. As you move the benchmark index may drop to six 900, he admits that there’s also a chance it may possibly climb to 8 000 in 2010 as sentiment improves. He expects inflation to peak and says the peso might have already seen its sharpest depreciation in 2010.

“We are keeping our cash, but we are selectively buying some of the oversold names that happen to be already worth looking into,” Ko said. He favours property stocks since he sees higher earnings-growth prospects and likes banks since he deems them unduly hit from the rout.

? 2018 Bloomberg L.P

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