REASONS FOR INVESTING IN 2011

1. Projected GDP growth of around 7% for 2011 with exports, manufacturing and industrial production leading the growth.
2. Business Expectation Index of 50.6% is the highest since 2001.
3. Increasing investors’ confidence.
4. Consumer confidence has been increasing since 2008.
5. Net New Jobs on the upswing.
6. Higher profit margins for listed companies.
7. Increasing OFW remittance.
8. Stronger peso.
9. Interest rates will remain low.
10. Inflation expected to be benign at AROUND 3% and the budget deficit will be controlled.

OUTLOOK ON LEADING ECONOMIC INDICATIORS:

• Exports to grow by around 13% to 15%
• China will slowdown a bit (minor) but our local domestic demand will be robust
• Local monetary policy will be on hold so interest rates will remain low
• GDP growth of approximately 6.7% to 7.3%

THE STOCK MARKET

• Prices are relatively still cheap with Price Earnings Ratios ranging from 12 to 15
• Earnings Per Share of listed stocks are trending higher
• PSEI is outperforming the DOW (based on S&P BMI Index)
• PSEi Forecast for 2011:  5,000