By Leslie D. Venzon
MANILA, Nov. 16 (PNA) — The benchmark Philippine Stock Exchange index (PSEi) is expected to hit 7,800 next year after regaining the 7,400 level by the end of the year on the back mainly of the country’s positive economic outlook.
Michaelangelo Oyson, managing director of Bank of the Philippine Islands (BPI) Securities Corp., considered 7,886 a “reasonable” target for next year based on assumed earnings growth of 12 to 13 percent.
“The economy is doing very well, it is going about six percent. There is a lot of liquidity in the market (and) interest rates are rising but still very low right. Some of the companies are still awash with cash and this is just in line with the general growth in the economy,” Oyson said in an interview on the sidelines of a press briefing.
He said the liquidity is coming from four pillars: the overseas Filipino workers (OFWs) remittances, business process outsourcing (BPO), tourism and foreign direct investments (FDI).
However, Oyson noted that reaching the 8,000-mark is “a bit of a challenge” given the headwinds in the banking, telecommunications and property sectors.
He said the continued strong liquidity growth is imperative for the local stock market reaching the highest ever level.
“If this liquidity comes in to the Philippines,… yes we can hit 8,000. Companies have to exceed expectations in terms of earnings… If our GDP (gross domestic product) numbers surpass an upside (target), we will attract liquidity,” he added.
Further, Oyson said the PSEi is expected to regain the 7,400-mark towards the year-end assuming there is no liquidity shock.
The PSEi is hovering at around 7,200 this month. (PNA)