Reforms, sectoral devt to help PSEi surpass 10,000-pt mark in 2018

Posted at 08/18/2014 7:52 AM | Updated as of 08/18/2014 11:20 AM

MANILA - Long-term prospects on the trade market remains bullish as the benchmark Philippine Stock Exchange Index (PSEi) is seen breaching the 10,000-point level in the next four years on the back of continuous reforms to address shortcomings—whether structural, administrative, institutional and even in government areas—plus the sustained expansion of major industries.

Philequity Management Inc. analyst ND Fernandez said on Saturday during the company’s Market Outlook and Joint Annual Stockholders Meeting that changes needed include the enhancement of the power situation in the country, increased expenditures in infrastructure, more public-private partnership projects, as well as development of various sectors like agriculture, manufacturing, mining and tourism, among others.

The PSEi, based on Philequity’s forecast, will end 2014 at the 7,150-mark. Late last week, it just ended beyond 7,000 points for the first time in 15 months when it jumped by 74.76 points (1.07 percent) to close at 7,061 on Thursday. Though it declined by 52.49 points (0.74 percent) to 7,008.51 on Friday, it still managed to stay at that 7,000 psychological barrier.

In the near term, the company projects the local stock index is on track to meet its targets of 7,400 and 8,100 by the first quarters of 2015 and 2016, respectively.

“We’re looking at 8,200 by 2016. So from then on, we see that we’ll grow 10 percent each year. So you’ll hit 10,000 by 2018,” he told reporters at the sidelines of the event held in Meralco Center, Pasig City. Such target set by Philequity in January is in light with the economic and political issues now happening and in the near future. “We considered those factors already. But we don’t see that derailing was already in place. The bull market is already in place,” Fernandez said.

The chance that the stock market will surpass Philequity’s target is certain, according to analyst Miguel Agarao.

“There’s a possibility of an upgrade. But for now, we’re sticking to our forecast,” he said.

While he conceded that it’s difficult to predict what will happen in the upcoming months, he still places the Philippines on the positive light to go past their targets.

This, he said, is likely if they see good catalysts to continue like “more infrastructure spending” or if the US markets go to a “new high.” Amid geopolitical tensions globally, Agarao said that the world is in a “bull market” as stocks did not correct but rather expanded further, thus, signifying its “underlying strength.”

“The trajectory is still intact. We will break [the] 8,000 [point level] in two years,” Agarao said.

For more Businessmirror stories, go here.