PSEi to close 2018 at 7,500 —BPI Asset Management

After entering bear territory and hitting near two-year lows, the benchmark PSEi is poised to recover above its critical support level at 7,000 by the end of 2018, BPI Asset Management and Trust Corp. said Thursday.

The Philippine Stock Exchange’s bellwether has been trading between 6,800 and 6,900 due to overseas headwinds and the absence of strong catalysts on the domestic front.

“Given the peso’s recent strength, there’s a possibility the stock market will end the year somewhere between 7,500 and higher,” BPI Asset Management and Trust Corp. vice president and head of research Carlos Jalandoni told reporters on the sidelines of a forum in Makati City.

The dollar’s weakness precipitated a shift in the US political landscape, with the recently concluded mid-term elections altering the once Republican-dominated House of Representatives into a House of Democrats—a setback for Republican President Donald Trump.

“I think that will fuel some money back to emerging markets,” Jalandoni said.

The equities market will also benefit if the price of crude continues to drop.

“If we continually see the price of oil drop, economies running on a trade deficit like ours will benefit from weaker oil so the current account deficit will not be as wide. There will be no reason for currencies to be weaker so there will be a recovery in sentiment,” Jalandoni said.

“If inflation drops, that will strengthen peso. Interest rate hike will also strengthen the peso so it will be favorable for stocks,” he added. —VDS, GMA News