PSEi to climb back to 7,500 level in 2017 – FMIC

The stock market barometer is expected to reach the full-year target of 7,500 this year as economic growth gains further traction, First Metro Investment Corp. (FMIC) said Thursday.

“We forecast the PSEi to reach the 7,500 level this 2017,” Cristina Ulang, assistant vice president and head of Research at FMIC, told reporters during the FMIC Annual Economic & Capital Markets Briefing in Makati City.

The PSEi closed 2016 in negative territory, down by 1.6 percent from a year earlier to mark a second consecutive year of losses.

On Tuesday and Wednesday, the first two trading days of the year, the market regained strength fueled by foreign buying and positive sentimetn from Wall Street.

Ulang noted the growth drivers for the market as follows

• a growing economy

• higher fiscal spending

• liberalized foreign ownership

• corporate earnings

Corporate results may turn out to be “positively surprising,” Ulang said.

FMIC is optimistic about companies, particularly conglomerates, banks, property and power, as well as companies in the business of consumer products, Ulang noted.

“We prefer companies that will not be vulnerable to rising interest rates,” she said, noting that the US Federal Reserve has hinted about further interest rate hikes this year.

In particular, the conglomerates have much to gain from infrastructure development. “These are very diversified and benefitting from the infrastructure spending of the government,” Ulang added. — VS, GMA News