BPI Securities paints a rosy picture of PHL stock market

The Philippine Stock Exchange index (PSEi) will likely end the year at the 8,150 level as the market gains from rallies, BPI Securities Corp. said Monday.

While the market is now attracting a lot of pessimism, there may be more rallies in December, BPI Securities president Haj Narvaez said in an interview.

“It would be about 8,150, but let’s see if the momentum swings. We’re in this period now where there’s a lot of pessimism,” he told reporters in Makati City.

The PSEi closed Monday at 7771.62, down 52.97 points or 0.68% from Friday’s close.

“Optimistically, 8,150 is possible assuming there’s a rally,” Narvaez noted.

For 2020, Narvaez said the PSEi could hit the 9,000 level, given the optimism towards the economy for next year.

“The country’s macroeconomic picture for 2020 looks promising,” he said.

“We believe that the uptick in government spending and continued rise in consumption will drive the country’s GDP growth, with the PSEi earnings growth expected to replicate this year’s figure of around 12%.”

The market is now trading at around 16 times forward earnings, or near the 10-year average.

Narvaez noted that potential rate cuts, both by the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP), tend to support riskier assets.

“It is also worth noting that lower rates tend to be supportive of equities,” he said. —VDS, GMA News