Sun Life Investment Management and Trust Co. (SLIMTC) is looking at a 8.35 percent economic growth for the Philippines this year, enough to help the Philippine Stock Exchange index (PSEi) hit as high as 7,775.
The PSEi closed Wednesday down 33.31,a 0.51 percent drop to 6,477.36.
At 7,775 points, the index translates to a 20x price-to-earnings multiple, according to Michael Enriquez, SLIMTC president.
Enriquez said a confluence of factors helps the Philippines to be in a better spot compared to 2022 given the high inflationary environment that beset economies last year.
Enriquez, however, said the projected recession in the US and other developed economies poses a challenge for the economy and the equities market’s continued growth.
But for now, the Philippines should take advantage of the stabilizing peso as a result of a resilient overseas Filipino remittances and business process outsourcing revenues.
SLIMTC expects the peso to average at 55 to the dollar, noting that it will not have the “wild swings” it displayed last year though it will still trade between 52 and 57 still.
Yesterday, the peso closed at 56.15 to the dollar, up from 56.31 on Tuesday.
Enriquez said the Bangko Sentral ng Pilipinas (BSP) has reached an inflection points in its rate hike cycle, and pundits expect the central bank to pause its rate hike in the latter part of the year before cutting rates starting next year.
“So I think this is something positive not only for the overall economy, but also for the financial markets, both the equity and for the bond market. If you see rates start going down, stocks price will start becoming more valuable,” he said.
“ I think for the first time, we can really claim with conviction that inflation was really starting to taper off,” he added.
SLIMTC pegs inflation to average at 5 percent this year.
The US Fed is also expected to be less aggressive in its rate hike this year.
At yesterday’s trade, the broader all shares index was down 16.75 points or 0.48 percent to 3,458.30.
Losers edged gainers 94 to 83 with 49 stocks unchanged. Trading turnover reached P24.54 billion.
Foreign funds were net sellers worth P4.15 billion.
The peso, meanwhile, opened at 56.30 and hit a high of 56.10 and a low of 56.34. Trading turnover reached $1.06 billion.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. noted that for the month of May, the PSEi is down 2.2 percent. On a year -to- date basis, the PSEi is down 1.4 percent.
The index closed 2022 at 6,566.39.
Most actively traded SM Prime Holdings Inc. was down P1.15 to P32.70. Monde Nissin Corp. was down P0.10 to P8.10. Ayala Corp. was down P20 to P660. PLDT Inc. was down P23 to P1,200. Ayala Land Inc. was up P0.05 to P26.30. JG Summit Holdings Inc. was down P1.65 to P48. BDO Unibank Inc. was up P1.70 to P136. SM Investments Corp. was up P18.50 to P929. International Container Terminal Services Inc. was down P4 to P195. Jollibee Foods Corp. was down P1 to P235.60.
