MANILA -- Online stockbroker COL Financial expects the local stock barometer to reach 9,000 points by end-2020, supported by strong Philippine economic fundamentals and faster earnings growth.
“For 2020, we feel that the momentum on (gross domestic product) growth will continue and even for the market, the outlook is very good,” COL chief equity strategist April Lynn Tan said in a press briefing on Tuesday.
Tan cited the timely passage of the 2020 budget, while is optimistic that the central bank “still has room to ease monetary policy.”
“Third, for listed companies, we’re anticipating faster earnings growth. Valuations are very good and finally, the global economic outlook for 2020 is much better,” she said.
Tan said this year’s drivers of faster 2020 earnings growth are consumer, power, property and telecommunications companies.
She considered the 9,000 level their “fundamental target” as it is difficult to measure investor sentiment.
While economic fundamentals are “too robust to ignore,” Tan said the country is facing certain issues that are hurting foreign investor sentiment, including heightened regulatory and environmental uncertainties.
“Nevertheless, we are confident that the Philippines will eventually overcome these issues and as such, continue to recommend investors to buy Philippine stocks,” she added.
But Tan underscored the importance of risk management, which can be achieved through diversification and proper asset allocation, “because we don’t know when and at what level the Philippine market will bottom.”
The Philippine Stock Exchange index (PSEi) ended 2019 higher by only 4.7 percent to close at 7,815.26. (PNA)
