THE Philippine Stock Exchange index (PSEi) is seen trading at the 6,600 level to 7,200 level this year and 7,600 to 8,200 next year, according to BPI Securities Corp.
BPI Trade CEO and Managing Director Michaelangelo Oyson said the uncertainty in the market continues because of the highly anticipated US rate hike. “The PSEi is expected to trade at a range of 6,600 to 7,200 this year, if Federal Reserve Chairman Janet Yellen does not raise interest rates. Next year, PSEi is seen at 7,600 to 8,200 trading range, if Yellen decided to raise interest rates in December this year or January next year,” he said during a media discussion.
“It’s hard to time the target because we don’t know when Yellen will increase the interest rates,” he added. He said the Yuan devaluation is affecting the stock market in a sense that it brings uncertainty in emerging-market currencies.
“The Philippines is in a very good position to weather a potential storm, given the sound economic fundamental of the country,” he said.
Oyson said BPI forecasts a 6.2-percent gross domestic product growth this year.
Amid market volatility, investors should buy quality stocks that are trading in attractive valuations. Key stock picks were Semirara Mining and Power Corp., due to strong earnings driven by power generation capacity expansion; Manila Electric Co., for continuous reduction in generation costs which spur electricity volume growth; Century Pacific Food Inc., as the weakening currency would be beneficial for its tuna exports; Max’s Group Inc., due to international expansion and upswing in margins; and Ayala Land Inc. (ALI), which has shown sustained double-digit earnings growth. ALI is rolling out the infrastructure developments that will increase ease of access to ALI communities.