By James A. Loyola
Philstocks Financial, Inc., a leading online stockbroker in the Philippines, is bullish over the prospects of the local equity market in the second half of the year despite lingering risks and potential headwinds here and overseas.
In a media briefing, Philstocks Assistant Vice President for Research Justino Calaycay Jr. said “share prices will track the positive bias of earnings (which are) seen to sustain the modest 9.6 percent year-on-year gains in the first quarter.”
He noted “Consumer spending, benefitting from easing inflation and the accommodative bias of the Bangko Sentral ng Pilipinas (BSP) will be the key driver.”
Stocks are seen to be boosted by last May’s 25 basis points reduction in the reverse repurchase rate and the aggregate 200 basis points taken off the reserve requirement ratio.
However, Calaycay warned that, “The broad economy will face challenges even as inflation concerns are moved to the side table as price pressures continue to taper off.”
“Upside risks remain, however, on account of uncertainties in oil prices in light of prevailing geopolitical tensions and a choppy global economy,” he explained.
Philstocks has revised most of its forecast numbers with gross domestic product now expected to hover between 5.9 percent and 6.3 percent from its earlier forecast of 6.2 percent to 6.7 percent.
But inflation is now expected to improve to 2.5 percent to 3.0 percent from 4.5 percent to 5.5 percent in the previous estimates. Meanwhile, the Peso is seen to settle at between P52 to P53 versus the US dollar.
Held steady or little changed were the outlook for corporate earnings, 10 percent to 15 percent which should support the PSEI’s foray towards 8,500.
“Property and retail stocks may be the fulcrum on which the market’s fortunes turn,” said Calaycay.