PSEi to reach 9,000-mark next year
Credit to Author: Tyrone Jasper C. Piad| Date: Mon, 25 Nov 2019 17:14:38 +0000
The benchmark Philippine Stock Exchange index (PSEi) is seen touching the 9,000-point level in 2020 on the back of upbeat outlook for the local economy.
BPI Securities Corp. President Haj Narvaez, on the sidelines of an event in Makati on Monday, told reporters that the Philippines’ economic growth, coupled with policy rate cuts, would drive market sentiment next year.
“We’re quite optimistic that 6-percent growth is possible,” he said.
“The country’s macroeconomic picture for 2020 looks promising. We believe that the uptick in government spending and continued rise in consumption will drive the country’s GDP (gross domestic products) growth,” he added.
According to latest data, the national government spending in the first nine months reached P2.62 trillion, up 5.5 percent or P137.2 billion from the previous year. Of the total, P546.3 billion was spent for infrastructure and capital outlays.
The Philippine economy grew by 6.2 percent in the third quarter of the year from 6.0 percent a year ago, driven by growth in government spending and consumption.
Meanwhile, Narvaez said the Bangko Sentral ng Pilipinas (BSP) might implement policy rate cuts next year to “provide cushion against slowing growth globally.”
BSP has cut the monetary policy twice, bringing the overnight reverse repurchase facility to 4 percent. Interest rate on the overnight deposit and lending facilities stood at 3.5 percent and 4.5 percent, respectively.
But the BPI Securities chief warned the ongoing trade spat between the United States and China would continue to dampen market sentiment next year.
The easing inflation should also be watched out, he said, as chicken prices are seen to rise. Should consumer prices increase, Narvaez said this might hinder the central bank from cutting interest rates.
Inflation rate weakened to 0.8 percent in October — the lowest since the 0.9 percent notched in May 2016 — from 0.9 percent a month ago and 6.7 percent a year ago.
Narvaez added the possibility of power prices increasing amid supply shortage could potentially weigh on the PSEi as well.
For this year, Narvaez said the PSEi could end at 8,150 should there be rally in December.
PSEi down on profit taking
Investors cashed in for gains on Monday, starting the week in the red territory.
PSEi dipped by 0.68 percent or 52.97 points to end 7,771.62 while the wider All Shares fell 0.55 percent or 25.50 to close at 4,653.54.
“Lack of fresh local leads urged profit taking today, pulling the local market down,” Philstocks Financial Inc. said in market comment.
All sectors ended in the red territory except for mining and oil, which rose 0.63 percent.
Volume turnover stood at 1.04 billion shares amounting to P4.65 billion.
Decliners led advancers, 118-68, while 46 issues were unchanged.
Wall Street was up. Dow Jones, S&P 500 and Nasdaq rose by 0.39 percent, 0.22 percent, and 0.16 percent, respectively.
In Asia, Tokyo climbed 0.78 percent, Shanghai surged 0.72 percent, Hong Kong added 1.50 percent, Seoul gained 1.02 percent, Singapore was up 0.07 percent, and Thailand increased by 0.87 percent.
Jakarta slid 0.62 percent and Vietnam fell 0.15 percent.