By JAMES A. LOYOLA
There is cautious optimism in the local stock market and stock brokerage Philstocks Financial, Inc. forecasts that stronger corporate earnings will propel the Philippine Stock Exchange index (PSEi) to 8,700 to 8,800 by the end of 2020.
In a press briefing, Philstocks Vice President for Research Justino Calaycay Jr. said “there is enough on the table to get the optimism going.”
Philstocks Senior Research Analyst Japhet Tantiangco said share prices will be buoyed by robust company earnings amid sound economic growth.
However, Calaycay said “the risks appear to have become heavier,” pointing out that, “the elephant in the room, one that could derail all this, is regulatory risk. Thus, our call for caution.”
Aside from regulatory risks, Tantiangco said other issues that could weigh down the market include the US-China trade negotiations, Brexit, tensions in the Middle East and North Korea, as well as possible peso depreciation which could put a dent on foreign investors appetite.
Philstocks Reasearch Associate Claire Alviar said stocks that look good for long-term investment include Ayala Corporation, GT Capital, SM Investments, Ayala Land, Robinsons Land, Security Bank, Jollibee, Max’s Group, MacroAsia, and GMA Network.
On the other hand, stocks that may see faster price appreciation include Jollibee, Max’s, Ginebra San Miguel, ALI, BDO Unibank, Security Bank, Cebu Air, First Philippine Holdings, Globe Telecom, IMI, Lopez Holdings and MacroAsia.
Philstocks Research Associate Piper Chaucer Tan said the real estate sector is also seen to perform well this year given strong office leasing demand from the outsourcing sector, offshore gaming operators, and flexible co-working operators.
However, the sector also faces risks from the rise in the use of artificial intelligence which could stunt growth in outsourcing, while uncertainty over taxes and incentives could drive away investors in the outsourcing industry to India and other countries.
The retail leasing sector is also seen to grow with the food and beverage industry and upgrading of lifestyles while residential space demand is growing due to investments by high net-worth individuals and young professionals.
On the downside is the growth in e-commerce, delays in infrastructure projects and rising interest rates.
Tan said another driver for the property sector is the anticipated introduction of real estate investment trusts which is seen to attract foreign investors.