COL Financial Group Inc., the country’s largest retail stock brokerage, is maintaining its year-end benchmark stock index target of 7,500, betting that cooling crude prices and potential capital market catalysts will outweigh risks stemming from escalated tensions between the United States (US) and Iran.

The brokerage’s year-end target for the Philippine Stock Exchange Index (PSEi) implies an expectation that valuations will expand to 12 times earnings per share—matching 2024 levels—from the current price-to-earnings ratio of nine times.

Juanis Barredo, COL chief technical analyst, noted that the index is positioned to return to its pre-conflict level of 6,600, which sits roughly three percent above current trading levels, though he assigned a 25 percent probability to the index reaching the 7,500 mark before the end of the year.

April Lynn Tan, COL chief equity strategist, said the firm’s constructive outlook hinges primarily on energy price dynamics rather than the duration of the military conflict itself.

While international oil prices experienced a resurgence following the geopolitical escalation, benchmark levels remain significantly below previous peaks, relieving pressure on the import-dependent Philippine economy. The Means of Platts benchmark stood 44 percent above pre-war levels two weeks ago, compared with a peak surge of 160 percent recorded at the height of market volatility.

Lower oil prices cushion the domestic economy from severe inflationary headwinds, according to Tan. High energy costs typically trigger rising interest rates, weaken the peso, and depress both consumer and business spending. Meanwhile, moderating oil costs support stronger profit growth across listed equities. Historical data from prior international conflicts, including the Gulf War, the Iraq War, and Russia’s invasion of Ukraine, demonstrate that equity markets frequently advance while military actions continue, provided energy prices settle below their highs.

In addition to energy market trends, COL highlighted the prospective initial public offering of financial technology platform GCash as a major structural catalyst for the Manila bourse. A successful listing would provide the local market with a large-cap, high-growth technology equity, addressing a key sector deficiency that has historically limited foreign institutional participation.

COL expects a successful debut by GCash to encourage follow-on listings from fintech peers, such as Maya, potentially lifting total turnover and foreign capital inflows.

To sustain an upward trajectory toward 7,500, the PSEi must first break through initial technical resistance between 6,570 and 6,700 points before challenging major resistance in the 7,460 to 7,560 band.

Macroeconomic indicators support a gradual recovery, with the central bank’s Business Expectations Survey showing corporate sentiment rebounding in April after a contraction in March, driven by expectations of expanding business activity and renewed hiring plans.