The main-share Philippine Stock Exchange index may rebound to 7,878 this year on the back of a 39.7 percent recovery in earnings from last year’s level.
Full year 2020 consensus forecasts suggest an average decline in earnings per share of about 47 percent. This as the domestic economy fell into its deepest recession in recent history—the first contraction since 1998. Gross domestic product last year was expected to have declined by 10 percent. Ravelas said he expected the conglomerates and property sectors to lead the stock market recovery. However, he noted that risks to this benign outlook would be uneven recovery and weakening economic indicators.
“On a sectoral basis, we prefer consumer, holdings and banks. At this point, we remain stock selective and focus on cyclical names that will ride reopening of the economy,” she added. “The main index may have failed to return to pre-pandemic levels but it’s good to see that it managed to stay above the 7,100 level,” he said.
“We had the listing of the first real estate investment trust after more than a decade-long wait. Even with the pandemic, we had a decent capital-raising pipeline, including the listing of the biggest IPO ever in the history of PSE. Our trading system was up 100 percent during the enhanced community quarantine period when we had to close the trading floor,” Monzon said.