Stock price index seen breaching 10,000 mark

The Philippine Stock Exchange index (PSEi) will likely end the year in uncharted territory beyond 10,000 on the back of a double-digit growth in corporate earnings alongside favorable local and global macroeconomic backdrop, an investment expert from HSBC said.

“Our end-2018 forecast of the PSE index is 10,100, implying 14-percent upside potential from today’s close,” HSBC managing director and head of Asia investment strategy and advisory Cheuk Wan Fan said.

This year, Cheuk Wan sees the PSEi drawing support from an average growth of 11.5 percent in corporate earnings, mainly driven by consumer-related and banking sectors.

For Asian emerging markets, corporate earnings growth this year is projected at 13 percent versus a global growth average of 10 percent.

For HSBC, stock market investors should overcome fear of heights as steady global economic growth and sustainable corporate margins will continue to feed the bulls this year.

“After the strong rally in 2017, many investors worry about high valuations. But in our view, record-high equity index levels are not a good enough reason to stay on the sidelines. With global leading indicators continuing to surprise on the upside and corporate earnings momentum staying positive, we expect the equity bull market to continue in 2018,” said Willem Sels, chief market strategist at HSBC Private Bank.