Continued reforms to boost PSEi

MANILA, Philippines–The Philippine Stock Exchange index (PSEi) can indeed achieve new highs, mainly through the strength of domestic investors, as long as reforms continue and that a smooth political transition takes place in 2016.

That sentiment was given by officials of the local bourse who shared their thoughts following aggressive targets by President Aquino, who visited the exchange’s Makati City trading floor to celebrate the recent rise of the PSEi above the 8,000 level. Aquino, in his speech, said that he hoped to again make an appearance two more times within his term, or when the index breaches the 9,000 and then 10,000 levels.

“9,000 by yearend is attainable but we have to work doubly hard and hope no external forces will affect it,” Jose T. Pardo, chair of the PSE, said in an interview. “The outlook is still good, there’s a confluence of [good] events.”

He added that a more conservative target was still around 8,500 for 2015. That suggests continued growth for the PSEi, which has been hit by a wave of profit-taking since President Aquino’s visit.

Pardo said domestic investors, who account for about 53 percent of volumes, have the ability and means to push the PSEi higher.

“Business in this country is driven by confidence and for as long as there is confidence in the system, in the political leadership, Filipinos will invest,” Pardo said.

Alejandro Yu, a PSE director and president of stockbrokerage firm R.S. Lim & Co. Inc., agreed that sentiments over the country’s fundamentals were optimistic.

“With the given momentum, we should be okay. As long as there are smooth elections and a smooth transition to carry on reforms,” Yu said.

Aquino, during his visit at the PSE, touted the milestones the exchange has breached since his term began in 2010.

“In almost five years, we have seen the PSE index go from record high to record high,” Aquino said.

He noted that the most recent all-time high was recorded just last Friday, when the index closed at 8,127.48 points, or more than double the index’s value from five years ago.

“In all seriousness, I am certain that no one can dispute the good news, that is the doubling of the PSE index, which stands as a sound reminder of the optimism that continues to surround the Philippines,” Aquino said.

“I have been bullish on the Philippines long before we regained our prominence in the global economy, long before we achieved investment grade and long before the all-time highs the PSE index has recorded. The source of my confidence is the Filipino people,” he added.