While it is currently consolidating, the country’s stock barometer could retest the 8,000-mark within this year and possibly reach 10,000 within the term of President Duterte, veteran stock broker Harry Liu said.
Liu, president of Tektite-based stock brokerage Summit Securities, said once the local corporate earnings season shows positive results, the big-ticket infrastructure projects of the government take off and the US starts to stabilize even with some of US president Donald Trump’s controversial policies in place, the Philippine Stock Exchange index (PSEi) would be able to rise from its current 7,200 to 7,600 levels.
The Duterte administration making good on its promises would be a pivotal development in all these, Liu said. “At least he’s not corrupt. He’s challenging himself.”
Mr. Duterte promised to usher in a “golden age of infrastructure” by raising infrastructure spending to 5-7 percent of gross domestic product. The government also seeks to reform the tax system.
Liu said the government would have to make sure there’s money to compensate for the looming personal income tax cuts.
In the medium-term, which would last until the Lenten holidays, Liu said the market would remain in the consolidation phase. He said the PSEi would have to break 7,600 to reach 8,000.
Liu is confident that the political noise arising from concerns over the extrajudicial killings would likely be outweighed by positive developments.
He said even the mining shakeup that resulted in the closure of 23 mining projects, which he described a “house cleaning,” would eventually be good for the country. —DORIS DUMLAO-ABADILLA