The stock barometer may close above 8,000 by yearend and remain bullish in the next 12 to 18 months amid prospects of rising interest rates, the chief of PNB Securities said.
For as long as there are no shocks, such as a faster-than-expected pace of increase in interest rates, there was room for the Philippine Stock Exchange index to rise, said PNB Securities president Manuel Lisbona.
“If it (additional US interest rate hike) became 50 basis points, that would push the market significantly lower. Barring any surprises like that, I think the market can still move and maybe close above 8,000 by yearend,” Lisbona said in an interview with Inquirer.
The market was also seen to remain bullish for as long as the US Fed and the other monetary authorities would telegraph their moves, he said.
It was best for traders to enter a good market “right now.” He said the market still seemed to be looking for directions.
Key drivers that would keep the PSEi atop the 7,800 level were local investors’ buying and fund flows from foreign investors due to lack of investment opportunities in other markets, Lisbona said.
The P8-trillion infrastructure spending planned by the Duterte administration would also pave the way for a market gallop, said Lisbona. For one, the administration’s bold infrastructure spending would be accompanied by its good political capital, he noted.
“A one-peso spending will actually have more than a one-peso effect in the general economy. That is one of the big reasons why [foreign] funds are flowing in because I guess they see potential,” Lisbona said.
In terms of valuation, Lisbona’s top stock picks are Alliance Global Inc. (AGI), Manila Water Company Inc. (MWC), and Ayala Corp. (AC).
In terms of price versus liquidation value, he said San Miguel Corp. (SMC) and First Philippine Holdings Corp. (FPH) would be the stocks to watch out for. —ODELINNE JAN LINA