The local stock barometer rallied past a key barrier at 6,500 on Thursday to close at its highest level since the COVID-19 pandemic hit local shores in March.
Tracking upbeat regional markets, the Philippine Stock Exchange index (PSEi) gained 271.84 points, or 4.35 percent, to close at 6,517.49. Large foreign inflows—a net foreign buying of P1.37 billion—also boosted local equities.
“In the short run, though, the PSEi is just catching up with its peers in the region like Vietnam and Malaysia,” said Ron Acoba, chief investment strategist at trading research provider, Trading Edge Consultancy.
“Positive sentiment, of course, is spilling from the strength in US equity markets, specifically the Nasdaq,” he said. Acoba said a consensus PSEi fundamental target was at 7,024 for the next 12 months.
He said, however, this would be subject to a downgrade after the second quarter corporate earnings reporting season. He said the consensus forecast had only taken into account a 10-percent decline in earnings per share for 2020.
“There’s a lot of overhang at 6,800-7,200 area. It will take a longer consolidation period before the index returns to 2019 levels,” Acoba added.
April Lee-Tan, head of research at online stock brokerage COL Financial, said the recent upswing could be difficult to sustain given the bleak earnings outlook.
“More and more, it looks like a U-shaped economic recovery,” Tan said, projecting that economic output would remain sluggish longer instead of a quick V-shaped recovery. At the local market on Thursday, all counters posted significant gains. The market was led by the financial and holding firm counters, which both surged by over 5 percent.
The services, mining/oil and property counter rose by over 2.7 percent, while the industrial counter added 1.55 percent.
The market has been on a roll for six days straight. At 6,517.49, the closing level was PSEi’s highest since March 6 this year.
Ty family-led GT Capital, the day’s most actively traded company, soared 15.32 percent, while international port operator ICTSI jumped 10.11 percent as more countries began reopening for business.
The Philippines started easing quarantine protocols in the capital this week.
Metrobank advanced by 9.14 percent, while BPI, BDO and JG Summit all rose by over 6 percent.
SM Investments added 5.5 percent, while Ayala Land, Metro Pacific and AGI all rose by over 4 percent.
URC added 3.85 percent, while Jollibee recouped 2.31 percent.