MANILA, Philippines – Maybank Kim Eng has kept a “positive” outlook on the local bourse despite a five-percent decline since the last week of September.
“(We) retain positive outlook despite recent bearish turn that has given rise to volatility and five percent decline in PSEi (Philippine Stock Exchange index) since late September,” Luz Lorenzo, economist at Maybank Kim Eng, said in a research note.
Sentiment in the local market has been greatly affected by concerns over a slowing global economy.
The PSEi closed at 7,355.29 last Sept. 24, its highest level this year. The index finished 7,057.53 yesterday, up 0.78 percent or 54.31 points from Friday’s closing.
“However, the impact of these forces differs in different economies,” Lorenzo said.
The Philippine economy grew by 6.4 percent in the second quarter, faster than the 5.6 percent recorded in the first three months of the year.
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First-half economic expansion settled at six percent, below the government’s target of a 6.5 percent to 7.5 percent growth.
“With first half GDP (gross domestic product) growth at six percent, the consensus… is second half will be better. We concur as recent issues holding back growth in first half are being resolved,” Lorenzo said.
She cited inflation decelerating to 4.4 percent in September from 4.9 percent in the previous two months amid a decline in the price of oil and basic food commodities.
At the same time, Lorenzo said the easing of the port congestion in Metro Manila is seen having a favorable impact on inflation and trade, while the the rollout of more big-ticket infrastructure projects is expected to accelerate public spending.
“The Philippines’ edge given the present global situation is that growth is demand-driven, its banking system is healthy, the population of 100 million is young, overall leverage is low among households and corporates while debt ratios of the government are declining, and last but not least, there is fiscal and monetary space for accelerating growth,” Lorenzo said.
“Thus we remain optimistic on corporate performance as a result,” she said.
