The Market Monitor Minding the Nation's Business
By Riza Lozada
The stock index is expected to hit the 8,000-point mark anew this year amid the continued upbeat sentiment in the local market and in spite of the overall gloom abroad.
Analysts predict the PSEi to range between 7,500 and 8,000 level in 2016, as they do not anticipate China to further devalue its currency in August and oil prices to recover from their recent lows.
Brokerage 2Trade Asia.com said the prevailing sentiment among global equities remains bearish on concerns over stalling growth in China and a persisting supply glut in the oil market.
“It’s been a weird 2015…this last quarter, even the third quarter… China did its surprise devaluation, and then there were fears of another rate increase by end-August, beginning September,” Philippine Stock Exchange (PSE) President Hans Sicat said.
“Everybody just flew out of the emerging markets. Net foreign selling increased more than expected. Locals are probably a little bit more cautious about getting into new transactions,” Sicat added.
The Philippine Stock Exchange index (PSEi) closed the last trading day of year 2015 below the 7,000 level amid the volatility of equities markets worldwide, caused mainly by the Federal Reserve’s interest-rate hike.
The bellwether index declined 31.53 points to 6,952.08 on Dec. 29. It ended last year at 7,230.57.
The amount of capital raised at the PSE rose 20.9 percent in 2015 to P184.60 billion from P153.08 billion in 2014.
The fund-raising activities ranged from Initial Public Offerings (IPO), follow-on offerings, and private placements. The total amount raised in 2015 was the second highest in the history of the PSE.
In 2015, four companies were added to the roster of listed firms of the PSE. These were Crown Asia Chemicals Corp., SBS Philippines Corp., Metro Retail Stores Group, Inc., and Italpinas Development Corp.
“We expect that the stock market will continue to be a preferred venue for fund-raising activities of both listed companies and privately owned firms that are considering listing at the Exchange,” Sicat said.
The market’s average daily turnover was also slightly higher, up by 1.8 percent to P8.96 billion in 2015 from P8.80 billion in 2014.
For 2016, the PSE hopes to see continued capital-raising activities and product offerings. The Exchange is also working on its request for exemptive relief to acquire additional shares in the Philippine Dealing System Holdings Corp. (PDS) to be granted by the Securities and Exchange Commission.
The PSE will continue its corporate governance initiatives, including the PSE Bell Awards. It has started working with the PPP Center to find ways for the stock market to be a venue to raise capital for PPP projects. The PSE will also continue to conduct its various market education and financial-literacy programs.
“We look at 2016 with optimism and we hope market indicators will improve next year. We expect that the country’s solid macro-economic fundamentals will continue to drive stock market growth, aided by election-related and infrastructure spending,” Sicat added.