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Bull Market Lifts PSE Index to Top Rank Among Stock Exchanges in Asia

Bull Market Lifts PSE Index to Top Rank Among Stock Exchanges in Asia

Last updated: February 24, 2021 | September 23, 2010 | Luqman Jackson
finance

The Philippine Stock Exchange (PSE) index, or PSEi, has outperformed its peers in the region for the period between this week, data from the PSE showed.

The PSEi ranked first among Asian indices, growing by 33.91 percent year-to-date last September 21 and rising by 32.81 percent year-to-date as of September 22, followed closely by the Indonesian and Thailand markets.

“The growth in the indices for the period has generated wealth for Philippine stock market investors worth close to P1.64 trillion as of year-to-date ending September 21 and P1.62 trillion as of year-to-date ending September 22. We are inspired by these bull market trends as we undertake initiatives to encourage more investors in the stock market,” PSE President and Chief Executive Officer Val Antonio B. Suarez said.

The PSEi closed at 4,067.43 on Thursday, September 23, up 13.25 points or 0.33 percent with value turnover at P5.8 billion and the number of trades at 19,326.

Friday, the index rebounded and closed at 4,078.87.

The PSE is the country's only stock exchange with 250 listed firms and 132 active trading participants. PSE shares are also listed on the stock exchange.

Meanwhile, the Union Bank of the Philippines forecast that the PSEI will rise further to new highs because valuations remain “undemanding.”

The Philippine Stock Exchange Index has rallied 21 percent since June, set for the best third-quarter performance since 1993, as economic growth accelerated in the second quarter and corporate earnings beat expectations. The gauge trades at 15.3 times estimated earnings, compared with a high of 18.5 times in October 2007, and closed at a record Friday. The index lost 0.3 percent to 4,075.03 at 9:56 a.m. today.

“We see the index to continue marching to a new high after high,” Michael Garcia, who runs the nation’s best-performing equities fund at Union Bank, said in a phone interview today. “Valuations remain undemanding and there’s still a lot of upside left.”

The benchmark stock index may trade at 18 times estimated earnings in 12 months, Garcia said. “Share prices will be lifted by rising liquidity, earnings upgrades, and a good economic story.”

Sell recommendations by analysts have slumped to 7.67 percent of total stock ratings this month, the lowest since February 2008, according to data compiled by Bloomberg.

According to Bloomberg, "Philippine stocks are set to extend gains as corporate earnings rise more than expected and analysts “re-rate” valuations, according to Deutsche Bank AG."

“The bull, it seems, is alive and kicking,” analysts Rafael Garchitorena and Carissa Mangubat said in a report dated Sept. 17. “Corporate returns on equity and dividend yields are near all-time-highs, while debt levels remain low.”

The Philippine Stock Exchange Index has risen 32 percent this year, the second-best performer among the 15 biggest Asia Pacific markets. The rally increased the valuations of stocks in the benchmark to 15.1 times estimated earnings from this year’s low of 11.8 in February. The multiple may “overshoot” to 18, as it did in 2007, the analysts said. The index rose 1.3 percent to a record 4,030.67 at 11:46 a.m. local time.

Luqman Jackson | Luqman Jackson is an entrepreneur, blogger and traveler. He teaches copywriting, creative discipline, and ethical marketing. For business owners who want to learn the basics of persuasive writing, she has a weekly column, a podcast, and a copywriting course.

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