After a nerve-wracking year marked by an unprecedented lockdown to contain a coronavirus (COVID-19) pandemic, investors are looking forward to a recovery in …
After a nerve-wracking year marked by an unprecedented lockdown to contain a coronavirus (COVID-19) pandemic, investors are looking forward to a recovery in corporate earnings and stock prices this 2021. The main-share Philippine Stock Exchange index (PSEi) may rebound to 7,878 this year on the back of a 39.7 percent recovery in earnings from last year’s level. The yearend PSEi outlook – a median of forecasts by AP Securities, BDO Unibank, CLSA, BPI Securities, AB Capital Securities, Sun Life of Canada, Papa Securities and First Metro Securities—suggests an average upside of 738.41 points or 10.3 percent from last year’s finish. In 2020, the PSEi declined by 8.6 percent to close at 7,139.71. The index hit a low of 4,623.42 on March 19 when the whole of Luzon was placed under enhanced community quarantine before other key regions followed suit. As of year’s end, however, the index has clawed back 2,516.29 or 54.4 percent from the year’s bottom as investors welcomed the easing of lockdown restrictions and positive news about COVID-19 vaccine development and distribution. Full year 2020 consensus forecasts suggest an average decline in earnings per share (EPS) of about 47 percent. This as the domestic economy fell into its deepest recession in recent history—the first contraction since 1998. Gross domestic product (GDP) last year was expected to have declined by 10 percent. Last year, foreign funds were net sellers to the tune of P128.65 billion, compared to P14.26 billion in foreign outflows seen in 2019. Daily average value turnover slightly improved to P7.35 billion from the P7.
