COL Financial Group, Inc. projects the Philippine Stock Exchange index (PSEi) could reach 7,500 by year-end if the market’s price-to-earnings ratio expands to roughly 12 times from about nine times currently, signaling stronger investor confidence.
The brokerage’s chief technical analyst said the P/E expansion would first lift the index to around 6,600, roughly 3% above current levels, before advancing toward the 7,500–7,600 range.
Technical models indicate the PSEi must break above the 6,570–6,700 resistance zone before testing broader resistance between 7,460 and 7,560 points.
The analyst assigned a 25% probability to this scenario materializing by year-end.
The brokerage’s chief equity strategist said the firm remains constructive on the Philippine market despite geopolitical uncertainty, with oil prices seen as a greater market driver than geopolitical events.
She noted that oil prices have eased from recent peaks, which could support economic conditions and eventually aid equity recovery.
Local fuel prices are set to rise, with gasoline increasing by as much as P3.65 per liter, diesel by P10.68, and kerosene by P11.77, pushing pump prices in the capital region to as high as P99.75, P101.43, and P137.27 per liter respectively.
The strategist emphasized that earnings remain the key determinant, warning that higher oil prices threaten inflation, a weaker peso, rising rates, and lower profits.
Conversely, lower oil prices could support easing inflation, a stronger currency, reduced rate pressure, and improved corporate profitability.
Improving business indicators show companies have grown less pessimistic as inflation eases, reflected in stronger manufacturing activity and hiring intentions.
The strategist cited the planned GCash initial public offering as a potential market catalyst, noting it would introduce a large-cap, fast-growing local technology stock.
The listing of Mynt, GCash’s operator, could raise up to P92.3 billion and surpass the country’s previous largest IPO record set in 2021.
Mynt is backed by Globe Telecom, Ayala Corp., and Ant International, operating GCash through G-Xchange and lending via Fuse Financing.
The strategist acknowledged risks from geopolitical tension, global volatility, and monetary policy shifts by the US Federal Reserve and the Philippine central bank.
COL Financial recommended a blend of cyclical and defensive stocks while advising investors to retain cash as a buffer against market uncertainty.
