From Worst To Best: Philippine Stocks, The World's Best Performer Now

Photo from Bloomberg

Having been the worst year of Philippine Stock Exchange in a decade last 2018, PSE seems determined to soar high as it goes up with a roaring start during the start of 2019 with the Southeast Asian nation’s benchmark equities index beating all the country's global peers.


As the inflation that was a major scourge that was the culprit why the market sank low in 2018 cooled down, the PSEi climbed 1.1 percent to 7761.11 this Friday. Making the PSEi climb for a straight three sessions.  It became the second best-performer among all the global equities indices that are being tracked by Bloomberg. This pushes its gain this year to about 4 percent. According to the government, the inflation slowed down to 5.1 percent in December, which is the lowest stat since May.

“The significant slowdown in inflation confirms the outlook that the central bank will not raise interest rates in the first half and strengthens expectations of a cut in reserve requirement," said Rachelle Cruz, an analyst at AP Securities Inc. “Considering that the macro concerns that plagued 2018 have moderated, market sentiments should improve from here on."


2013 is the worst year of the Philippine Stock Exchange Index since 2008 as it sinks 13 percent because of inflation. But the colling of inflation that is combined with the spillover effect of the campaign spending for the May elections should be able to extend the rebound for consumer stocks. It is said that the PSEi for the last quarter of 2018 is "better than expected."

“Given the prospects of falling inflation, still favorable P/E valuations one can still go on accumulation mode," Ravelas said. “But one must be nimble to adjust to adverse external factors particularly if there is a massive selloff in Wall Street to which there’s very little this market can do."

Source: bloomberg.com