2021 Market Updates

INFO

MANILA, PHILIPPINES

Check out First Metro Investment Corporation's stock picks for 2021

The investment banking arm of the Metrobank Group is “cautiously optimistic” this 2021, as vaccine news and public spending are poised to somewhat bring back the billions of pesos wiped out by the pandemic last year.

First Metro Investment Corporation (FMIC) forecasted that the Philippine Stock Exchange index (PSEi) may end somewhere between 7,800 to 8,100 this year, as vaccine roll outs and the reopening of businesses revive the recession-hit economy.

The PSEi ended 2021 at 7,139, 8.6% lower than the 7,815 closing in 2019.

The index went on a meltdown when the lockdowns were imposed last March 2020, triggering circuit breakers and sent the PSEi to the 4,000 level.

The recovery of Philippine shares will be supported by corporate earnings growth, seen to rise by as much as 29% in 2021. But University of Asia and the Pacific economist Victor Abola cautioned that there will be no full recovery yet for the economy this year.

For instance, Abola said that while some 5.6 million jobs returned since the 8.9 million dip last April, it still meant that some 3.3 million Filipinos remain unemployed.

Abola said that the country’s gross domestic product may rise to 12.5% this year, coming from a contraction of up to -10% in 2020.

This expected economic growth, along with vaccine roll outs, low inflation, market reform initiatives, and the government’s infrastructure push are among the catalysts for Philippine equities.

FMIC head of research Christina Ulang added that these upsides will likely entice foreigners to come back to the Philippines.