First Metro Investment Corporation (FMIC) is predicting the main index of the Philippine Stock Exchange to be up to 8,600 to 8,900 this year. According to the company, this will be triggered by the easing of fiscal policy and regulations this 2020. The firm disclosed its projection for 2020 saying that the equities market is in the best place to grow this year. Also, FMIC told that its price-earnings ratio in 2020 may reach around 16.8x-17.4x. Here are the other parts of the news about FMIC’s prediction.
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Last year was a year of consolidation and FMIC is well-aware of it. Given this fact, the market can either go up or down this 2020. And the company is seeing a couple of arguments, it believes that the market will rise. Based on its enumeration, the growth momentum of corporate earnings will increase to 10% this 2020. There will be a growth differential of 1.7% between the developed and emerging markets. There will also be a bigger space for monetary policy easing in the emerging markets today compared to developed markets. The policy direction is the big swinger here that can take PSEi as far as above 8,000. This is coupled with policy execution and that’s a good thing.
The gross domestic product or the GDP of the country is projected to increase to 6.2 to 6.6% this year. This rating outperforms other countries with the same BBB+ debt rating also given by S&P Global Ratings. FMIC said that the Philippines will remain as one of the best in terms of GDP growth. Some countries like Mexico and Thailand have 1% and below 3% growth respectively. Our economy is only rated as BBB+ and it’s going to rise 6% this 2020. It’s an interesting case for foreigners to visit our country again.
FMIC also shared that the Philippines has a big fiscal policy space that fights against global issues such as Hong Kong protests, US-Iran conflict, Taiwan elections, and Brexit. Because of the ongoing tax reforms, government revenues are high and the debt-to-GDP ratio is well-balanced below 38%. Both the debt burden and expenses can be handled by our company. Whatever the global challenges are, we have a monetary policy and the central bank can cut rates to adjust. Plus, a stronger momentum for the equities market can be projected this year.