PSEi to rebound to 7,600, says First Metro Sec

Despite its current weakness, the local bourse may reach the 7,600 level this year on the back of an anticipated improvement in domestic consumption and policy support, particularly the proposed reduction in stock transaction taxes.

Reuben Mark Angeles, first vice president and equity research division head at First Metro Securities Brokerage Corp., said in a statement on Tuesday that the Philippine Stock Exchange Index (PSEi) was “positioned for a turnaround.”

“With inflation easing, economic data improving and monetary policy becoming more accommodative, the business cycle is shifting from a slowdown to early recovery,” Angeles added.

The benchmark PSEi recently fell into the bear territory as investors absorbed recent disappointing economic data, including below-target economic growth in 2024.

As of Tuesday, the PSEi has fallen by at least 21 percent from its recent high of 7,554 in October, or before the US presidential elections.

Still, First Metro expects the index to reach 7,600, with a broader target range of 6,600 to 8,600, due mainly to the proposed reduction in stock transaction taxes that could help improve market liquidity.

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The Philippine Stock Exchange Inc. is currently pushing Congress to cut the stock transaction tax to 0.1 percent from 0.6 percent under the proposed Capital Markets Efficiency Promotion Act. This has yet to move forward.

At the same time, First Metro noted increased domestic consumption ahead of the midterm elections in May, citing the country’s “domestically driven economy” that could shield it from global uncertainties.

Ser Percival Peña-Reyes, director of Ateneo Center for Economic Research and Development, pointed out, however, that spending should “have a lasting impact, creating jobs and strengthening industries rather than fueling temporary consumption.”