First Metro Investment Corp. (FMIC), the investment banking arm of the Metrobank Group, expects the Philippine Stock Exchange index (PSEi) to reach 7,500 to 7,700 points this year on the back of the country's strong macroeconomic fundamentals.
FMIC Head of Research and Assistant Vice President Cristina Ulang said the PSEi was currently a "bit better" than its peers in Asia.
"The market sentiment has to catch up with the fundamentals We continue to believe, we strongly believe that fundamentals are going to propel PSEi valuation back to 17 times with earnings growth of 8 percent (in 2017)," she said in a press briefing.
Ulang added the country's gross domestic product (GDP) was projected to outperform its ASEAN peers depending on the ability of the Duterte administration to deliver the infrastructure projects.
The FMIC expected the Philippine economy, as measured by its Gross Domestic Product (GDP) accelerating by 7 to 7.5 percent, and infrastructure spending increasing to 5 to 5.5 percent of the GDP this year.
The National Economic and Development Authority (NEDA) Board has so far approved 17 projects worth Php392.9 billion during the Duterte administration's first six months.
Meanwhile, Ulang identified preferred sectors as holding companies/conglomerates, consumer/retail, banking, property and power.
The PSEi ended 2016 at 6,840.64 points.
Source: Philippines News Agency