THE Philippine Stock Exchange Index (PSEi) closed 2019 at 7,815.26 points, a rather decent but disappointing end to the year for investors. Going forward, the PSEi’s performance in the first quarter of 2020 will determine the market’s performance for the rest of the year.
This was explained by stock broker and Technical Analyst Hernan Sergovia, who said that, “Again, first quarter is very crucial for the rest of the year, as we explained last March 2019. So if we come out very good on the first quarter of 2020, I think that we will find the 2020 market to be fruitful.”
Looking at 2020, Segovia believes that if we can ride the enthusiasm and growth in the United States (US) equities market, which is still ongoing, then the Philippine stock could go higher. Likewise, if the global economy can sustain its growth then new capital may flow from bonds to equities in the first quarter of 2020.
“Going forward, if we mimic the run of the US market, there will be some kind of enthusiasm; there will be some kind of interest in our market,” Segovia explained.
Additionally, there is also the situation with the ever strengthening Philippine peso, which is currently at P50.77 to the dollar. According to Segovia, investor enthusiasm, the movement of capital from bonds to stocks and a strong peso may potentially help lead to a strong first quarter for the PSEi, but he wants to be a little cautious in his predictions for now.
“I’m seeing the peso rate breaking fifties, which is very favourable to the equities market. So from the bond market to the equities market, that’s very favorable, and that all depends on the first quarter result,” Segovia said./PN
