Security Bank Corp. of bankero Sanjiv Vohra sees the Philippine Stock Exchange index (PSEi) hitting the 8,000-mark by the end of 2022 as the country continues to recover recover from the impact of the pandemic-induced recession.
Basil John Go, head of equities at Security Bank Trust and Asset Management Group (TAMG), said the highly volatile equities market should continue to recover after closing at 4,700 on March 19, 2020 due to strict COVID-19 quarantine protocols and lockdowns.
“With listed companies being able to adapt to the new normal, this has made them more resilient to lockdowns, allowing both local institutional and retail investors to be more comfortable in increasing investments in the stock market. This is reflected in the continued recovery of the PSEi every time a sell-off occurs,” Go said
Despite the optimism, the TAMG warned of possible scenarios that can affect the bullish outlook on the stock market, such as new deadly COVID-19 variants, higher than normal inflation, a more hawkish Federal Reserve that can lead to higher-than-expected interest rates, an escalation of the Russia-Ukraine conflict, and the possibility of having a challenging election season.
“We are optimistic that for 2022, the equities market will outperform the fixed income market, through cheap valuations, a strong domestic bid, and the return of foreign flows. We are looking at a strong rebound for the equities market and the possibility of double-digit returns,” Go added.
Security Bank TAMG Chief Investment Officer Noel Reyes said that 2022 is a year where investors will gain more solid ground, as more certainty is shown in tapering off COVID-19 as well as the preparedness of corporations to operate in the new normal.
“Now as we enter 2022, we are optimistic that we are beginning to find our solid footing by the large and growing vaccination rate of people that allows for increased mobility and more economic re-opening. Finally, we are recovering from the losses and damages that COVID-19 brought to the local and global economies,” Reyes said.
Despite the optimism, the bank owned by businessman Frederick Dy remains wary of risks and black swans that could disrupt the recovery of the Philippine economy, such as the rising global policy and interest rates, inflation, deadlier COVID-19 variants, the Russia-Ukraine conflict, and the coming national elections.