Philippines Stock Market Outlook for 2022
Inflection point.
Fresh themes in the market revived dormant spirits resulting to the extraordinary jubilant market in Aug; +9.35% for the month. The e-wallet story, a defining catalyst in the economy, was featured in the jaw-dropping +46% surge in GLO’s share price all on account of the pandemic buzzword: GCash! TEL was not so far behind; PayMaya recently announced it secured a digital banking license from the regulator. Telcos to remain relevant.
The Phil leads regional peers in earnings recovery outlook. This is the latest assessment of Credit Suisse where the Phil is in the company of Korea and Malaysia as having the rosiest projections in 2022. CS has been bearish on the Phils since maybe four years back, but has now turned “Overweight.” Dan Fineman, you’re the man. Entertained yet?
The 2022 elections are here. All presidential elections after EDSA have always produced a window for making money; thats the 12 months prior and after the elections.
Is a reversal unfolding? Climbing out of a pandemic is no easy task especially for a market that has been handicapped the last several years. The market needs themes, stories and even conspiracy theories to feel alive again. The things we mentioned can help but we need more solid stories such as ESG plays (AP, FGEN, MONDE and CNPF). The REITs too have added spice to the market.
We have another date with the ballot next year which will determine where we go in the next six. Fresh themes will outshine the old economy but not totally push them to oblivion. Then a shift to a new normal where the economy can return to its normal growth path. If things fall into place, the PSEi could mount a return to the 8000 area in 2022. Forgive me for sounding like all’s well with PSEi which we think will end this year at 7300. The fact remains the virus is still very much around and the economy is wobbly. I understand everybody’s pinning their hopes on the herd immunity status which will come sometime in 2H 2022. No rush then, instead take your time to build your core positions, anchored on the themes mentioned.