MANILA, Philippines (CORRECTED) - The Philippine Stock Exchange index (PSEi) surged to a fresh high on Monday morning, still buoyed by the Philippines' second investment grade rating.
As of 12 noon, the PSEi stood at 7,237, up 0.3%. Among the most active during morning trade were SM Investments (up 0.85%) and Puregold (up 2.22%).
Shares of Gokongwei's Universal Robina Corp. and JG Summit also hit record highs in morning trade.
10,000 in 2 years?
With the index's continued surge, COL Financial head of research April Lee Tan said the PSEi could possibly hit 10,000 in two years.
"Last year we already talked about the possibility of hitting 10,000, but we're not saying its going to happen this year... Our view is definitely the factors that will drive the uptrend remain intact and are expected to remain here. When we talked about 10,000 last year, we talked about 3 possible scenarios and the best would be for us to hit 10,000 in 3 and a half years. And it looks like today, it's a possibility we could reach that in two years," she told ANC.
With two investment grade ratings under its belt, Tan said the Philippines can expect more foreign investments.
"Today is the second trading day after the rating upgrade, but you still see strength in the market. We talked to some fund managers and they're saying if 2 ratings agencies give the Philippines a rating upgrade, it's actually more potent. There are some funds, pension funds or big funds who will not consider the Philippines as a legitimate investment grade if there's only 1 ratings agency that gives us investment grade... (Now) we can expect more foreign investors coming here," she said.
For investors who remain on the sidelines, Tan said they should not be afraid to jump in.
"This is going to be a buy-on-dips type of market. Every time the market sells off, don't be afraid. It's time to buy back this market. We don't see any bubbles, it's still okay. Although valuations are expensive, it would be important to remind people that in 1997, we hit 27 time P/E (price-to-earnings ratio). Yes we are expensive at 20 times, but we're not yet at 27 times," she said.
"As far as analysts are concerned, we have looked at the numbers and earnings are quite strong so far, strongest we've seen and there's a lot of room to upgrade."