MANILA, Philippines - First Metro Asset Management Inc (FAMI) downgraded its year-end target for the Philippine Stock Exchange index (PSEi) to 6,800 from 7,200.
In an interview on ANC, FAMI president Gus Cosio said the uncertainty regarding Federal Reserve tapering and the on-going Syrian conflict forced them to lower their expected target for the PSEi.
"We think that, at least from a foreign investor standpoint, they are re-evaluating their views. They are bit more defensive, less aggressive so it's just natural for us to downgrade because we don't see that enthusiasm going back that soon. It's really a matter of timeline. We've extended the timeline. We're not saying that we're not going to reach 7,200. I'm just saying that it's not going to be in the end of the year," Cosio said.
Despite PSEi starting the week in the green, Cosio expects choppy trade this month. He predicted that heightening oil prices due to unrest in the Middle East will also have a dampening effect on the current growth.
"It would have a dampening effect on growth particularly because you'll be spending a lot more of your budget in transport expenses rather than other things. So I think that's the most significant effect of the Syrian conflict. Personally, if that continues, to have that on top of their heads, people are gonna stay defensive. When people are defensive, they keep cash," Cosio said.
As of 12 noon, the PSEi was up 0.22% to 5,987.74.