MANILA, Philippines - The Philippine Stock Exchange (PSE) remains positive on the second semester of the year despite the recent bloodbath in the local bourse due to deepening concerns about China’s slowing economy.
“Our own pipeline suggests that we still have a reasonably healthy second half,” PSE president and chief executive officer Hans Sicat said.
Sicat said he wants to see more stability in the market. Global equities have wiped off more than $5 trillion in value since China abruptly devalued the yuan by nearly two percent, sparking fears the world’s number two economy is weakening quickly.
The PSE chief admitted that volatility is a disadvantage in attracting more companies to enter the local market through initial public offerings (IPOs).
Net income of the PSE for the first half declined by 35.7 percent to P366.84 million from P570.26 million in the same period last year due to a drop in listing-related income.
Revenues also went down by more than a fifth while total expenses increased by 8.2 percent.
“Volatility maybe a negative factor in a sense that issuers might be hesitant to pull the trigger. But fundamentals don’t really change in the Philippines except the nervousness in the market,” Sicat said.
Furthermore, PSE expects continuous growth for the Philippine economy in the remaining months of the year strongly driven by government projects such as public-private partnership programs.
“Nothing much has changed from my general fundamental standpoint. When you look at the Philippines, we still seem to have relatively strong fundamentals compared to even some of our peers around the region. Economy will continue to grow,” Sicat said.
Sicat said employment would continue to be solid as the country hits the so-called demographic sweet spot and with oil prices continue to be low.
“The fact that oil is down is probably good for the country since we’re a net oil consumer,” he said.