The stock market had a lackluster performance last week, with the Philippine Stock Exchange index (PSEi) dropping 1.4 percent week-on-week and average daily value turnover falling below P3 billion.
Despite positive developments such as lower inflation in June, declining unemployment and underemployment rates, and a statement from new BSP Governor Eli Remolona hinting at possible policy rate cuts, investors remained focused on the risks.
One such risk is the onset of El Niño, which could negatively impact the agricultural sector and lead to inflationary pressures later in the year.
In addition, there is a 95-percent probability that the US Fed will increase interest rates, causing bond rates to rise and making stocks less appealing to investors.
Furthermore, more companies are considering delisting, shrinking the size of the Philippine equity market. On the other hand, there are few companies going public, reducing its attractiveness to foreign investors.
Despite these short-term risks, there are steps that can be taken to make the market more appealing in the long term.
For instance, attracting and nurturing foreign direct investments can contribute to economic growth and the development of new industries, making the market more attractive to investors.
The government should also address issues in the agriculture sector to reduce reliance on imported food products and tackle inflation on a long-term basis.
In the past, the Philippine stock market was successful, benefiting from tax rate increases and the growth of the business process outsourcing industry. By addressing current challenges and maintaining a growth rate of over 7 percent, the market can regain its appeal.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
Denial of responsibility! Samachar Central is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
