The benchmark Philippine Stock Exchange index (PSEi) may be richly valued, having gained 14 percent in the first half of 2017 to end at 7,866.52.
Still, analysts see select buying opportunities that would arise from crucial policy shifts, led by the expected tax reform package to be passed by Congress.
“Flows and tax reform developments will drive the market,” Hermenegildo “Haj” Z. Narvaez, BPI Trade Head of Equity Research, said in an email.
Narvaez noted the strong performance of the PSEi, which gained another 7 percent in the second quarter of 2017.
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This was also due to strong foreign buying and better-than-expected corporate earnings. He said the PSEi was already trading at 19 times expected earnings for 2017.
“We believe stock-picking and rotation remains the way to go,” Narvaez said.
