The Philippine Stock Exchange Index (PSEi) is seen to reach 8100royal,000 level next year as projected cuts on interest rates might spark a buying spree in the local market, according to Unicapital Securities Inc.

Wendy Estacio-Cruz, Unicapital head of research, told the Inquirer on Tuesday they were anticipating a reduction of 25 basis points (bps) in the Bangko Sentral ng Pilipinas’ (BSP) key policy rate before the year ends as well as another 50 bps next year.

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The BSP’s benchmark rate stands at 6 percent after the Monetary Board slashed it by a quarter percentage point in its October meeting, and suggested that another 25-bp cut in December was a possibility amid softening inflation.

The rate of change in prices of goods that an average Filipino household usually purchases hit a four-year low of 1.9 percent year-on-year in September.

For the full year, the BSP’s goal is to shepherd inflation within the range of 2 percent to 4 percent this year.

While Unicapital is bullish on its market outlook, Estacio-Cruz warned that returning US President Donald Trump’s protectionist policy could put a strain on American companies that outsource work processes from offshore service providers and, instead, keep their business stateside.

Estacio-Cruz, said that, as a result, this might affect the property sector, especially players that host business process outsourcing firms.

Nevertheless, she expressed optimism with regard to the logistics, construction, consumer goods and banking sectors amid the economic recovery.

For 2025, the brokerage firm expects that companies involved in renewable energy will dominate the initial public offering (IPO) market amid the increasing interest from foreign investors.

Two of the three IPOs launched this year were by clean energy-focused companies, including the Edgar Saavedra-led Citicore Renewable Energy Corp. on the main board of the Philippine Stock Exchange, and Dexter Tiu-led NexGen Energy Corp. on the small, medium and emerging board.

In 2023, Alternergy Holdings Corp. and Repower Energy Development Corp. both listed on the main board.

For this year, Unicapital forecasts PSEi to end at 7,000. This indicates an increase of 8.53 percent from 6,450.04 at the end of 2023.

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The Philippine Stock Exchange expects to see up to P40 billion raised from at least six IPOs this year.100royal

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