AS FOREIGNERS continue to exit the market, local investors are expected to be the drivers of growth in the local bourse.

“Key feature is all the foreigners are out,” First Metro Investment Corp. (FMIC) Head of Research Cristina S. Ulang said during FMIC’s midyear economic briefing.

“This market is in our house. We are all in and it is our consensus view that’s going to propel this market higher and there are a lot of catalysts,” she added.

Catalysts also include valuation and corporate earnings growth, which FMIC expects to increase by 25% this year and 34% in 2022.

The upcoming elections may also affect the index’s performance as the country’s GDP (gross domestic product) may benefit from election spending.

“It’s a big incentive for seizing opportunities every time the market dips to be in very good companies — to position in very good companies — because the Philippine Stock Exchange Index (PSEi) we expect is going to be on an upward trajectory,” Ms. Ulang said.

FMIC reported foreign ownership at the 30-member index hit a nine-year low of 21%. While local and new investors remain interested in the bourse, foreign investors are still expected to return to the market.

“It’s just that there are so many uncertainties, but the fundamentals are there. The fundamentals are strong and they are intact and this is what’s keeping this market resilient,” Ms. Ulang said.

Ms. Ulang said the PSEi may trade between 7,400 to 7,800 this year.

Risks to market growth include the health crisis getting worse, high inflation and interest rates, prolonged recession, and credit rating downgrades. — Keren Concepcion G. Valmonte