Valuation Metrics, Market Efficiency, and Investor Sentiment: A Descriptive Analysis of Philippine Stock Exchange–Listed Firms
DOI:
https://doi.org/10.65166/6kbeat87Keywords:
Philippine Stock Exchange, valuation ratios, market efficiency, fundamentals, liquidity, behavioral finance, emerging marketsAbstract
This study provides a comprehensive descriptive analysis of valuation, fundamental, liquidity, and risk indicators among Philippine Stock Exchange (PSE)–listed firms to assess the market’s current efficiency and investment climate. Drawing on publicly available data from the PSE Stock Screener (2025), twelve key metrics—including price-to-earnings (P/E), price-to-sales (P/S), price-to-book (P/B), price-to-cash-flow (P/CF), EBITDA growth, earnings yield, dividend yield, cash-to-debt ratio, and five-year Beta—were examined and ranked across sectors. Results reveal pervasive undervaluation across the market: low P/E, P/S, and P/B multiples persist despite improving profitability and liquidity, indicating that share prices do not fully reflect firms’ earning capacity. Conglomerates such as Lopez Holdings, San Miguel Corporation, and Petron demonstrate solid fundamentals and strong cash generation, yet remain deeply discounted—a signal of semi-strong market inefficiency where information is available but slowly assimilated. Corporate balance sheets exhibit post-pandemic conservatism, characterized by high cash reserves and minimal leverage, while systematic risk remains concentrated in consumer, energy, and telecommunications sectors. Revenue-growth analysis suggests that some extreme gains arise from base-effect distortions rather than sustainable expansion. At the macro level, the upward shift in the Philippine Treasury yield curve and the market’s −7.3 percent YTD decline (second weakest in Asia) underscore how elevated policy rates have redirected liquidity toward fixed-income assets. The study concludes that the Philippine equity market remains fundamentally resilient yet sentiment-impaired—a paradox of strength overshadowed by caution. It recommends improving monetary transparency, enhancing disclosure standards, and broadening institutional participation. Methodologically, it contributes a replicable, metric-based template for evaluating market efficiency in emerging economies and highlights the need for future studies to focus on actively traded, high-liquidity (“Class A”) stocks to avoid distortions from inactive listings.
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