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For years, investors viewed blue chips listed on the Philippine Stock Exchange (PSE) as permanent compounders because of their ability to sustain long-term growth and profitability. Strong earnings and dominant market positions allowed many of these companies to trade at premium valuations for years.
But today, that confidence appears to be fading.
As the PSE Index (PSEI) struggles to stay above the 6,000 level, many of its most established corporations are no longer trading at the premium valuations investors once considered normal. Some even trade below book value despite remaining dominant businesses in their industries.
Ayala Corp. now trades at barely 0.54 times book value after falling more than 25 percent from its 2024 levels. Ayala Land trades below book value after declining more than 41 percent from 2024 levels and nearly 67 percent from its 2018 highs.
