Philippine growth to drive stock market — PSE

Philippine economic growth that is expected to top the region would likely drive local shares to new heights this year, according to the local bourse operator.

“The expected improvement in macroeconomic indicators is poised to drive market conditions in 2024,” Philippine Stock Exchange, Inc. (PSE) President and Chief Executive Officer Ramon S. Monzon said in a statement on Monday.

The Philippines is projected to lead the Southeast Asian region with the highest gross domestic product (GDP) growth in 2024 at 6.2% compared with Vietnam’s 6%, Indonesia’s 5%, Malaysia’s 4.6%, Thailand’s 3.3%, and Singapore 2.5%, he said, citing outlook from the Asian Development Bank.

He also cited inflation that is expected to slow this year.

Philippines inflation is projected to ease to about 4% from an average of 6.9% as of end-November. The US Federal Reserve and Bangko Sentral ng Pilipinas (BSP) are expected to cut rates, now at 5.25%-5.5% and 6.5%, respectively, Mr. Monzon said.

The PSE index (PSEi) could range from 6,800 to 8,300 in 2024, he said, citing analyst projections. The main index closed at 6,450.04 last year, down by 1.8% or 116.35 points from 2022.

“The expected rate cuts by the US Fed and BSP, as well as Philippine government’s aggressive spending on infrastructure projects and the continued increase in foreign investment pledges are expected to stimulate consumption, generate job opportunities and encourage additional investments,” Mr. Monzon said.

Risks to the outlook include the potential impact of higher transport costs, electricity rates and international oil prices, he added. 

Mr. Monzon said he expects six initial public offerings (IPO) this year, including the PHP 12.9-billion maiden share sale of Saavedra-led Citicore Renewable Energy Corp.

He also expects IPOs by real estate investment trusts, while PHP 175 billion worth of capital is expected to be raised this year. 

“Our capital-raising forecast is PHP 175 billion, around PHP 40 billion of which will come from IPOs,” Mr. Monzon said. 

In 2023, the PSE raised PHP 140.95 billion worth of capital from primary and secondary shares, 27.8%  higher than a year earlier.

The PSE also had three IPOs, five follow-on offerings, five stock rights offerings, and 11 private placements. 

Meanwhile, Mr. Monzon said the PSE would continue to push regulatory reforms such as the implementation of the proposed Capital Markets Efficiency Promotion Act, which seeks to reduce the stock transaction tax to 0.1% from 0.6% and lower the dividend tax on nonresident aliens to 10% from 25%. 

He added that the PSE is pushing to increase the number of listed companies and engage investors via various marketing campaigns and assistance programs. 

“The PSE will continue to introduce new products and push new laws and regulatory reforms that will promote and encourage wider stock market participation and entice foreign investors back to our market,” Mr. Monzon said.

“We will likewise continue to pursue our various initiatives to help and attract companies to list their shares on the exchange,” he added. — Revin Mikhael D. Ochave