Unicapital Group proudly hosted its first-ever media engagement event, “Outlook 2024: Picking Up Steam,” on August 28, 2024, held at Chef Jessie – Rockwell Club, Makati, signaling a new chapter in its relationship with the national business media. The event served as a platform to introduce Unicapital’s leadership and share expert insights on the Philippines’ capital markets and economic prospects for 2024.
The event was led by key executives from Unicapital, beginning with Mr. Ben Thomas Pañares, President and CEO of Unicapital Securities, Inc. (USI), who delivered the welcome remarks. Mr. Jaime Martirez, President and CEO of Unicapital Group, followed with a comprehensive presentation on the company’s history and its competitive advantage. Ms. Michelle Ungco, Senior Vice President of Corporate Planning and Marketing, introduced the group’s leadership team, while Ms. Wendy Estacio-Cruz, Head of Research, provided an overview of the Philippine equity markets, alongside an analysis of the property sector.
Key Insights from the Event
Updated Stock Market Outlook
During the briefing, Unicapital Securities updated its year-end forecast for the Philippine Stock Exchange (PSE) index to 7,000, down from an earlier projection of 7,200.
“The equity capital markets have always been highly dependent on ever-changing local and global market and economic conditions. Our house view’s findings for the market all point to a gradual, but eventual recovery back to pre-pandemic level,” Unicapital Securities president and CEO Ben Thomas Panares remarked.
Wendy Estacio-Cruz, Unicapital Head of Research, explained that the adjustment reflects a more cautious approach due to the anticipated gradual pace of interest rate cuts by the Bangko Sentral ng Pilipinas (BSP).
“We were expecting up to 75 basis points rate cut for the year. We had the first 25 bps this month. So, we’re expecting more probably in October or December. Hence, the decline in our index target,” Cruz said.
Despite the revision, the earnings per share (EPS) growth for the year is projected at 11%, signaling potential stock price gains.
Optimism in Market Recovery
Jaime Martirez, Unicapital Group President and CEO, expressed optimism about the market’s gradual recovery to pre-pandemic levels, driven by lower interest rates and easing inflation.
“It’s starting to pick up as I see it. When you see interest rates right now, there’s a gradual shift right now to equities. I’m not saying that it has normalized but somehow, when we’re seeing further reduction in interest rates by the BSP, then we should see more interest right now. More momentum going towards the equities market,” Martirez said.
Property and Real Estate Sector Growth
The property sector is also set to benefit from lower mortgage rates, which are expected to boost demand for residential properties by early 2025. Unicapital’s analysis indicates that real estate outside Metro Manila is experiencing rising demand, leading to faster price increases compared to properties within the metro. Residential sales are projected to grow by 9% in 2025, with leasing businesses expanding due to a 70% rise in demand from Business Process Outsourcing (BPO) companies.
Economic Growth Projections
For 2024, Unicapital forecasts Philippine economic growth at 5.8% to 6%, slightly below the government’s target of 6% to 7%. This growth is anticipated to be driven by increased consumer spending and infrastructure investments. Despite potential challenges from geopolitical tensions and sustained high interest rates, the Philippine economy grew 6.3% in the second quarter of 2024, supported by a construction boom.
Stock Market Picks for Investors
Unicapital Securities has identified several key stock picks for investors. Top recommendations include SM Prime Holdings with a target stock price at P43 per share, AREIT Inc. at P43.20 per share, and Metropolitan Bank & Trust Co. at P81 per share, SM Prime, currently trading at a 45% discount to its net asset value, is noted for its high return on equity. AREIT is highlighted for its 1-year forward yield of 6.2% and significant total return potential. Metrobank is favored for its high dividend yield and strong earnings growth.
Looking Forward
Unicapital remains bullish on the equity market and anticipates more initial public offerings (IPOs) as interest rates decline.
“When interest rates start to stabilize, there will be more IPOs to come, and there will be a gradual shift to the equities market,” Martirez said.
The recent reduction in the BSP’s target reverse repurchase rate and the anticipated further cuts are seen as positive indicators for market activity.
Building Investor Confidence Through Timely Market Insights
This media event followed Unicapital’s successful online market briefing, Recalibrating Outlooks amid Evolving Economic Trends, held on August 20, 2024, in partnership with ATRAM. During the briefing, investors gained valuable insights into navigating the shifting market landscape, with strategies to adapt to economic changes. During the media event, these ideas were carried forward, reinforcing Unicapital’s dedication to helping investors stay informed and ahead of the curve in today’s dynamic financial landscape. It highlighted how the company continues to offer meaningful, real-world perspectives to support smart investment decisions.
About Unicapital Group
Unicapital Group is a leading independent financial services provider in the Philippines, offering comprehensive investment banking, securities trading, and financial advisory services. With a commitment to delivering expert insights and innovative solutions, Unicapital is poised to support its clients’ evolving needs in a dynamic economic landscape.
For more information about Unicapital, Inc., please visit www.unicapital.com.ph.
