2024: A Year for Stock Market Optimism

As 2024 approaches, investors are being encouraged to shift their focus back to the stock market, anticipating a more favorable investment climate. Maybank Securities Philippines is advising investors to start building their portfolios with blue-chip stocks, predicting a shift in market sentiment towards a more risk-on approach in the first quarter of 2024​​.

Rachelleen Rodriguez, Maybank Securities’ head of equity research, foresees a significant opportunity, with their 2024 index target set at 7,600, suggesting a potential upside of over 20%. This optimism is driven by expected earnings increases of 9.1% year-on-year, particularly from conglomerates, banks, and property sectors​​​​.

Conglomerates are highlighted as especially attractive investment options due to their diverse interests across banking, retail, and property. The property sector, in particular, is projected to experience significant growth in revenues and net income, estimated at 16% and 18% respectively. SM Prime Holdings is singled out as a top pick in this sector, expected to lead growth through its mall segment​​​​.

Maybank also provides insights into consumer firms and banks, noting a neutral outlook for these sectors in 2023. They emphasize a preference for banks with strong pricing power and a robust consumer lending outlook. BDO and BPI (Bank of the Philippine Islands) are among their top picks​​.

The broader economic outlook for the Philippines in 2024 is also positive, with a projected growth rate of 6.5%, the fastest among ASEAN-6 markets (Malaysia, Singapore, Thailand, Indonesia, Vietnam, and the Philippines). This growth is expected to stem from increased domestic demand and a relaxation of monetary policy by the Bangko Sentral ng Pilipinas in the latter half of 2024​​.

However, concerns remain regarding inflation, which, despite a recent downtrend, could remain elevated in 2024. Factors such as the El Niño phenomenon and export bans on rice and other food items are expected to contribute to higher food prices, along with potential increases in transportation costs and crude oil prices due to ongoing conflicts in the Middle East​​​​.