Happy New Year! I hope you had a grand time last Christmas season and, like many of those I know, are also starting the year with renewed energy and fresh hope.  

In a survey conducted by the Social Weather Stations last December on this subject, results showed that “96% of Filipinos are welcoming 2024 with more hope than fear.” 

You may have come across the said survey. It particularly tried to capture the people’s pulse on how hopeful – or fearful – are they for the coming year.  

Let me be clear, however, that since the survey was about making a comparative analysis on the outlook of people for the New Year from previous years, the study downplayed the result. It said that the 96% figure was not as impressive as it looks. This is because, as the report described it, this is only “a point above the 95% (registered) in 2022 and the highest since the pre-pandemic (findings of) 96% in 2019.” As such, this ratio of Filipinos with positive outlook toward the new year improved only slightly.

But if you look back at what last year was to investors in the market and to ordinary people, this 96% ratio of Filipinos with positive outlook toward 2024 is but simply awesome. 

2023 market performance

The market’s close last year was anti-climactic: while it gave an impression of ending the year with a strong close, the opposite happened. It lost steam just like that and fell lower into negative territory. 

As a result, the bourse’s main index, the Philippine Stock Exchange, Inc. index or PSEi, stopped in its tracks at 6,450.04 on the last trading day of 2023.

On this last trading of trading, the market even suffered a day’s loss of 69.07 points or 1.1%. Consequently, the PSEi ended with a year-to-date (YTD) loss of 116.35 points or 1.77%.

The PSE website also showed that the market churned out a daily average value turnover of P6.09 billion only.  This is comparatively lower by 16.5%  from the P7.30 billion average produced in 2022.  

In the same report, foreign investors had a smaller or reduced business transaction record in 2023 – aside from being net sellers for the year.  

Foreign investors only had a net selling value turnover of P53.67 billion. This was about P14.38 billion, or 21.13% less than their net transactions of P68.05 billion in 2022.

On the other hand, the bourse had a better story line on capital fund raising. The bourse was able to help companies raise a total amount of P140.95 billion from primary and secondary shares offerings in 2023. This was 27.8% higher than the P110.29 billion that was raised in 2022.

Additionally, the above funds were reportedly raised from the following capital-raising activities: 3 initial public offerings (IPOs), 5 follow on offerings (FOO), 5 stock rights offerings, and 11 private placements.

Lastly, even if the bourse was not able to land on the green by the end of the year, it recorded a slight increase in market capitalization equivalent to 1.10% or P16.74 trillion. This may not be much but this can only mean that some of its component stocks enjoyed better market prices. 

Bourse’s programs, market forecasts

Ahead of expectations for better economic conditions such as higher GDP growth, lower inflation, and possible reduction in interest rates, the bourse is said to be expecting about 6 fundraising events in 2024. A total of P175.0 billion (US$4.2 billion) is expected to be raised and about P40.0 billion of which would be in the form of IPOs.

One of the companies lined up to raise capital through an IPO is Citicore Renewable Energy Corporation. It’s reportedly one of the Philippines’ biggest solar power producers in the country. 

The company has already filed its documents with regulators. Initial information shows that Citicore plans to sell up to 3.335 billion shares; this includes a mulled amount for over-allotment option. Tentative offer price is P3.88 per share. The purpose of the exercise is to finance capital expenditures.

To boost trading activity, the bourse will push for regulatory reforms that will promote and encourage wider stock market participation and entice foreign investors back to our market, which are found in the bill filed in Congress by Albay 2^nd District Representative, Joey Sarte Salceda, titled “Capital Markets Efficiency Promotion Act.” Among the provisions is to cut the stock transaction tax to 0.1% from 0.6%, and the dividend tax on non-residents to 10% from 25%.

Lastly, market analysts continue to believe that with an inflation rate of 4.0%, the PSEi will possibly hit the 7300 to 7500 of the PSEi in 2024.  

Market resistance, on one hand, is estimated at the following levels of the PSEi: 6300 (11.7x PE), 6700 (12.4xPE), 7100 (13.1xPE). On the other hand, market resistance is placed at 5900 (10.9xPE), 5700 (10.6xPE), 5200 (9.6%PE).

These estimates, however, will drastically change for the better – or worse – depending on how existing geopolitical tensions across the globe and/or within the region will pan out in 2024. – Rappler.com

The article has been prepared for general circulation for the reading public and must not be construed as an offer, or solicitation of an offer to buy or sell any securities or financial instruments whether referred to herein or otherwise.  Moreover, the public should be aware that the writer or any investing parties mentioned in the column may have a conflict of interest that could affect the objectivity of their reported or mentioned investment activity.   You may reach the writer at densomera@yahoo.com.