INVESTING on property stocks will be productive in 2015 as the country is expected to post economic growth, according to stock, market analysts recently interviewed by the BusinessMirror. Astro del Castillo, managing director of First Grade Holdings, said investing in property stocks is a good move to start, as the property sector is expected to continue its growth path this year.
With the demand for more office facilities and tourism infrastructure, major developers, such as Ayala Land Inc., Megaworld and SM Prime Holdings Inc., will capitalize on the boom and make the sector rosy. “The outsourcing sector is expected to be a major contributor to the growth of property industry.”
“The business-process outsourcing industry is expected to be much stronger this year, as more outsourcing services will be required by the American economy. As long as the economy of the US continues to rebound, outsourcing services will grow, which will benefit the Philippine economy.
“The opportunities are there and we must take advantage of it,” he pointed out.
Del Castillo said the government must also consider the potentials of a real-estate investment trust law to encourage foreign players to invest in the property sector. “We need to generate more capital to boost investments in the country.”
In another media briefing, online stock brokerage firm COL Financial Philippines chose SM Prime Holdings (SM Prime) as its top pick for the property section in 2015.
“Despite being one of the biggest residential property developers, it is still predominantly a Philippine mall operator [70 percent of operating income, 64 percent of NAV] making it a good proxy for consumer spending.
“Possibility of a share placement no longer a concern as the company already raised P18 billion through the sale of 1.06 billion treasury shares last November,” said April Lyn Tan, vice president and head of research of COL Financial Holdings Inc. in a recent media briefing held in Mandaluyong City.
SM Prime is one of the largest integrated property developers in Southeast Asia that is engaged in the development of malls, residences, offices, hotels and convention centers. It is the largest property developer in terms of asset and income base as of end-2013 in the Philippines. Aside from SM Prime, Tan said Ayala Land Inc. and Megaworld are the other picks for 2015. Tan mentioned that the continuous falling oil prices and the expectations of reforms that will be implemented by the current administration are going to drive the stock market beyond 2015.
“The most important reason the stock market will continue to go up is ample liquidity, both globally and domestically.” The resulting drop in interest rates makes stocks more attractive compared to other liquid investments despite the Philippine Stock Exchange index’s relatively expensive valuation from a historical perspective.
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This year is really the best time to buy properties here in the Philippines. The property market is glowing hot.