Unicapital sees up to 5 IPOs this year

INDEPENDENT investment house Unicapital Group said the Philippine Stock Exchange (PSE) could see three to five initial public offerings (IPO) this year on the back of expected economic growth.

“Some of them are actually optimistic despite the current market condition. But they don’t push through with the IPOs yet. (I see) roughly three to five IPOs on the conservative side (this year),” Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz said during a media briefing in Makati City on Thursday. Unicapital Securities is the brokerage arm of the Unicapital Group.

The PSE previously said it was targeting six IPOs this year. The local bourse saw three public listings in 2024.

Ms. Estacio-Cruz said the benchmark PSE index (PSEi) is forecasted to reach 7,800 this year driven by improving macroeconomic conditions.

The PSEi ended 2024 in negative territory as it fell by 0.15% or 10.23 points to 6,528.79. The main index’s close in 2024 was higher by 1.2% or 78.75 points from its 6,450.04 finish in 2023, marking the first time that it closed higher since 2019.

“We are setting it at 7,800. This is actually a slight decline from our 8,000 outlook (made) by the end of 2024. We still expect corporate earnings to increase by 10% this year with an implied price-to-earnings ratio of 13x and an anticipated 10% growth in earnings per share for 2025,” she said.

“Other key catalysts for our index target are easing inflation, the rate cut prospect, some election spending boost, and gross domestic product (GDP) growth that’s going to hit 6% target,” she added.

Unicapital’s PSEi forecast was trimmed because of lower earnings per share for last year, which reached 13%, lower than the initial projection of 16%.

Ms. Estacio-Cruz also forecasted a bear case scenario of 7,200 and a bull case scenario of 8,100 for the PSEi this year. Some of the sectors seen to grow include banking, consumer, real estate, real estate investment trust market, and gaming.

However, she noted that inflationary pressures, elevated interest rates, and escalation of geopolitical tensions could hamper the market’s growth.

On Thursday, the PSEi rose by 1.14% or 69.06 points to 6,113.19, while the broader all shares index increased by 0.78% or 28.54 points to 3,647.73.

“Right now, the PSEi is still significantly undervalued, trading at 51% discount to historical average. This is actually an opportunity for some of the funds to enter into the market,” she said.

Unicapital said the PSEi also sees a short-term rally during election season, with consumer companies registering a 5% to 10% increase in revenues due to heightened spending.

Meanwhile, Ms. Estacio-Cruz projected that the country’s GDP could grow by 6.3% this year, while the Philippine central bank could slash interest rates by another 50 basis points.

“We see an all-out election spending both on a local and national scale as we move closer to the May midterm elections. This, coupled with easing inflation, will boost household spending and ultimately favor the economy’s growth this year,” Ms. Estacio-Criz said.

“With 2025 being a favorable year for the Philippine economy, Unicapital also believes it is an opportune time for investments. This will further usher the country in its post-pandemic rebound,” she added.

Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said in the same event that external supply shocks for food and oil could impact the country’s growth. — Revin Mikhael D. Ochave