Stockbrokerage house AP Securities shared a few ideas on how investors can position themselves as looming interest rate cuts create opportunities for select property, consumer, and banking stocks.
Expectations for further easing are already having a tangible impact on market activity.
Despite being one of the slowest periods due to the “ghost month”, AP Securities observed net foreign inflows of over P8 billion in August—the largest so far in 2024.
“This is exceptional, and we attribute that to the rate cut,” Alfred Benjamin R. Garcia, head of research at AP Securities, said on Tuesday.
Banks are still hot
In a new report authored by Garcia, Joey Cipres, and Cholo Ramirez, AP Securities outlined top picks that were likely to outperform the broader market.
These include banks such as BDO Unibank Inc. (target price P180.18) and Bank of the Philippine Islands (P141.29), which managed to boost their loan portfolios despite elevated rates.
Other banks, such as Metropolitan Bank & Trust Co. (P83.20) and China Banking Corp. (P42.90), also have room to “aggressively” grow their loans before rates come down.
Easing inflation good for consumers and stocks
Apart from lower rates, AP Securities sees inflation easing to 3.4-3.6 percent in August and staying within the mid-3 percent range through the end of the year, which is within the target 2-4 percent range of the government.
This will help lift consumer-focused stocks such as Puregold Price Club (P40.16), Jollibee Foods Corp. (P335.28), Wilcon Home Depot (P20.86), and GT Capital (P871.25).
Don’t sleep on real estate
At the same time, property stocks such as Ayala Land Inc. (P39.32), SM Prime Holdings (P38.67), and Robinsons Land Corp. (P22.10) stand to gain amid this macroeconomic shift.
“Real estate’s continued growth despite high rates could translate to even faster growth on the back of rate cuts,” according to AP Securities.
“[The] middle segment to spearhead recovery as rate cuts continue while premium remains on upward trajectory,” it added.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
