Jan. 13 (Bloomberg) -- Philippine property companies will outperform the benchmark stock index for a second year on expectations valuations will rise 28 percent as they set up real estate investment trusts, Credit Suisse AG said.
A measure of seven Philippine real estate stocks that’s valued at 17.6 times earnings will rise to 22.5 times in 12 months following a law in December giving tax breaks to property trusts, according to Gilbert Lopez, Manila-based strategist at Credit Suisse.
“The property sector enjoys the clearest and most specific catalysts for price appreciation,” Lopez said in a phone interview yesterday. “This is the first time since 2008 that we’re pounding the table in a major way on the sector.”
Five of Lopez’s top six stock picks are developers and property-related companies, which he predicts will advance as much as 50 percent this year, beating his forecast for the Philippine Stock Exchange Index’s 13 percent gain to 3,500. The benchmark gauge rose 0.6 percent to 3,105.62 yesterday.
The Philippine Stock Exchange Property Index jumped 73 percent last year as record remittances from overseas Filipinos and interest rates offset slower economic growth, beating the 63 percent advance in the benchmark measure. Click here to read more...
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