Philippine stocks cannot outperform other stock markets all the time.

Are we at the tail end?
If one were to consult sellers, the probability of the benchmark PCOMP Index reaching “bottom” is low. So, the question remains, why are Foreign-domiciled funds still selling? The simple answer is: sellers are taking profit.

Sellers are taking profit because they know that Philippine stocks cannot outperform other stock markets all the time. Thus, this opportunity to take profit now when Philippine stocks are doing well is irresistible. To recall, Philippine stocks “disconnected” from the rest of the world soon after the elections. The local stock market rallied for several weeks after elections while investor sentiment deteriorated globally. As they have in the past, traders will take profit even if they are convinced
that the local stock market can outperform most other markets for most of the time.

Traders will stop selling when there is little or no profit left to take, or when the local market is due for a “bounce”. If it is a question of whether the Philippines is “expensive” or “the most expensive” stock market, then no trader nor stock fund would be interested in Philippine stocks at all.

“Expensive” is old news.

The expensiveness or intrinsic value of a stock market is driven by the cash flow, growth and risk character of its listed companies – not by the trading pattern or signal generated by technical analysis in charts. The intrinsic value of the Philippine stock market is higher than most other markets because of the persistent reality of stronger cash flows, higher economic growth prospects and lower risk that characterize Philippine companies when compared to many companies in most other markets. The reality is persistent because of the character of the local economy, for example the country’s demographics is in a sweet spot with most of the population in working age.

“Price” is driven by the “weight” of the buy and sell flows of traders. Simply put, it is the balance of the demand and supply of shares that determine price. However, stock prices tend to “approach” their intrinsic value. The estimate of the intrinsic value of Philippine stocks by analysts now stands at 8,166, based on a survey from Bloomberg. Expectedly, as stock prices fall or become cheaper relative to their intrinsic value, demand for Philippine shares will increase.

Investors who have a long-term perspective of the markets and are aware that they cannot ‘catch the bottom’ will take on the view that the current administration’s economic agenda will speak louder than the president’s unpredictable words. Investors will look at the economic agenda to find the cheapest stocks.

Fortunately, the theme of ‘inclusive growth’ which aims to increase the purchasing power and improve the living standards of the majority of the Filipinos makes the most-attractive industries or sectors obvious, that is food and staples retailing, packaged foods and meats, restaurants, and multi-sector holding companies involved mostly in infrastructure.

In order to avoid the predicament of waiting in the wings and remaining un-invested, investors will have to start buying before the traders stop selling. It also keeps investors from getting left behind when the stock market does “bounce”.

Philam Asset Management Inc. bags six awards from PIFA

Philam Asset Management Inc., (PAMI), the asset management arm of Philam Life, once again received acclaim as one of the country’s leading fund management companies after bagging six awards at the Philippine Investment Fund Association (PIFA) 10th Annual Awards Night.

The country’s mutual fund industry association, PIFA, in its annual awards recognizes the top performing mutual funds in terms of returns for one-year, three-year, five-year and ten-year periods.

The PAMI Horizon Fund, Inc. won first place in the 10-year return, peso-denominated balanced fund category. PAMI’s other peso-denominated balanced fund, the Philam Fund, Inc., won second place under the 10-year return in the same asset-class category.

The Philam Managed Income Fund, Inc. won 2nd Place in both the 3-year and 5-year return under the Money Market Fund Category.

Meanwhile, under the dollar-denominated Bond Fund category, the Philam Dollar Bond Fund, Inc. won third place in the 1-year return and second place in the 10-year return.



Philam Life and PAMI receive citations from The Asset

In addition to its awards from PIFA, Philam Life/ Philam Asset Management Inc., was cited as among the Top 5 Investment Houses for 2016 by The Asset, earning the recognition for three years now. This reflects the company’s investments expertise and sound management of its financial assets.

“We are proud to have sustained our place in the local financial markets as a credible and prudent institutional investor supporting market liquidity while upholding ethical standards in securities trading,” said Arleen May Guevara, Philam Life Chief Investment Officer. 

Two Philam fund managers were also recognized as among the Most Astute Investors in Asian Local Currency Bonds from the Philippines for 2016: 

Kathrina Dizon

Kathrina Dizon, Philam Life deputy head of fixed income securities trading office, ranked # 3 in the top 10 ranking.

Katherine Castelo

Katherine Castelo, Philam Asset Management Inc. head of fixed income portfolio management,was recognized as among the Highly Commended. Both have been recognized by The Asset as top ranked for more than three consecutive years.

The ranking for the Most Astute Investors in Asian Local Currency Bonds is based on nominations received from nearly 500 top-rated individuals including analysts, economists and strategists, salespeople and traders in Asian local currency bonds. The nominations were based on their knowledge of the credits and markets, trading skill and acumen in making investment decisions. Based on the nominations received, the top ten Astute Investors with the highest weighted score are ranked by geographic location. The next ten names are considered in the ‘Highly Commended’ category.

The ranking for the top five investment houses in Asian local currency bonds is based on the number of votes received from the top-rated analysts, economist and strategists, salespeople and traders, for
investors in these institutions. Around 280 different institutions across the region including asset managers, insurance companies, banks and securities firms were evaluated to create the 2016 ranking.

The recognition is given by the Asset Publishing and Research Ltd., an integrated multi-media company serving the elite community of leading corporate and financial decision makers in Asia.