HSBC Premier Marketwatch by Sun Life Financial Philippines

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The HSBC Premier Market watch seminar was held on March 14, 2012.  It was conducted by Moises Esguerra, fund manager from Sun Life Financial Philippines.  The seminar covered the fund manager's market outlook here in the Philippines and a summary of the fund performance of Sun Life's Mutual Funds.  Here are the highlights of the seminar:

Philippine Market Summary:
  • Philippine stocks ended Feb-2012 with another stellar performance up 4.6% month-on-month (+215 points), and up 12% on a year-to-date basis, its best in the last few years.
  • The month also saw the PSEi hit consecutive record levels reaching 4897.65 points last February 29 in a liquidity driven rally.  Net foreign buying for the month reached  USD $170 million.
  • The PSEi recently hit another all time high of 5030.58 points last March 5. (5,050 points last March 14).  To date, the index is still up by 14% as of March 9, 2012. (More after the jump)

Phillipine Market Outlook:

  • Expect continued volatility in the local equities market as headwinds in developed markets persist.  Debt concerns and imminent recession in Europe will dampen investor sentiment. (ex: Greece)
  • PSEi will continue its uptrend as the economy is expected to grow 5-6% in 2012.  Government pledged to improve spending to pump prime the economy.
  • PSEi will reach 4900-5200 levels in 2012, with corporate earnings growth of 8-10%
  • A sovereign credit upgrade to investment grade will boost investor sentiment.
Economic / Market Drivers:
  • Foreign inflow of funds into emerging markets.  
  • Increased participation of local investors in the equity markets given the low interest rates.  Local investors now account for 60-80% of value transactions in the Philippine equity market compared to below 50% in the previous years.
  • While the Philippine market at 15.1 P/E ratio is no longer cheap relative to its peers in Asia, growth story is intact and and it has to capacity to fuel growth.
  • Key factors: Public-Private Partnerships (PPPs), Sizable and young population, International reserves are at all-time high, the growing Business Process Outsourcing (BPO) sector, political stability (high popularity rating of the current president), and improved Philippine credit standing.

  • Maintain bias towards companies with resilient earnings given fiscal concerns in US and Europe
  • Invest in Banking, Infrastracture, Growth-driven conglomerates, Commodities, and Discretionary consumer (Gaming) industries.
  • Sun Life's Equity fund allocation is already at 88% of total assets.  
  • Around 40% of Sun Life's Equity Mutual Fund is invested in Blue chip stocks. 

Tips to Investors:

  • Do not time the market - you'll only know the bottom when you're already up there.  It is better to match your long term investment horizon with long-term products.
  • Think as investors, not fund managers - let the professionals manage it for you.  Focus on your investment goals and time horizon.
  • Improve your opportunities for gain if you stay with a diversified portfolio.

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