GSIS to hike stock market exposure

MANILA, Philippines - The state-owned Government Service Insurance System (GSIS) is plunking more funds into the domestic equities market to bring total exposure to as much as 19 percent of its investible funds by the end of the year from 15 percent in 2011, according to its top executive.

In a briefing yesterday, GSIS president and general manager Robert G. Vergara said the state-run pension fund wants to take advantage of a rampaging bull market that has risen by 8.7 percent so far this year.

He said the agency chalked up P104 billion in revenues from the stock market last year and sees sustained upward trend especially with an expected credit rating upgrade this year.

Vergara said he expects the main benchmark index to breach the 6,500 level given strong capital inflows and robust investor confidence in the country.

 â€œI think the 6,500 level will be exceeded.  I will not be surprised if the market runs up to the 7,000 level this year,” Vergara said.

He said GSIS is keen on banks, property and gaming companies as it started unloading some of its mining stocks pending resolution of the government’s mining revenue sharing scheme.

 â€œProspects for the gaming sector is very positive because of the opening of the Solaire Manila and Belle Grand Manila Bay,” Vergara said.  

Vergara sees earnings from equities to increase by an additional P12 billion at 6,500 level, P16 billion at 6,800 level and P20 billion at 7,000 level.

GSIS, one of the large investors in the stock market, had P685 billion worth of investable funds as of end-December last year.

Of the total portfolio, fixed income investments get the biggest slice at 45 percent followed by loans to members (30 percent), equities (15 percent) and property (5 percent).

GSIS registered revenues of P130 billion last year, up 8.3 percent from 2011.