Investor activity in 2014 seen to remain robust

MANILA, Philippines - Investor activity is expected to remain robust next year, with an upside for a slight growth after investors weigh the effects of the gradual US Federal Reserve tapering.

The country’s growth story remains intact, a factor that could help restore investor confidence in the local bourse, an official said.

“We think of a 10-percent increment (in capital raising proceeds). We have a larger base now and we said there is better certainty about the taper,” PSE president and CEO Hans B. Sicat said.

Sicat said investors are now sure that the easing of the monetary stimulus, which has flooded financial markets with liquidity, will be gradual.

This year, capital proceeds from private placement, stock rights offerings and follow-on offerings declined 20 percent to P175.06 billion from P219.07 billion in 2012 as market volatility dampened the valuation of listed companies. With the projected increase, capital proceeds next year might reach P192 billion.

“With valuations where they are right now, it would help investors who want to come in the market next year,” Sicat said.

From recording the 31st all-time high this year at 7,392.20 on May 15, the benchmark PSE index closed 2013 at 5,889.83 due to a slew of negative news that dampened investor sentiment.

PSE data showed that net foreign buying plunged 85.83 percent to P15.58 billion as of end-2013 from P109.97 billion a year ago.

Foreign selling surged 74.68 percent to P1.29 trillion this year from P740.18 billion, enough to offset the 53-percent improvement in foreign buying at P1.3 trillion from P850.16 billion.

Sicat said several foreign fund managers left emerging markets in the fourth quarter in favor of developed markets like the eurozone.

However, the market’s growth story remains, offering gains for local stock market investors.

Sicat said the local bourse will be in a positive territory if factors like the fundamental economic story, branded consumer segment, low inflation and fiscal surplus reflect on investor sentiment.

For 2013, total market capitalization picked up nearly a tenth to P11.93 trillion from P10.93 trillion last year.

Average daily turnover value jumped 45 percent to P10.52 billion from P7.26 billion in 2012.

Despite the volatility, investor participation improved and the PSE posted a record number of issuance, Sicat said.

Including backdoor listings, PSE expects 10 firms to go public in 2014.

Seven firms joined the PSE through an initial public offering this year: Philippine Business Bank, Asia United Bank, AG Finance Inc., Harbor Star Shipping Services Inc., Robinsons Retail Holdings Inc., Travellers Hotel Group Inc. and Concepcion Industrial Corp. Del Monte Pacific Ltd. listed by way of introduction.

“2013 really has been a banner year for the PSE not just in terms of products and services that have been rolled out but the market response to our initiatives,” Sicat said.