GSIS ready to invest more in stocks

MANILA, Philippines – The Government Service Insurance System (GSIS) is preparing to increase its stock market portfolio as the prevailing volatility in the local bourse provides opportunities for bargain hunting.

GSIS president and general manager Robert Vergara told The STAR the state pension fund is now on the lookout for more market opportunities following last month’s approval by the board of trustees to increase the fund’s stock portfolio by 10 percentage points.

He said GSIS is particularly looking at those with large market capitalization and dividend-yielding investments.

“We will be very opportunistic in how we increase our equity holdings and will not be rushed in the process. We went to the board because we were at or very close to the limit at a time when the PSE (Philippine Stock Exchange) Index was showing signs of weakness and we wanted to make sure that in the event that the market retreated significantly and valuations dropped to attractive levels, we would have the flexibility to add to our stock portfolio,” Vergara said.

Last month, the GSIS board approved an increase on the cap on equity investments to 30 percent of its total investible fund from 20 percent. This means with a total investible portfolio of P874 billion, GSIS can invest up to P87 billion in the stock market.

Vergara said GSIS prefers the local stock market over equities abroad.

“As you know, our investment horizon is medium to long term, over three to five years, and we see upside to the local market, preferring it over equities overseas,” he said.

Given the size of the GSIS portfolio, Vergara said the company is looking at those with large capitalization, with a focus on stocks with good dividends.

“We like the consumer sector, utilities for their dividends, infrastructure plays, and banks,” Vergara said but declined to comment on specific stocks.

He said GSIS is keeping a close watch on Philippine shares’ price valuations compared to those in other regions.