Stocks seen to perk up soon

Stocks may soon find their way out of the doldrums as foreign fund managers have started to take notice of the local stock market and are preparing themselves for a planned entry into the Philippine capital market in the near term.

Equity-1 Ltd., a Hong Kong-based investment fund with a portfolio worth over $200 million, is one such company upbeat on its prospects in the Philippines.

Its chairman Shayne Heffernan told The STAR that they are now in talks with a banking giant and other local financial institutions to explore options in establishing their presence in the country, either via a joint venture scheme or equity investment.

"We are definitely interested in investing in the Philippines. Our plans are in place and we should be able to set them into motion by August this year," Heffernan said.

Aside from stock investments, Equity-1 is also active in foreign exchange trade, commodities exchange, and fund management. Its fund portfolio is scattered in the top markets of the US, London, Singapore, Australia and Hong Kong.

Heffernan said his company is also on the lookout for entities that are ripe for acquisitions or leverage buy-outs, citing at least three firms where Equity-1 has taken over from the stock market.

Based on the stock tracking software patented by Australia’s EStar Online Trading, which Heffernan’s company subsequently bought, Equity-1 was able to acquire at bottom prices Allied Research, a US-based defense-oriented research company, and Helix Resources, a platinum mine operator from Australia – both of which are now trading at higher prices due to their growth potentials.

"There are a lot of good companies in the Philippines where we can invest," he said, enumerating blue chip issues like San Miguel, Meralco, SM Prime and the telecommunications firms.

Heffernan said local stock prices have fallen and are relatively cheap that it would be a good move to enter the market this early to get ahead of an upside correction once the Philippine economy starts to take off.

"Most (foreign) institutions have shied away from the Philippines because of the low volume of trades and the uncertainty of the political and economic environment. But things now seem to be showing some improvement particularly with the new government," Heffernan said.