Fund managers upbeat on Phl, Asian marts

MANILA, Philippines - International fund managers remain bullish on equity investments in the emerging Asian markets including the Philippines, a survey by Hongkong and Shanghai Banking Corp. (HSBC) showed.

HSBC deputy head of personal financial services Annette Tirol said the survey reflects the improved confidence of the global financiers on the overall economic outlook in the region.

“Despite continued market uncertainty and volatility, appetite for equities remains strong yet selective towards regions of higher growth. We expect that the focus on the stronger economies of Asia like Greater China and the emerging markets will continue through to the beginning of 2011 as growth in developed markets remains lackluster,” she said.

She added that yields for fixed-income investments would also be supported by benign inflation and prolonged by a low interest environment.

Net flows recorded strong positive growth in emerging markets bonds, global bonds and equities in the emerging markets in the Asia Pacific region as global fund managers shied away from the equity markets of Europe, Japan and the United States.

Funds under management (FUM) rose by $345 billion as of end-September or nearly 10 percent higher than at the end of the first semester. Equity funds led the increase, rising by $156 billion while bonds were up by $107 billion.

The HSBC survey indicated that net inflows for high-yield emerging markets bonds reached $10.68 billion, twice the amount recorded at the end of the first semester.

Emerging markets equities net inflows were at $1.9 billion, recovering from a net outflow of $2 billion from the second quarter this year.

Tirol said corporate bonds and emerging market bonds were relatively attractive to investors while equities in Asia-Pacific continued to present growth opportunities in a prolonged low-interest environment.

Last Thursday, the Bangko Sentral ng Pilipinas (BSP) said foreign portfolio investments or “hot money” hit a new record inflow of $4.18 billion as of end-November, exceeding the full-year target of $2.9 billion set by monetary authorities.

Meanwhile, investments in publicly-listed companies jumped 71 percent to $7.7 billion in the first 11 months of the year from $4.5 billion last year. The sectors that absorbed most of the foreign investments were banking, property development, holding companies, telecommunications companies, and utilities. The United Kingdom, Singapore, Luxembourg, Hong Kong, and the US were the top sources of investments.