MANILA, Philippines - Philippine American Life and General Insurance Co. (Philam Life) is looking to expand its stock investment portfolio in a bid to boost its reserves and assets under management.
“Philam Life will not limit itself to investing in index stocks and may look into non-index stocks to seek better returns for their funds,†Philam Life Equity Fund Management head Eduardo Banaag said.
He pointed out that there are several non-index stocks with strong fundamentals and good valuations, including steady price-to-earnings (P/E) ratios.
Banaag said focusing merely on the 30 stocks included in the benchmark Philippine Stock Exchange Index (PSEi) limits the company’s opportunities for growth.
He said index stocks are forecast to expand by at least two percent by yearend. With expectations that corporate earnings will continue to grow alongside the economy, stocks prices will follow suit. Overall, corporate earnings are seen to grow around 16 percent this year.
Life insurance companies must invest in various instruments to increase the value of its reserves for future claims of its insured clients.
Philam Life is also managing mutual funds through its subsidiary, Philam Asset Management Inc. (PAMI). The mutual funds have placements from individual and institutional investors, including variable or unit- linked investments.
Foreign direct investments (FDI) and businesses are also expected to come in as international investors now perceive the Philippines as a safe country to invest in with its investment grade status.
This as foreign fund managers are waiting on the sidelines for the US Federal Reserve report, which is largely expected to dictate the movement of global markets.
“For the end of year, we expect the PSEi to gain around 15 to 17 percent and continue on rising for 2014,†Banaag added.
Adding to the optimism of high liquidity is the eventual withdrawal of funds from the special deposit accounts (SDA) at the Bangko Sentral ng Pilipinas (BSP).
Industry figures show that up to P1 trillion will migrate from the SDA accounts and flood the markets. Investors will likely swarm at the stock market, mutual funds, unit investment trust funds (UITFs), bond market, insurance and real estate.