Canada, Japan top investment choices for Phl investors

MANILA, Philippines - Investors from the Philippines prefer to put in money in markets in Canada and Japan rather than in neighboring Asean countries, result of the latest Manulife Investor Sentiment Index showed. Based on the survey, Philippine investors point to developed Asia, Australasia and North America over emerging markets, including emerging Asia and the Middle East and North Africa.

Given a selection of single markets, the Manulife poll showed investors were mostly biased on Canada (76 points) and Japan (73) above the Philippines itself (51), and show least preference for China (44), which most other Asia investors rank relatively higher.

Manulife Philippines chief investment officer Aira Gaspar said Philippine investors’ preference for Japan is influenced by Japan’s first quarter economic growth, which came in at 6.7 percent on strong consumer demand ahead of the implementation of a new goods and services tax.

 “It’s also interesting that Philippines investors seem so keen on Canada. We think there is a sound basis for this given that Canadian equities outperformed their developed market peers in the first quarter,” she added.

Meanwhile, Philippine investors remain optimistic about investing at home with the sentiment index for domestic investment at 59, the highest in Asia. This optimism was spread across all asset classes in the survey, which all saw increases except cash.

Fixed income registered the biggest increase, up five points to 50; followed by stocks, up four to 45. Mutual funds rose one point to 36.

Property has taken the lead as the most favored asset class, with home property highest at 75, up one in the quarter, while investment property rose four points to 74. Cash was the only asset class to record a decline, down nine to 73, but still remains high.

“Filipino respondents were generally upbeat, despite weaker-than-expected first quarter 2014 GDP growth and uninspiring corporate earnings for the same period,” Gaspar said.

The Manulife Philippines investment officer said the positive sentiment was boosted by a credit rating upgrade from Standard & Poor’s and an increase in government spending on much-needed infrastructure projects.

She added that the country’s resilient private consumption, rising investment cycle, recovering manufacturing industry, and favorable consumer and business confidence bode well for economic activity and a positive earnings growth story.

 “However, investors’ sentiment could turn sour if policy reforms aimed at addressing infrastructure deficiencies and fostering inclusive economic growth stall,” she added.

Manulife’s Investor Sentiment Index in Asia is a quarterly, proprietary survey measuring and tracking investors’ views across eight markets in the region on their attitudes towards key asset classes and related issues.

Manulife Philippines is a subsidiary of Manulife Financial Corp., the leading insurance and financial institution in Canada. It has significant operations in Asia, and the United States. It is listed in several stock markets including the Philippine Stock Exchange.