World's biggest money manager "BlackRock" picks Philippines, Indonesia as top share hunting ground

BlackRock, Inc. is a U.S.-headquartered multinational investment management corporation based in New York City

HONG KONG - BlackRock Inc, the world's biggest money manager, said improving economic indicators in Indonesia and consistent corporate earnings in the Philippines make those two countries prime hunting grounds for Southeast Asian stocks.

Indonesia has slashed its current-account deficit and tamed inflation, strengthening its previously ailing currency. In the Philippines, companies have met forecasts more often than the rest of Asia during a period of successive sovereign credit rating upgrades.

Immediate beneficiaries of economic growth include consumer, financial and infrastructure shares. These make up more than half of BlackRock's $244 million ASEAN Leaders Fund which features stocks such as Indonesian state-controlled lender Bank Mandiri Persero Tbk PT and conglomerate Astra International Tbk PT.

Southeast Asian markets saw sharp volatility last year when investors pulled out in anticipation of tighter liquidity as the U.S. Federal Reserve winds down economic stimulus. Interest has since returned, with Indonesia's main stock index .JKSE rising 18 percent in dollar terms this year, the highest in Asia.

"In an environment where we are sort of pulling back on liquidity with (Fed) tapering, there was an initial shock in these countries and currencies," said head of Asian equities Andrew Swan at the Reuters ASEAN Summit in Hong Kong.

"But current account deficits are declining and trade surpluses are increasing. And that's been quite pleasing I think for many people to see that it's actually happened reasonably quickly, and that's why money is coming back."

BlackRock's Indonesian investments amounted to less than its benchmark index for most of last year. Last month, however, Swan raised the proportion of Indonesian securities in BlackRock's ASEAN fund to 20.2 percent, 1.5 percentage points higher than the MSCI South East Asia Index, according to the fund factsheet.

The proportion of Philippine securities was 8.6 percent which, at 2 percentage points higher than the benchmark, was the fund's boldest exposure.

Indonesian and Philippine shares currently trade at nearly 3.5 times and 3 times their book value - or companies' total value - indicating they are the most expensive in Asia. Shares in the rest of the region, excluding Japan, average 1.4 times.

The stock may be expensive, but Swan said earnings per Philippine share so far in 2014 have been similar to earnings over the past two-and-a-half years, whereas elsewhere in Asia ex-Japan earnings on average have been 25 percent lower.

Increased investment in the Philippines, resilient income growth and a current account surplus - indicating more money coming into the country than going out - suggests a chance of future earnings exceeding analyst estimates, Swan said.

In Indonesia, swift economic adjustment came as a surprise, Swan said. The current account deficit is narrowing, suggesting "we are getting through the worst of the adjustment process."

The deficit in the fourth quarter was about 2 percent of gross domestic product. That compared with a record 4.4 percent six months before, and was the narrowest since the second quarter of 2012.

BlackRock's ASEAN Leaders Fund returned 2.2 percent in the first two months of 2014, outperforming a 1.6 percent gain in its benchmark MSCI South East Asia index.

The fund returned 1.7 percent last year when its benchmark was down 4.5 percent and fund peers lost 5.3 percent, according to data compiled by global fund tracker Thomson Reuters Lipper.

Swan's top bets in the fund he co-manages include Singapore Telecommunications Ltd, Keppel Corporation Ltd and Malayan Banking Bhd. - ABS-CBN News

 

PINOY MAG NEGOSYO KA, Post your ads, Services, Products, Jobs, Auction and win the bidding .. Bring all your store online FREE Visit Pilipinas Online Shopping Mall at [ www.PilipinasMall.com ]

 

Continue reading

France' Compagnie Française d’Assurance (COFACE) cite Philippines as top emerging economy

The Philippines is among the top countries with “emerging economies,” a French credit body said in its latest economic publication.

Compagnie Française d’Assurance pour le Commerce Extérieur (COFACE) cited the Philippines as a country with high growth potential and the most favorable prospect of increasing production capacity in the years to come.

COFACE said the Philippines is also considered to have the most favorable business climate.

Other countries recognized as top emerging economies include Peru, Indonesia, Colombia and Sri Lanka replacing Brazil, Russia, India, China and South Africa.

The criteria used by COFACE to determine the new emerging economies include intermediate level of per capita income (above that of less advanced economies but below that of advanced economies); higher GDP growth rate than most advanced economies; and major institutional transformations.

“This piece of economic good news comes at the heels of the report that the International Monetary Fund (IMF) had raised its 2014 economic growth forecast for the Philippines to 6.5%, up from its January projection of 6.3%. Standard and Poor’s (S&P) also raised its growth projection for the Philippines to 6.6% for 2014,” DFA said in a statement Friday.

The IMF and S&P are leading providers of global credit benchmarks, policy advice and research to foster economic development and growth around the world, while the COFACE is the French credit rating agency which publishes quarterly risk assessments for 160 countries.

 

PINOY MAG NEGOSYO KA, Post your ads, Services, Products, Jobs, Auction and win the bidding .. Bring all your store online FREE Visit Pilipinas Online Shopping Mall at [ www.PilipinasMall.com ]

 

Continue reading

Philippine imports surge 222% in sign of rising growth: govt

Workers unload sacks of rice from a truck at the National Food Authority warehouse in Manila.- Bloomberg 

Philippine imports surged 21.8 percent in January, their highest level in nearly three years, with imports of raw materials indicating further upward momentum for one of Asia's fastest growing economies, the government said Tuesday.

It was the biggest rise since March 2011, when imports grew by 21.9 percent, National Statistics Office figures showed.

The Philippines, formerly an economic laggard, grew by a remarkable 7.2 percent in 2013 despite a series of disasters including the devastating Super Typhoon Haiyan in November. Its growth last year was second in Asia only to China, officials said.

Imports surged due to a recovery in Philippine exports such as electronics and garments and increased spending on infrastructure, especially in areas affected by Haiyan, said Rosemarie Edillon, assistant director general of the government's socio-economic planning agency.

"The economy is definitely going to grow. A huge chunk of these imports are for production: capital goods and investments for the manufacture of other goods," she told AFP.

Imported raw materials are a major input in many of the country's key exports such as electronics and garments so the surging imports mean even higher exports later, she said.

"These imports are a leading indicator for exports two or three months down the road. If imports in January increase, we will probably see an increase in exports in March and April," she said.

The increase in shipments of steel, metal and chemical products were also an indication of the major construction efforts being undertaken, both to upgrade infrastructure and to rebuild the damage caused by the disasters, she added.

Imports in January hit $5.757 billion, up 21.8 percent from the same period last year, the statistics office said.

This resulted in a trade deficit of $1.376 billion in January, up 92 percent from the same period in 2013.

Socio-economic Planning Secretary Arsenio Balisacan also said in a statement that "this positive (import) performance may be reflective of the optimistic outlook of businesses on their own operations", in the second quarter of the year.

China was the biggest source of imports to the Philippines, accounting for 14.7 percent of the total, with the United States in second with 10.6 percent, the statistics office added.- MSN News

 

Continue reading