· Philippines
investors favor developed economies over emerging Asia and show least
home-market bias of any investors in Asia
· Personal
networks, bricks and mortar dominate approach to investing
· Philippines
investors remain most optimistic in Asia
Investors in the Philippines are
among Asia's most optimistic and most outward-looking, given their willingness
to invest outside the Philippines to gain returns, according to the latest
Manulife Investor Sentiment Index* covering the second quarter of 2014.
Philippines investors reach
across emerging Asia to mature markets
When asked which region they think
is best to invest in, Philippines investors point to developed Asia,
Australasia and North America over emerging markets, including emerging Asia
and the Middle East and North Africa.
Fig. 1 – Philippines investors favour developed and distant
markets over China and emerging Asia
Philippines investors seem less affected by home-market bias
than any other investors in the survey. Given a selection of single markets,
they show most enthusiasm for Canada (76 points) and Japan (73) above the
Philippines itself (51), and show least for China (44), which most other Asia
investors rank relatively higher.
When it comes to growth, Philippines
investors are also most optimistic about Japan and Canada, with 19 percent
believing that Japan’s economy will be the fastest growing in the next two
years, followed by Canada, China and Australia. This contrasts markedly with
the average Asia investor, 27 percent of whom expect China’s economy to grow
fastest, followed by much lower expectations for Japan Australia and Canada.
Fig. 2 – Philippines investors’
views of which markets will grow fastest
contrasted markedly with
investors elsewhere in Asia
"Our research suggests that
Philippines investors’ preference for Japan is likely related to Japan’s first
quarter GDP growth which came in at 6.7 percent on strong consumer demand ahead
of the implementation of a new goods and services tax," said Aira Gaspar,
CFA, Chief Investment Officer of Manulife Philippines.
“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."
Philippines investors rely on friendly advice, ‘bricks
and mortar’ approach to portfolios
Despite their international outlook,
Philippines investors place their faith closer to home when it comes to making
investment decisions, with 88 percent relying on or referring to family,
friends or colleagues as a source of advice – the highest level in the region
and well above the regional average of 58 percent. They are less dependent on
industry staff, mass media or online sources of investment advice.
Philippines investors also have a
very ‘bricks and mortar’ approach to portfolio composition, with 61 percent
saying they own investment property (against the Asian average of 19 percent)
and 75 percent owning their own home (against an Asian average of 50 percent).
Cash and property together make up the bulk of their portfolios. Conversely,
they have much lower ownership of stocks (15 percent versus the Asian average
of 48 percent) and mutual funds (6 percent versus 23 percent) – even though
their sentiment towards equities is the highest in Asia.
“Philippines investors rely largely
on their own networks for their investment decisions" said Ryan Charland,
CEO of Manulife Philippines. "While it is comforting to speak with family
and friends for investment advice, investors would benefit from consulting
investment professionals, who could help them build a sound and diversified
portfolio that meets their medium to long-term financial goals.”
Philippines investors are Asia's most optimistic
In addition to their positive views
about investing overseas, Philippines 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 saw the biggest
increase, up 5 points to 50; followed by stocks, up 4 to 45. Mutual funds rose
1 point to 36. Property has taken the lead as the most favored asset class,
with home property highest at 75, up 1 in the quarter, while investment
property rose by 4 points to 74. Cash was the only asset class to see a
decline, down 9 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,” confirmed Ms. Gaspar. “We
believe sentiment was boosted by a credit rating upgrade from Standard &
Poor’s and an increase in government spending on much-needed infrastructure
projects. 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.”
For more findings and related
information from the Manulife Investor Sentiment Index in Asia, please visit www.manulife-asia.com.
