Heavy inflow of foreign investments seen

Citi exec sees more cross-border M&As

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Shoppers crowd a night market at a mall in Manila in this 2010 file photo. Prospective investors are looking at the country’s resilient consumer market, which continues to be supported by overseas remittances and business process outsourcing revenues, says investment banking expert Kristine Baden of Citibank Philippines. AFP PHOTO/TED ALJIBE

The Philippines is expected to see a heavier influx of foreign direct investments this year as its robust consumer market offers a fertile ground for cross-border merger and acquisition (M&A) deals, an investment banking expert from Citibank said.

Kristine Braden, head of Citibank Philippines’ global banking unit, said many offshore investors were increasingly interested in plowing funds into the domestic economy, particularly in the financial and consumer sectors. Such investments could be executed this 2012 on top of portfolio investments likely flowing to a good pipeline of bond and equity offerings by local corporations, she added.

At the same time, Braden said a number of cash-awash Philippine corporations were on the prowl for offshore investment opportunities. She said they were looking for overseas acquisitions complementary to existing businesses, citing power generation companies wanting to gain a foothold in coal mining.

“We’re starting to notice an increased interest in cross-border M&As and I’m happy given that FDI in 2011 was actually relatively low compared to 2010,” Braden said in an interview with the Inquirer last week.

In the consumer sector, for instance, Braden said that at least once a week, a new investor would touch base to scout for domestic opportunities. She said these prospective investors would like to ride on the country’s resilient consumer market, which continued to be supported by overseas remittances and business process outsourcing revenues.

“If you’re looking at growing population, continued strength of consumers as a driver of the economy, there aren’t that many countries where you can find those dynamics today,” Braden said, adding that such strong underlying fundamentals plus abundant liquidity were very attractive for investors. “So we expect to attract several inflow consumer transactions in 2012,” she said.

Like the case of Malaysian banking giant CIMB in talks to buy into Bank of Commerce, Braden said regional banks could find opportunities in investing in medium-sized banks.

Other sectors like infrastructure, tourism and mining were also becoming interesting, she said. In the local power sector, she said there could be some minor M&A deals involving the entry of strategic minority partners to fund a new round of capital expansion or undertake something related to off-take requirements.

On the bond market, Braden said some new deals might come through in the second quarter and toward the end of the year following the Philippines’ successful return to the offshore bond market and again doing the region’s curtain-raiser.

“The interest rates offshore are just compelling at the moment. For the ROP [Republic of the Philippines] to raise 25-year money at 5 percent (a year), this creates a great benchmark for other issuers,” Braden said. “The thing is, at the end of last year, US dollar rates spiked so it became less attractive to raise debt offshore but now with the interest rate so low, I think people may go back and reconsider doing dollar bonds.”

She said the government’s recent return to the US dollar bond market after focusing on peso-denominated global bonds in the past was still a good fit to the sovereign’s liability management strategy. “They will always need to maintain a relationship with foreign investors and they did it with such a low rate for such a long term. It was a blowout success,” she said.

Citi was among the arrangers of the Philippines’ recent $1.5-billion global bond issue.

With the Philippine stock market outperforming all its peers in the region and remaining buoyant this year, Braden said equities would remain interesting this year. With the requirement of the Philippine Stock Exchange for listed companies to maintain a minimum of 10-percent public float, she said this would spur some follow-on offering.

“But I think that beyond that, with the domestic exchange doing relatively well and again the Philippines being one of the better-performing economies, it will pique the interest of investors and issuers to go the market,” Braden said.

“The key is to define from what part of the world the investments are coming from and I suspect that a lot of the interest will still be anchored off Asian liquidity. US investors are interested in the Philippines as well,” she said.

Finally, Braden said she expected hybrid instruments like convertible bonds (CB), debt paper that the holder can convert into common stocks or cash of equal value, with the presence of two factors that traditionally fuel interest in these instruments—volatility in equity markets and low interest rates.

She noted that the Philippine market has not seen any CB issuance lately and instead favored preferred shares.

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  • Anonymous

    Pati sa pag estimate ng bilang ng salita bobo ka eh noh? Ang layo tanga! Hindi mo binasa? O napahiya ka?

    “wala sa reality ang comment ng citibank na heavy inflows” Dahil sa GDP na naman? Tama na! Tumahimik ka na lang. Bobo!

    • http://pulse.yahoo.com/_Q3QGG5QHBLRMZTIYWUFURY6J2E Night

      Bilib na bilib ka sa Citibank na sinabi ‘heavy inflow of foreign investors likely’………….. kung hindi nga major component ang foreign investments dahil dati hindi na pasok…… biglang papasok na ngayon…. bobing aralin mo ang factors bakit hindi sila na pasok… tiwala ka na agad sa citibank….. 

      kahit basics siguro ng analysis sa bangko hindi mo naiintindihan.. TANGA!!!

      Shinta1 and Shinta buwahaha 

  • Anonymous

    Talaga naman palang bobo ka eh noh? Lahat ng mga tanong mo liban sa letter c eh nasagot ko na. Hindi ka magmumukhang tangang paulit ulit kung marunong ka lang umintindi.

    A, B, and D: kung investment ang paguusapan, mas magandang basehan ang PSEi kaysa sa GDP. Bakit? Dahil nga sa paulit ulit ko ng sinasabi na isa lang sa apat na addends ng GDP ang gross investment. Hindi dahil lang mababa ang GDP eh sasabihin mo ng mababa ang investment dahil mayroon pang tatlong addends. Ikaw mismo, pinaulit ulit mo rin ‘yan. Ano ang sinisisi ng mga kritikong hindi mo kagayang walang utak? Sinisisi nila ang government expenditure–one of the other three addends. Sinisi ba nila ang investment? Hindi! Isa sa mga dahilan ay ang PSEi. While it is not the only investment instrument,it is one of the biggest factors of how much investment our country is getting; and it has remained relatively robust! Tumaas man ang investment, kung mas mataas naman ang binaba ng private consumption, government expenditure, at net export, bababa parin ang GDP. Ngayon, ang tanong: imposible bang naging mas mataas ang investment kung bumaba ang GDP? Kung oo ang sagot mo, ikaw ang uminom (hindi kumain) ng Sustagen para magkalaman ang utak mo. Isa pa, ang sinusukat ng PSEi at ng lahat ng iba pang idexes ay value. Hindi flow! Volume ang sinasabi mo. Volume refers to the number of shares traded. ‘Yan ang flow. Kung may problema ka sa pagkuha ng idexes, si Charles Dow ang kausapin mo, nang magmukha kang tanga na naman. Ang pag taas ng PSEi, pag taas ng values ng mga stocks. Ang pag taas ng volume, pag dami ng mga binenta at biniling stocks. A high volume shows that there were many stocks bought and sold (inflow + outflow). It may or may not be a good thing, and it helps measure the volatility of the market. A high index, on the other hand, shows that the total increase of the values of the stocks listed is greater than the total decrease. ‘Wag kang mag marunong kasi nakakahiya ka.

    Bibigyan pa ulit kita ng pagkakataong mag mukhang tanga. Which is a better measurement of investment inflow, not overall growth—I have to explain to at least do something about your stupidity: PSEi o GDP?

    C: “This communist North Korea now?” do you really want to know what is wrong with this expression? “This correct expression now?” Kailan pa nagkaroon ng interrogative noun phrase? “idiot!” Magbigay ka pa nga ng isa. ‘Wag nalang pala kasi ang baho mo mag English.

    • http://pulse.yahoo.com/_Q3QGG5QHBLRMZTIYWUFURY6J2E Night

      habang sagot hahahaha lagi siguro na reject mga post mo…… tanga wag ka mag marunong sa comment page walang kwenta…… sa tingin mo makukuha sa 1000 words ang pag explain sa psei, economics, govt expenditure….

      suma total, wala sa reality ang comment ng citibank na heavy inflows….. walang heavy inflows. tanga! ikliaan mo reply mo wala ako binasa kung hindi abcd haha Istupido

      • Anonymous

        Nakuha mo pang mag imbento ng ibig sabihin ng mga idexes. Ano akala mo sa mga tao dito, katulad mong bobo?

      • http://pulse.yahoo.com/_Q3QGG5QHBLRMZTIYWUFURY6J2E Night

        haha eto ba ang definition mo ng index?
        ang sinusukat ng PSEi at ng lahat ng iba pang idexes ay value. Hindi flow! Volume ang sinasabi mo. Volume refers to the number of shares traded. ‘Yan ang flow. Kung may problema ka sa pagkuha ng idexes, si Charles Dow ang kausapin mo, nang magmukha kang tanga na naman 
        tanga diba ang point mo, kapag mataas ang PSEI mataas ang Investments….??

        basahin mo yung PSEI flows…. me flows ako nilagay BOBO

      • Anonymous

        Eh bobo ka pala talaga eh! PSEi ang nag all-time high. Hindi volume! Bobo!!!

      • Anonymous

        Hindi naman pinagmamali ang dami ng volume. Mas delikado pa nga ang ganun. Ibig sabihin volatile ang market. Ang tanga tanga naman talaga eh.

      • Anonymous

        tanga diba ang point mo, kapag mataas ang PSEI mataas ang Investments….??
        Oo! Isang malaking factor ang demand sa pag taas ng values ng stocks. Anong patunay nito? Ang malaking deprensya na market values at book values ng mga stocks. Tigilan mo na ‘yang pag mamarunong. Sa tuwing magsasalita ka, nagmumukha kang tanga.

      • http://pulse.yahoo.com/_Q3QGG5QHBLRMZTIYWUFURY6J2E Night

        ang bobo mo talaga Shinta1…….. halatang bagito ka lang sa stock market at mukang sa seminar lang sa PSE mo nakuha yung mga pinag sasabi mo dito

        a) ang volume ng PSE hindi sinusukat? ang portfolio flow hindi sinusukat ng Bangko Sentral?????? TANGA
        b) Kapag mataas ang PSEI mataas ang valuation… mataas ang demand…. not necessarily mataas ang portfolio inflows BOBO…………
        c) bakit pwedeng mataas ang Index pero negative portfolio flows? Kasi pwedeng locals ang bumili at hindi bumaba ang valuation…….

        bobong bagito…. trabaho ka muna sa psei at mag paka trader ka muna BOBO

      • Anonymous

        Haha! Kung ano ano nalang sinasabi mo. Bobo ka nga talaga!

        A. Wala akong sinabing hindi sinusukat ang volume. Importante ‘yan kung investor ka. Kung mababa ang tolerance mo sa risk, iiwasan mo ang mga stocks na mataas ang volume. Ang sinasabi ko, na hindi kayang maintindihan ng utak mo, ang flow ay volume, hindi PSEi! Tanga tanga naman talaga eh. PSEi ang nag all-time high!

        B. “mataas ang demand…. not necessarily mataas ang portfolio inflows” Mataas ang demand ng stock, pero hindi mataas ang inflow? Pakinggang mo nga ang sinasabi mo! Kaya nga tumaas ang demand dahil maraming gustong bumili ng stock. Paanong hindi tataas ang inflow? Hindi man mag release ng mga bagong stocks ang isang kumpanya, tataas parin ang inflow dahil ‘yung presyo tumataas. Ang ibig sabihin mas maraming pera ang papasok. Bobo!

        C. It is highly unlikely but possible. One of the things that can increase an index amidst having a negative flow is the companies listed doing so well that the book values of the stocks increase despite the stocks being sold (which causes a negative flow).

        ‘Wag kang mag trabaho sa PSEi. Hindi naman nagtatrabaho ang mga tao sa isang index. Magtrabaho ka sa PSE. Tanga! Tanga! Tanga!

      • http://pulse.yahoo.com/_Q3QGG5QHBLRMZTIYWUFURY6J2E Night

        haha kung ano ano sinasabi mo inutil……….. haba nanaman ng sagot mo marami gusto patunayan pang bagito ang alam……… PSEi buwahahaha 

        foreign investor portfolio lang ba ang me pera???? Eh ano yung nilarong stong ng Philex ni Ongpin… portfolio inflows ba iyon????? BOBO domestic pera yun

        TANGA HALATANG WALA KANG ALAM

      • Anonymous

        Night, oo na. Bobo at tanga ka na. Sa tuwing magsasalita ka, ‘yan ang napapatunayan mo. Nagtatrabaho ka siguro bilang “trader” sa “PSEi.” “Trader” ampotah. Isipin mong mabuti kung anong salita dapat ah? ‘Wag ka na lang sumagot, kasi punong puno na naman ng katangahan ‘yan malamang. Ikaw na lang ang sumagot ng tanong mo. Nakaka temp sagutin ‘yang munti mong katangahan eh, pero ‘wag na lang.

      • http://pulse.yahoo.com/_Q3QGG5QHBLRMZTIYWUFURY6J2E Night

        Night talino mo….. Shinta 1 at Shinta (dalawa dalawa pa account mo, tanga kasi)………… palibhasa barado ka kung ano ano sinasabi mo at kinocorrect mo mga grammar hindi yung mga points…..

        TANGA!!

      • Anonymous

        Haha! Kung ano ano nalang sinasabi mo. Bobo ka nga talaga!

        A. Wala akong sinabing hindi sinusukat ang volume. Importante ‘yan kung investor ka. Kung mababa ang tolerance mo sa risk, iiwasan mo ang mga stocks na mataas ang volume. Ang sinasabi ko, na hindi kayang maintindihan ng utak mo, ang flow ay volume, hindi PSEi! Tanga tanga naman talaga eh. PSEi ang nag all-time high!

        B. “mataas ang demand…. not necessarily mataas ang portfolio inflows” Mataas ang demand ng stock, pero hindi mataas ang inflow? Pakinggang mo nga ang sinasabi mo! Kaya nga tumaas ang demand dahil maraming gustong bumili ng stock. Paanong hindi tataas ang inflow? Hindi man mag release ng mga bagong stocks ang isang kumpanya, tataas parin ang inflow dahil ‘yung presyo tumataas. Ang ibig sabihin mas maraming pera ang papasok. Bobo!

        C. It is highly unlikely but possible. One of the things that can increase an index amidst having a negative flow is the companies listed doing so well that the book values of the stocks increase despite the stocks being sold (which causes a negative flow).

        ‘Wag kang mag trabaho sa PSEi. Hindi naman nagtatrabaho ang mga tao sa isang index. Magtrabaho ka sa PSE. Tanga! Tanga! Tanga!

  • http://pulse.yahoo.com/_CVJ5NY7SU75AVZSAGCOAEDEIJY rayan

    PDQ  please paki close nalang itong topic na ito.  Walang Katuturan puro tanga ang laman sa topic na ito. Walang mga Breeding!!!

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