The local equity market’s recent slump should be taken as a signal for investors to hunt for cheap buys, the head of the Philippine Stock Exchange (PSE) said.
The country’s strong macroeconomic fundamentals, PSE president Hans Sicat said, only pointed to the continued strength of local shares in the coming months.
“The better way to look at it is that trading volumes and values are still robust. That’s our real benchmark,” Sicat said at the sidelines of the Chamber of Thrift Banks (CTB) general membership meeting Friday.
In a speech delivered at the event, Sicat said trading volumes in the local bourse have averaged P11.6 billion a day, or double the average 15 to 18 months ago.
He said this showed that investors were not leaving the country as a result of risk aversion. “It’s just that people have different views on the market,” Sicat said. “The Philippines has displayed the best macroeconomic indicators in the last three decades.”
He added that the recent pessimism by investors was an “extreme overreaction” to fears that the United States Federal Reserve might scale back its support for the American economy.
The benchmark PSEi has lost about a tenth of its value since the third week of May, although the index rose 1.4 percent yesterday amid bargain-hunting.
Sicat noted that the country’s global competitiveness ranking has climbed consistently since the start of the Aquino administration. Inflation has also remained steady despite record-growth numbers for the Philippine economy.
The Philippine economy expanded by 7.8 percent in the first quarter of 2013, making the country Asia’s fastest-growing market.
He said many foreign funds that have “never spent a penny” in the Philippines were now taking note of local stocks.
“It’s been great receiving people from around the world in my office rather than me flying out to New York or London,” Sicat said.