GSIS, SSS ordered to take advantage of market slump
President Duterte’s chief economic manager has ordered the country’s two state-run pension funds to buy more stocks following a slump in stock markets here and abroad.
“I have instructed the Government Service Insurance System (GSIS) and the Social Security System (SSS) to take advantage of the low stock prices as well as to support the stock market by at least doubling their daily average purchase volumes of last year,” Finance Secretary Carlos G. Dominguez III said Friday.
Dominguez chairs the Social Security Commission, the SSS’s policymaking body.
The latest data on the SSS’s website showed its investments in equities as of September last year stood at P95.7 billion or 18 percent of its P542.4-billion investment level.
In the case of the GSIS, about 20 to 25 percent of its investment portfolio were in equities.
Last Thursday, P933.35 billion in wealth was wiped out from the local stock market as investors dumped equities due to the uncertainty caused by the COVID-19 pandemic.
The main price barometer Philippine Stock Exchange index (PSEi) lost 616.99 points or 9.71 percent, closing at 5,736.27 on Thursday. The bloodbath continued on Friday.
It was the PSEi’s lowest finish since Dec. 18, 2012, while the percentage decline was the worst since Oct. 27, 2008 when the global financial crisis was on full swing.
Many listed firms are also expected to take advantage of the market plunge by buying back their own shares. Companies embark on share buyback programs when they deem their shares are undervalued by the market.
Last month, property giant Ayala Land Inc. earmarked an additional P25 billion to its ongoing stock buyback program —the biggest budget for share repurchases set by a local company in recent years.
The additional P25 billion budget was approved by the company’s directors, bringing the available balance to P26.1 billion, ALI disclosed to the Philippine Stock Exchange.
The program will be implemented through open market purchases executed via the trading facilities of the local bourse
Tycoon Andrew Tan-led property developer Megaworld Corp. has also alloted P5 billion to pick up its own shares in the bearish stock market.
Megaworld’s board approved a buyback program of up to P5 billion for a 24-month period, the company disclosed to the PSE.
“The board believes that current market prices do not reflect the true value of the company’s shares and seeks to enhance shareholder value through a share buyback program,” the company said.