The Philippines is in the “sweet spot” of the capital market despite lingering overseas volatility, given improving market liquidity, domestic investor participation and resilient domestic economic fundamentals, capital market experts said Monday.
In a forum jointly organized by The Asset Magazine and the Financial Executives of the Philippines, capital market experts cited a favorable view for both issuers and investors although they also cited a number of challenges that must be addressed to sustain the momentum.
“We should all look at today’s scenario as very positive for the Philippines. The Philippines is back on the radar … that wasn’t the case a few years ago,” said Sanjiv Vohra, Citi Philippines chief executive officer.
Philippine Stock Exchange president Hans Sicat said it was a great time to work for the PSE at the time that the local equities market was very robust. While 95 percent of stock market investors were still institutional rather than retail investors, he said that 15 years ago, 70 percent of investors consisted of foreign players, thereby contributing to higher volatility in the market.
These days, Sicat said that local investors have started to “dominate” market volumes, similar to the time when the BRIC (Brazil-Russia-India-China) economies started becoming more interesting to foreign investors. “They (locals) were the first ones and so those from outside were piling in on the basis of strength (of domestic participation). That’s a very important fundamental building block,” Sicat said.
After implementing longer trading hours in line with regional practices, Sicat said the PSE would continue to work to attract volumes by introducing more products into the system. In particular, he said the PSE was in talks with the Securities and Exchange Commission to enhance regulations on securities borrowing and lending to put in place hedging products.