As Philippine stocks tumbled to a one-year low on Thursday, some of the nation’s biggest money managers put cash to work, betting against the relentless sell-off led by foreign investors that has wiped out more than US$30 billion in market value in about three months.
Fund managers at the Bank of the Philippine Islands and Rizal Commercial Banking Corp added to holdings of domestic stocks as the Philippine Stock Exchange Index (PSEi) pushed its loss for the year to more than 10 percent, the world’s worst performer.
While conceding that the country’s rising inflation might not have peaked yet, the managers expect it to moderate later in the year and remain within the central bank’s target.
“It’s a once-in-a-lifetime opportunity,” said Erwin Balita, who bought stocks in the benchmark index for the funds he manages at Bank of the Philippine Islands, the nation’s second-biggest money manager. “The Philippines continues to be a growth story. Unless that changes we will not take money off the table.”
Stocks fell on Thursday as oil’s rise to the highest level since 2014 rattled a market hounded by rising inflation, Asia’s worst-performing currency and lingering concerns that the central bank is out of step for holding off an inevitable interest rate increase.
The PSEi closed at 7,682.24, with its valuation sinking to as low as 16 times estimated 12-month forward earnings, the lowest since December 2016. The gauge rose as much 0.8 percent yesterday.
Rizal Commercial Banking trader Steven Ko said he used the latest drop to add shares of conglomerates and property developers that he abstained from at the start of the year because of expensive valuations.
Balita favors conglomerates, banks and property, he said.
Overseas investors on Thursday sold a net US$51 million, the most in four weeks and bringing total withdrawals to more than US$860 million since the PSEi’s record high on Jan. 29.
The benchmark’s 15 percent slide in that span is one of the worst sell-offs Ko has seen.
“It’s a good time to cover our underweight positions,” said Ko, who pegs the market’s support at 7,350 to 7,500. “We could be near bottom as it seems that foreign investors who want out are close to completing their exit.”
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