PH now more attractive to foreign investors

By Kathleen A. Martin,

Posted at Feb 05 2013 04:46 PM | Updated as of Feb 07 2013 12:51 AM

MANILA, Philippines - More foreign firms are now constantly keeping tabs on Philippine firms amid the country's strong macroeconomic conditions, the investment banking arm of India's Religare Enterprises Ltd. said on Tuesday.

"Everytime you talk about the Philippines, there's only always some 10 companies interested [in it]. But now, every investor is looking at the Philippines," John Sturmey, managing director at Religare Capital Markets (Hong Kong) Limited, said in a briefing in Makati.

"Basically, it has the best macroeconomic story in the region right now... [and] the macro story is seen sustainable and there is a lot of liquidity," he added.

The Philippine economy expanded by a faster-than-expected 6.6% in 2012, breaching government's target and surprising markets.

Sturmey further said there is a "good chance" the local bourse may rise 20% to 30% again this year, riding on the bullishness of the Philippine economy.

And in order to take advantage of the Philippine growth story, Religare Capital Markets is set to open a unit in the country in the next six months after recently getting a regulatory approval to do so from the Securities and Exchange Commission.

"We see the Philippines as a huge opportunity," Sutha Kandiah, managing director and head of investment banking at Religare Capital Markets Corporate Finance Pte. Ltd. in Singapore, said in the same briefing.

"The current regime is doing a phenomenal job getting Philippines' corruption level addressed, inflation is coming down, economic growth being delivered is between 6% to 7%, the external and deficit levels have been addressed and the policies are fantastic," Kandiah continued.

Kandiah also pointed out the country is "on the verge" of getting its first investment grade rating amid the robust economy.

The Philippine unit, which will be selling securities to interested foreign investors, is expected to focus on 20 to 25 Philippine Stock Exchange-listed companies by next year from the current five firms Religare Capital Markets is dealing with right now.

"We're looking at a lot of real estate companies at the moment," Kandiah said.

Despite the rosy picture painted about the Philippine economy, Kandiah noted the 2016 presidential elections may bring uncertainty to domestic markets.

"The elections this year is a non-event... but as we get closer to the presidential elections, the transition will be a trigger event that we have to keep an eye on," Kandiah said.

Religare Capital Markets' Philippine unit will deal mainly with equity capital markets business and M&A (mergers and acquisitions) advisory, Sturmey said.

He added the local unit will not be dealing with the fixed income business.