MANILA – The Philippine stock exchange (PSE) ended 2014 on a positive note, up by around 25 percent year-to-date.
April Lee Tan, vice president and head of research in COL Financial, said the PSE reached several milestones in 2014, including an increased number of initial public offerings (IPO).
“These are the names that people know about, successful IPOs include Century Tuna and SSI. Small investors could have participated through the local small investor program and they would’ve made a lot of money, and I think one of the blockbuster IPOs for the year is DoubleDragon,” Tan told ANC’s “On The Money.”
DoubleDragon is the property company owned by Jollibee founder Tony Tan Caktiong and Mang Inasal founder Edgar "Injap" Sia, while SSI Group is a specialty retailer that resells 103 international brands such as Hermès, Prada and Gucci in the Philippines.
“For the stock market, 2014 was a good year despite the fact that during the start, a lot of people were worried about it, we’re very cautious,” Tan said.
However, she noted that despite the increase in the stock market, not many Filipinos participated.
In 2013, Tan said around 500,000 Filipinos invested in the stock market. She that while the number may have gone up in 2014, it did not increase significantly.
She said value turnover in the PSE is down 20 percent, and sales of mutual fund companies are down 90 percent compared to last year.
According to financial adviser Salve Duplito, the market’s volatility in 2014 may have put off potential investors and made them cautious.
Tan, meanwhile, said investors’ mindset of looking at the stock market like a casino, and banking on the “get rich quick” scheme should be changed.
She said investors should also be taught to only invest a portion of their money.
“Studies have shown that the stock market outperforms other asset classes in the long run. So if you’re going to put your money there, you better make sure it’s long term money so that you can ride the volatility,” she said.
For 2015, Tan expects the market to move sideways despite all the foreseen risks.
“I say this is because liquidity is still so much there. There aren’t a lot of alternative investments,” she said, noting that interest rates did not go up as high as expected.
She said the PSE index may go up by 5 to 10 percent, and close at 7,000-8,000. Investors may earn cash dividends up to 2 to 3 percent per annum.
More investors are also seen to get into the foreign exchange market in 2015, according to Temie Lanaria, executive vice president of Metisetrade.
“More and more people are getting into the foreign exchange market as more people are getting more sophisticated. Most of the people now are into researching those companies that are offering alternative investments before they get into the investment,” he said.
Lanaria said more investors will look into forex as a popular alternative investment “because of its cheapest transaction costs and being the most transparent market in the world.”