Philippines investors look far and wide for opportunities, but stay close to home for investment and advice – Manulife Survey
- Philippines investors favor developed economies over emerging Asia and show least home-market bias of any investors in Asia
- Personal networks, bricks and mortar dominate approach to investing
- Philippines investors remain most optimistic in Asia
Investors in the Philippines are
among Asia's most optimistic and most outward-looking, given their willingness
to invest outside the Philippines to gain returns, according to the latest
Manulife Investor Sentiment Index* covering the second quarter of 2014.
Philippines investors reach across emerging
Asia to mature markets
When
asked which region they think is best to invest in, Philippines investors point
to developed Asia, Australasia and North America over emerging markets,
including emerging Asia and the Middle East and North Africa.
Philippines investors favour developed and
distant markets over China and emerging Asia
Philippines investors seem less affected by
home-market bias than any other investors in the survey. Given a selection of
single markets, they show most enthusiasm for Canada (76 points) and Japan (73)
above the Philippines itself (51), and show least for China (44), which most
other Asia investors rank relatively higher.
When it comes to growth, Philippines
investors are also most optimistic about Japan and Canada, with 19 percent
believing that Japan’s economy will be the fastest growing in the next two
years, followed by Canada, China and Australia. This contrasts markedly with
the average Asia investor, 27 percent of whom expect China’s economy to grow
fastest, followed by much lower expectations for Japan Australia and Canada.
Philippines investors’ views of which
markets will grow fastest
contrasted
markedly with investors elsewhere in Asia
"Our research suggests that
Philippines investors’ preference for Japan is likely related to Japan’s first
quarter GDP growth which came in at 6.7 percent on strong consumer demand ahead
of the implementation of a new goods and services tax," said Aira Gaspar,
CFA, Chief Investment Officer of Manulife Philippines.
“It's also interesting that Philippines
investors seem so keen on Canada. We think there is a sound basis for this
given that Canadian equities outperformed their developed market peers in the
first quarter."
Philippines investors rely on friendly
advice, ‘bricks and mortar’ approach to portfolios.
Despite their international outlook,
Philippines investors place their faith closer to home when it comes to making
investment decisions, with 88 percent relying on or referring to family,
friends or colleagues as a source of advice – the highest level in the region
and well above the regional average of 58 percent. They are less dependent on
industry staff, mass media or online sources of investment advice.
Philippines investors also have a very
‘bricks and mortar’ approach to portfolio composition, with 61 percent saying they
own investment property (against the Asian average of 19 percent) and 75
percent owning their own home (against an Asian average of 50 percent). Cash
and property together make up the bulk of their portfolios. Conversely, they
have much lower ownership of stocks (15 percent versus the Asian average of 48
percent) and mutual funds (6 percent versus 23 percent) – even though their
sentiment towards equities is the highest in Asia.
“Philippines investors rely largely on
their own networks for their investment decisions" said Ryan Charland, CEO
of Manulife Philippines. "While it is comforting to speak with family and
friends for investment advice, investors would benefit from consulting
investment professionals, who could help them build a sound and diversified
portfolio that meets their medium to long-term financial goals.”
Philippines investors are Asia's most
optimistic
In addition to their positive views about
investing overseas, Philippines investors remain optimistic about investing at
home with the sentiment index for domestic investment at 59, the highest in
Asia. This optimism was spread across all asset classes in the survey, which
all saw increases except cash. Fixed income saw the biggest increase, up 5
points to 50; followed by stocks, up 4 to 45. Mutual funds rose 1 point to 36.
Property has taken the lead as the most favored asset class, with home property
highest at 75, up 1 in the quarter, while investment property rose by 4 points
to 74. Cash was the only asset class to see a decline, down 9 to 73, but still
remains high.
”Filipino respondents were generally
upbeat, despite weaker-than-expected first quarter 2014 GDP growth and
uninspiring corporate earnings for the same period,” confirmed Ms. Gaspar. “We
believe sentiment was boosted by a credit rating upgrade from Standard &
Poor’s and an increase in government spending on much-needed infrastructure
projects. The country’s resilient private consumption, rising investment cycle,
recovering manufacturing industry and favorable consumer and business
confidence bode well for economic activity and a positive earnings growth
story. However, investors’ sentiment could turn sour if policy reforms aimed at
addressing infrastructure deficiencies and fostering inclusive economic growth
stall.”
For more findings and related information
from the Manulife Investor Sentiment Index in Asia, please visit www.manulife-asia.com.
*About Manulife Investor Sentiment Index in
Asia
Manulife’s Investor Sentiment Index in Asia
is a quarterly, proprietary survey measuring and tracking investors’ views
across eight markets in the region on their attitudes towards key asset classes
and related issues. The Index is calculated as a net score (% of “Very good
time” and “Good time” minus % of “Bad time” and “Very bad time”) for each asset
class. The overall index is calculated as an average of the index figures of
asset classes. A positive number means a positive sentiment, zero means a
neutral sentiment, and a negative number means negative sentiment.
The Manulife ISI is based on 500 online
interviews in each market of Hong Kong, China, Taiwan, Japan, and Singapore; in
Malaysia, Indonesia and the Philippines it is conducted face-to-face.
Respondents are middle class to affluent investors, aged 25 years and above who
are the primary decision maker of financial matters in the household and
currently have investment products.
The Manulife ISI is a long-established
research series in North America. The Manulife ISI has been measuring investor
sentiment in Canada for the past 15 years, and extended this to its John
Hancock operation in the U.S. in 2011. Asset classes taken into Manulife ISI
Asia calculations are stocks/equities, real estate (primary residence and other
investment properties), mutual funds/unit trusts, fixed income investment and
cash.
About Manulife
Manulife is a leading Canada-based
financial services group with principal operations in Asia, Canada and the
United States. Clients look to Manulife for strong, reliable, trustworthy and
forward-thinking solutions for their most significant financial decisions. Our
international network of employees, agents and distribution partners offers
financial protection and wealth management products and services to millions of
clients. We also provide asset management services to institutional customers.
Funds under management by Manulife and its subsidiaries were approximately
C$637 billion (US$597 billion) as at June 30, 2014. Our group of companies
operates as Manulife in Canada and Asia and primarily as John Hancock in the
United States.
Manulife Financial Corporation trades as
‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife Financial
can be found on the Internet at manulife.com.
About Manulife Asset Management
Manulife Asset Management is the global
asset management arm of Manulife, providing comprehensive asset management
solutions for institutional investors and investment funds in key markets
around the world. This investment expertise extends across a broad range of
public and private asset classes, as well as asset allocation solutions. As at
June 30, 2014, assets under management for Manulife Asset Management were
approximately C$300 billion (US$281 billion).
Manulife Asset Management’s public markets
units have investment expertise across a broad range of asset classes including
public equity and fixed income, and asset allocation strategies. Offices with full investment capabilities are
located in the United States, Canada, the United Kingdom, Japan, Hong Kong,
Singapore, Taiwan, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines.
In addition, Manulife Asset Management has a joint venture asset management
business in China, Manulife TEDA. The public markets units of Manulife Asset
Management also provide investment management services to affiliates' retail
clients through product offerings of Manulife and John Hancock. John Hancock
Asset Management and Declaration Management and Research are units of Manulife
Asset Management.
Additional
information about Manulife Asset Management may be found at ManulifeAM.com
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