FILIPINOS have been identified as Asia’s most optimistic investors for the third consecutive time in a quarterly survey, with investors in the country also found keener on far-off markets compared to peers in the region.
“Philippine investors remain optimistic about investing at home with the sentiment index for domestic investment at 59, the highest in Asia,” Canada-based Manulife Financial Corp. said in a statement on the second-quarter edition of its Manulife Investor Sentiment Index (MISI).
The second-quarter reading for the Philippines rose a notch from 58 in the first quarter. The Philippines had shared the top spot with Malaysia then, after also enjoying the solo top spot in the fourth quarter of 2013 -- the country’s debut in the survey.
In the latest survey, Indonesian investors came next to Filipinos in optimism, recording a sentiment index of 57. Malaysians followed with 48.
Singaporeans’ optimism registered at 15; the Japanese followed with 14; while Chinese optimism was at 11.
There was least optimism in Taiwan and Hong Kong, with the readings for investors from the two markets coming in at -1 and -10, respectively.
Filipino investors’ optimism “was spread across all asset classes in the survey, which all saw increases except cash,” Manulife said.
Property has taken the lead as the most favored asset class, Manulife said.
Sentiment for home property “[was] highest at 75, up one in the quarter, while investment property rose by four points to 74,” the insurer noted, adding that “fixed income saw the biggest increase, up five points to 50.”
Sentiment on stocks also went up by four to 45, while those for mutual funds rose one point to 36.
Manulife noted that “[c]ash was the only asset class to see a decline, down nine 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,” Manulife Philippines Chief Investment Officer Aira Gaspar said in the statement.
Philippine economic growth decelerated to 5.7% in the first quarter of this year. The first quarter GDP growth rate was the first time in nine quarters it fell below 6%, and was slower than the 7.7% and 6.3% pace recorded in the first and fourth quarters, respectively, of 2013.
“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,” Manulife said.
On May 8, Standard & Poor’s upgraded the country’s credit score a notch further into investment grade -- the country’s best showing so far. S&P raised its rating of the Philippines to BBB with a stable outlook, from the BBB-, also with a stable outlook, issued a year ago.
LESS HOME MARKET BIAS
Manulife noted, though: “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,” reported the insurer.
Manulife added that Philippines investors are also most optimistic about Japan and Canada when it comes to growth, “with 19% believing that Japan’s economy will be the fastest growing in the next two years, followed by Canada, China and Australia.”
CONTRASTING
“This contrasts markedly with the average Asia investor, 27% of whom expect China’s economy to grow fastest, followed by much lower expectations for Japan, Australia and Canada.”
“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% on strong consumer demand ahead of the implementation of a new goods and services tax,” Ms. Gaspar said.
Manulife said the MISI is based on interviews with 500 respondents each in Hong Kong, China, Taiwan, Japan and Singapore; in Malaysia, Indonesia, and the Philippines, the interviews are conducted face-to-face.
Respondents were described as middle class to affluent investors, at least 25 years old, are the primary decision maker of financial matters in their household, and currently have investment products.
source: Businessworld
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