Académique Documents
Professionnel Documents
Culture Documents
Philippine stock market managed to perform well despite all the bad news that came out of the US, Europe and China.
May
Jul
2011 5-yr Ave 1Q12 3.9 1.7 0.2 9.3 4.7 0.6 0.0 9.8 6.4 2.0 0.0 8.1
1Q GDP Growth Drivers Consumer Spending Government Spending Exports +6.6% +24.0% +7.9%
5.3%
20022003200420052006200720082009201020112012
0.0%
Source: BSP
Source: BPAP
2.03 2.20 2.93 3.99 6.92 9.36 19.69 28.87 30.71 64.86 66.53 123.71
Age
0 15 16 65 Above 65
% of Population
34.6% 61.1% 4.3%
Female Male
0.0
5.0
10.0
550
500
450
400 Jul-11
Source: Bloomberg
Nov-11
Mar-12
Jul-12
70 65 60 55 50 45 40
64.6
63.9 57 57.3
55.8
55.4 50.9
50.5 48.6
Source: DBM
YTD ending May Value (PhpBil) 654.6 668.4 (22.8) % Growth 11.6% 13.1% NA
Department of Budget and Management already released Php1.36 Tril or 74.9% of the 2012 National Budget as of June 30, 2012
Government expenditure set to increase by another 10.5% in 2013, with infrastructure spending up by 20.8%
Budget Legislation
1. 2. 3. 4. 5. 6. House Deliberations We are Here Senate Deliberations Bicameral Deliberations Ratification and Enrollment Veto Message Enactment
Step 1: Step 2:
Business Case/Feasibility Study Preparation Project Review & Evaluation NEDA-ICC Approval
For Publication of Invitation to Pre-Qualify & Bid Bidder Due Diligence Award of Project
Project School Infrastructure Project LRT Line 1 South Extension and Operation & Maintenance NAIA Expressway Project (Phase II) NLEX-SLEX Connector Road
Source: PPP Center, COL Estimates
Value (PhpBil)
19.69 5.52 0.45 11.90 1.80 8.00 10.15 1.80 NA 25.00 1.60 20.00 1.25 5.30 0.03 NA NA NA
112.49
Aquino Government targeting US$12Bil worth of investments in the next 5 years (vs. US$4.4Bil worth of investments from 2004-2011)
Loans to GDP
70% 60% 50% 40% 30% 20% 10% 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 May-12
Source: NSCB, BSP, COL estimates
58%
31%
Regional Investments-toGDP Ratio Country Inv-to-GDP Philippines 22% India 31% Indonesia 32% Malaysia 20% Thailand 26% Vietnam 39%
Source: Bloomberg, BSP, NSCB, COL estimates
17%
Forward PE Band
PSEi currently trading at the high end of its historical trading range
Forward PE
16.2 12.7 10.0 15.0 14.3 13.2 10.1 5.3 15.0 9.7
17.8 15.3 11.0 15.5 17.9 13.8 11.4 5.0 16.4 11.7
Total
Source: PSE
77.5
Strategy
Stay invested Fundamentals will eventually catch up with valuations Pullbacks are opportunities to buy more Philippine economy is resilient to developments overseas Share placements are only short-term drags, as proceeds enable companies to fund expansion
Rights offering Address CAR problems, to grow loan portfolio For potential acquisition and general corporate purposes To fund its expansion program including land Primary shares banking & the planned acquisition of a stake in Ortigas family's OCLP Holdings Inc. Help fund investments of up to US$1 Bil over the Treasury shares next 5 years in transport, infrastructure & power generation sectors
Secondary shares NA
There are also no signs of a bubble yet given the absence of excessive borrowings and investments.
Fundamentals should eventually catch up with expensive valuations, allowing share prices to continue going up.