Insurance exec optimistic about equity market

DESPITE the volatility of the country’s stock market, an insurance group remains bullish of the country’s equity market.
Eduardo Banaag, Philam Life head of Equity Fund Management, said the equity market is backed by stronger economic fundamentals and the expected continued growth of corporate earnings in the country.
Banaag cited the recent volatility in the market as caused by offshore investors who were trying to make fast profits spurred by higher yields on US treasuries.
“This exit of foreign funds has also resulted in a weaker peso as dollars were being brought offshore. We expect them to come back however,” he said.
Banaag said Brian Murray,  American Insurance Association head of economic research,  confirmed PhilAm’s assessment of the country’s economy to continue expanding with more international investors looking for investment opportunities here.
“Murray made these statements during the Financial Executives of the Philippines (Finex) Mid-Year Economic Briefing last July 17. He said that the Philippines has a strong engine for growth supported by good governance, high local consumer spending and low inflation rate,” he said-.
Banaag said the corporate earnings are projected to grow by 16 percent this year thus fueling more growth and making the equity market a lot stable.
Foreign Direct Investments (FDIs) are also expected to start coming in especially with the credit rating upgrades that the country received.
“We expect the PSEi to gain around 15 percent to 17 percent compared to 2012 levels which will continue to grow in 2014,” Banaag said./Reporter Aileen Garcia-Yap