Investment company stresses healthy mix of stocks portfolio

A HEALTHY mix of several sectors make up First Metro Securities’ new model portfolio, which includes companies in telecommunications, utilities, consumer goods, industrials and financials.

The company hosted a forum on ideas on stock selection techniques to maximize opportunities Wednesday.

Research analyst Ghia Yuson, who presented the stock brokerage firm’s model portfolio to clients, said they used a “thematic approach” in rebalancing the portfolio, taking into account global market themes such as the uncertainty over Europe’s economy.

She said they used the barbel strategy, combining both defensive and cyclical stocks in their portfolio.

Under the defensive plays, she named Universal Robina Corp., Globe Telecom, Philippine Long Distance Telephone, Aboitiz Power, Manila Water and Metro Pacific Investments.

Their cyclical picks include Metropolitan Bank and Trust, Security Bank Corp., Alliance Global Group, Ayala Corp., EEI Corp. and International Container Terminal.

Core portfolio

Yuson said that for those investors who do not want to be monitoring 12 stocks, they prepared a core portfolio consisting of Universal Robina, Metrobank, Ayala Corp., Globe Telecom, Manila Water and EEI Corp. She added that investors can also change the companies in the core portfolio if they prefer to invest in something else.

Asked why the portfolio did not include property stock, Yuson said that when they started rebalancing the portfolio, there existed worries about a real estate bubble.

Although this has dwindled, she said the portfolio has direct exposure to proper stock through Ayala Corp.

She assured they will continue to do more research and talk to industry experts and could include it in the next rebalancing.

As for mining, research head Reuben Mark Angeles admitted the sector “went out of fashion” by the middle of the year due to a drop in prices of copper and metals and the issuance of an executive order in mining. He said it could become “fashionable” again next year when demand for these rises.

First Metro Asset Management Inc. president Augusto Cosio Jr. added that a big steel factory in China also stopped production, which led to a drop in the demand for iron ore.

Cosio, who gave the presentation on the economic outlook, said the local capital markets are developing at a faster pace while risk is at its lowest level in years.

He said capital markets in Asia are becoming more cohesive, as difficulties in the Western Hemisphere have moved the global economic centers to Asia.

“The Philippines and (Southeast Asia) are creating wealth faster than any other region. The Philippine capital market is benefitting,” he said. Cosio suggested to clients to participate in market stocks and bonds.

He believes the demand for Philippine financial markets can go higher, with the country’s debt at a low level and bank lending having big room to grow.

“The general idea is our financial markets have a lot of room to grow from domestic and foreign sources,” he said.

Perfect storm

In closing the forum, First Metro Investments Corp. president, Jojo Dispo called the global and local situation “a perfect storm” for the Philippines.

“We are very bullish on the Philippines. Macroeconomics is cooperating with the global situation outside,” he said.

He said the country’s first half growth of 6.1 percent was already a plus and the fourth highest in the world while a steady growth of talent to run the economy continues while other populations begin to dwindle. Dispo also noted the country’s estimated $840 billion worth in mineral deposits and a government that is strong in its stance against corruption as other positive qualities.