The Fourth Quarter 2015 Philippine Stock Market Report

How Did Your Stock Portfolio Perform at the Year’s End?

2015 was an unfavorable year for equities.  There was not one Philippine Mutual Stock Fund with a positive return at the end of 2015.  The average loss of the group was negative 8.95% with its median at negative 6.80%.

2015 Phil Mutual Stock Funds

Notes:  Sourced from BusinessWorld Online Edition January 4, 2016.  Please click to enlarge.


Our own 2015 Investment Portfolio recommended at the start of the year was down 5.8%.  They were composed of stocks that were beneficiaries of the weak peso and companies with projects that were about to be completed or already completed.  Of the 14 stocks recommended, only SMPH (+29%), FLI (+22%), AEV (+12%), SM (+7%), RLC (+5%) and AP (+1%) generated returns.  TA ended flat at zero, while the stocks that incurred losses were PERC (-44%), PF (-36%), BEL (-35%), PCOR (-34%), AGI (-27%), VLL (-26%) and FGEN (-10%).

2015 Fund vs PSEi vs ASI

PERC had the deepest drop due to a rights offer to raise funds for its wind power generation plant.  There was less interest in PF despite its very low PE ratio and market dominance.  BEL and AGI’s gaming-based earnings were weak, PCOR was hounded by falling oil prices and there was concern that VLL’s leverage position may increase with the development of Vista City.

The investment portfolio was defensive in nature.  It generated an average cash dividend yield of 2.18% with BEL realizing the biggest cash dividend yield of 5.62% followed by AP (3.87%), FLI (3.66%), PF (2.31%) and AEV (2.11%).

The investment portfolio also had a 50% cash component.  Only 50% of the fund was invested in stocks.  The reason for which was that 2015 started out with a high PSEi PE ratio and that there was a potential US interest rate hike.  The cash component was like our bazooka to be fired when the PSEi drops due to both factors.  Well, the lowest that the PSEi PER went to in 2015 was still a high 19.43x in September, and the US interest rate hike will be done gradually or in phases in 2016.  So our bazooka was not fired yet.

The 2015 investment portfolio had a 5.8% loss at the end of 2015, but it is still worth monitoring in 2016.  It will continue to earn cash dividends.  When the bazooka is also fired, it will average down the whole portfolio.  It will generate favorable returns as the new stock components will be acquired at lower share prices.  The timing of which is essential and preferably at the bottom level of the PSEi in 2016 say 17.50x PER or so.

2016 is an important year.  It is when the Philippines will have a new president, oil prices will continue to be weak with abundant global supply and interest rates seen rising.


The Philippine Stock Market Research report is solely for information. It should not be constituted as an offer for solicitation for the purchase or sale of securities mentioned. The information herein has been obtained from sources believed to be reliable. Whilst every effort has been made to ensure accuracy, we do not guarantee the accuracy or completeness of the report. All opinions and estimates expressed herein constitute our judgment as of this date made on a reasonable basis and are subject to change without notice. No liability can be expected for any loss arising from the use of this report or its contents. As this is general information, it does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may obtain this report.