GSIS earns P16.5B from market placements

By Honey Madrilejos-Reyes
Reporter

STATE-OWNED pension fund Government Service Insurance System (GSIS) has earned P16.5 billion from its investments in the capital markets as of end-October this year, a five-fold surge from the P2.4 billion made in the same 2005 period.
           
The fund said it benefited significantly from an aggressive approach to placements in the Philippine capital market.
           
GSIS said in a report that P6.1 billion has been realized from investments in stocks and bonds, compared to P4-billion booked last year. Income from equities trading grew 131 percent to P2 billion from P864.2 million in the same period, while gains from investments in Philippine bonds and notes increased by 32 percent to P4.1 billion from P3.1 billion last year.
           
Former Philippine Stock Exchange chairman Vivian Yuchengco said, "The GSIS is primarily responsible for the bullish investor sentiment on the market with its steadfast commitment to invest in the bourse particularly on blue chip companies."
           
Buoyed by support from foreign investors, the stock market is currently on a bull run. On Wednesday, the Philippine Stock Exchange index rose to a new nine-year high, adding 29.82 points, or 1.1 percent, closing at 2,855.23.
           
In a statement, GSIS president and general manager Winston F. Garcia said their support to the capital markets has paid off, capped by the sale of its shares in Equitable PCI Bank Inc. (EPCIB) at P92 per share, a price market pundits previously deemed impossible.
           
The GSIS and the Sy-controlled SM Investment Corp. recently signed an agreement covering the sale of the pension fund's 13-percent stake in EPCIB with an approximate value of P9 billion. The sale involves more than 95 million common shares at P92 per share.
           
Garcia earlier said the offer vindicated GSIS, which has pursued the transaction at P92 per share.
           
The GSIS chief also stressed the importance of supporting the stock market, being one of the key indicators of the Philippine economic growth.
           
"As a government financial institution, GSIS has realized the need to take the lead in continuing to invest in the stock market as one of the cornerstones of a sustained capital market growth," he said.
           
Of GSIS's P150-billion investible funds, approximately P30 billion are in the stocks, normally in a portfolio involving blue chip companies like San Miguel Corp. and Philippine Long Distance Telephone Co., among others.

Business Mirror
November 23, 2006