CASH-RICH GSIS PLANS P20-BILLION INDEX FUND
MANILA, APRIL 16, 2007 (STAR) By Zinnia B. Dela Peña - Awash with cash from a string of stock divestments, the Government Service Insurance System (GSIS) is planning to put up a P15-billion to P20-billion index fund patterned after the Standard and Poor’s 500 stock index
GSIS president and general manager Winston Garcia said the fund aims to track the Philippine Stock Exchange (PSE) index with the objective of duplicating the general performance of the market in which it invests.
Garcia said the fund which he hopes to put in place within six months or one year, will be invested in the 30 companies comprising the PSE index. The fund will be unitized and eventually sold to the public, Garcia said.
Aside from this, GSIS is allotting $1 billion for offshore investments in line with efforts to achieve greater capital gains.
Garcia said the fund is planning to hire two global asset managers, with funds under management of at least $100 million each, to manage its overseas portfolio.
"Our target is to invest some 25 percent to 35 percent abroad of the P280 billion fund that is ready for investment. We want our investments to be spread across the globe," Garcia said.
The GSIS is also considering dabbling in the booming real estate market, fueled by the robust remittances from overseas Filipino workers (OFWs) and the low interest environment.
Joseph Andres, who handles the disposition of properties at GSIS, said the agency has received offers from various parties for its properties in Quezon City, Ortigas and Makati.
Andres said the Ortigas property which was formerly the headquarters of the MMDA, will be developed similar to Home Depot which provides products and services for home improvement.
The GSIS also owns the Philcomcen property in Ortigas Avenue which Robinsons Land Corp. was planning to acquire.
The Philcomcen property, on the other hand, has been condemned for many years now. It served as the office building for several government agencies such as the Department of Transportation and Communication, the Presidential Commission on Good Government and several radio stations.
Andres said the three-hectare property in Quezon City may be converted into retail or commercial use.
Philcomcen is one of the 200 establishments that owe GSIS a total of P10 billion in unpaid loans. Other companies with outstanding overdue loans include Puerto Azul, A. Francisco Realty, The Manila Hotel, Pinugay Property, Kanlaon Towers, Phimeco Property, Meno Property, Mecamir Realty, Philippine Village Hotel, Serenity Memorial Park, Felipe Ang and Emir Corp.
The GSIS earned P9.7 billion in trading gains from the sale of P25 billion worth of stocks over the last three weeks. Of this amount, the state-run pension fund realized P5.7 billion in net gains, Garcia said.
Just last Friday, GSIS sold its six percent stake in food and beverage giant San Miguel Corp. (SMC) for around P14 billion. A total of 199.35 million shares in San Miguel were sold at P71.50 each share, a 10 percent premium to the prevailing market price of P65 per share. The transaction, crossed through the PSE, was handled by the Philippine Equity Partners Inc.
"This is the loudest and strongest statement of confidence in the Philippine economy under the Arroyo Administration. There is so much liquidity in the market and interest going into our country. We just wanted to cash in on our profits and take advantage of the market’s continued upswing,"Garcia said.
By the end of the year, GSIS hopes to realize P15 billion in trading gains from the stock market.
Garcia said the fund will continue to reinvest in the stock market and has tapped Metropolitan Bank and Trust Co., Bank of the Philippine Islands and Banco De Oro Universal Bank to manage P6 billion for a period of three years starting this year.
GSIS, one of the biggest investors in the Philippines with more than P400 billion in assets, is eyeing a net income of P44 billion this year compared with P40 billion in 2005.
Chief News Editor: Sol Jose Vanzi
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