Equities Market

Presented by:
Maria Cristina Gabaldon, CFA
Equities Portfolio Management Head
 A very volatile 2015

As of 12/11/2023 2
 Global market returns mixed
FY 2015 Market Returns (in Local Currency)

Data as of 12/31/2015 Source: Bloomberg 3

A general depreciation against USD
Global Currency Returns (FY 2015)

Source: Bloomberg
Data as of 12/31/2015 4
Persistent foreign selling
Foreigners have turned net sellers since April

Source: Bloomberg 5
 Liquidity drying up

Domestic investors were supporting the market and accounted for 50% of value
traded in 2015 compared to 55% and 51% in 2013 and 2014 respectively
Source: Bloomberg 6
 Valuations have gone down

2016E PE has gone down at 14.6x is now about 8% lower than the 5Y mean PE of 17x

Source: Bloomberg
Data as of 1/13/2016 7
 Selloff still persists
YTD market performance
Stock Exchange of Thailand -0.73%
Jakarta Composite -1.22%
Korea Stock Exchange -2.30%
Bursa Malaysia -2.95%
FTSE 100 (UK) -4.51%
India Sensex -4.84%
CAC 40 (France) -5.29%
ASX 200 (Aus) -5.82%
Euro Stoxx -5.95%
IBEX 35 (Spain) -6.39%
Straits Times (SG) -6.46%
PSEi -6.59%
Nikkei 225 (Japan) -6.92%
German Stock Index -7.28%
Dow Jones -7.31%
S&P 500 -7.52%
Hang Seng (HK) -9.03%
Nasdaq -9.61%
Shanghai Composite -16.66%

-18.0% -16.0% -14.0% -12.0% -10.0% -8.0% -6.0% -4.0% -2.0% 0.0%

As of 1/13/2016 Source: Bloomberg 8

 2015 drag drivers
INTERNAL DRAGS:
• Disappointing GDP growth
• Slowing corporate earnings

EXTERNAL DRAGS:
• Peso depreciation
• Fed liftoff
• Oil price slump
• China slowdown and growth concerns

As of 12/11/2023 9
 On China
On China slowdown—PH relatively insulated

Credit Suisse characterizes the Philippines in the “safe quadrant”, where it has relatively
lower exports to China and has monetary and fiscal space to ease due to benign inflation
and manageable fiscal deficit
Source: Bloomberg, Credit Suisse 10
 On the Fed

Fed dot plots in December show a flatter/lower rate than September

Source: Business Insider 11
 On the Fed
Market is pricing in a March hike at 41%

12
Source: Bloomberg
 On the Fed
BSP monetary policy still accommodative
Benign inflation High domestic liquidity

Ample foreign reserves USD flows from OFWs and BPOs still robust

As of 12/11/2023 13
Source: Bloomberg
 On the oil price slump

The Philippines is a beneficiary of lower oil prices since it is a net importer of oil.
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 Market Drivers

Tailwinds:
• Corporate earnings growth of 10% in 2016
• Stronger-than-expected GDP growth
• Credible presidential elections
• Consumption boost from low oil prices/inflation

Headwinds:
• More aggressive Fed rate hikes
• Capital flight on USD strength
• China slowdown continuing
• Deflation in developed markets
• Geopolitical risks

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Portfolio Composition
and Strategy
 Preferred Sectors
Power Sector
• New capacity additions
should boost earnings of
IPPs
• Stable recurring cash flows
• Defensive sector
Property Sector
• Recurring income to
reduce inherent cyclicality
of slowing residential
segment
• Play on BPO sector (on
office rental space)
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 General Fund Strategy
 Play with high beta names
 Focus on the following companies:
 Defensive
 Stable recurring cash flow
 High dividend yield
 Capacity expansions in the pipeline
 Philippine Equity Fund
Inception Date: April 5, 2000 Fund Size: P15.82 billion
Benchmark: 95% PSEi + 5% 30-day SSA Data as of: Dec 31, 2015

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 Disclaimer
Sun Life of Canada (Philippines), Inc. (SLOCPI), Sun Life Grepa
Financial, Inc. (SLGFI), Sun Life Asset Management Company
(SLAMC), and Grepalife Asset Management Corp. (GAMC) make no
representation as to the accuracy or completeness of the information
in this presentation. The information contained herein is subject to
change without notice and should not be considered as a
recommendation to hold, purchase, or sell shares, securities or other
instruments. Important information about Sun Life Financial products
may be obtained from Sun Life Financial Advisors or Sun Life Mutual
Fund Distributors. Past performance is not indicative of future
performance. Invest wisely.

As of 12/11/2023 20