The largest Philippine money manager has been buying shares as record foreign outflows drive the country’s benchmark stock index toward its biggest monthly loss this year.

Biggest Philippine Fund Manager Buying Shares as Foreigners Sell

Frederico Ocampo, who became chief investment officer at Manila-based BDO Unibank Inc. (BDO) last month, said he sees the 2.1 percent decline in the benchmark Philippine Stock Exchange Index (PCOMP) this month through yesterday as an opportunity to buy shares of banks, real estate, gaming and power companies. The gauge rallied 1.1 percent today, extending gains after his comments.

“We always say buy on dips and this is it,” said Ocampo, 47. “It’s a trading window that we as fund managers have to maximize. We remain bullish for 2015 as a resilient economy and robust corporate earnings growth will support the equities market.”

Accelerating economic expansion and corporate profits forecast to grow at least 13 percent next year will propel the benchmark gauge to as high as 8,000 in 2015, Ocampo said. That’s a 12 percent advance from today’s close.

The Philippine equity market is overvalued and doesn’t offer opportunities to investors, HSBC Global Asset Management said in a statement today. While the country’s long-term growth outlook supports part of its premium valuation, infrastructure remains inadequate to support its growing population and economy, it said.

Valuation ‘Justified’

Foreign funds have sold a net $553 million of the nation’s stocks, the largest outflow based on data compiled by Bloomberg going back to 1999. Even Ocampo says the Philippine stock gauge may be little changed through year-end, before resuming its advance in 2015.

The benchmark index is valued at 17.9 times projected 12-month earnings, the most in Asia Pacific, according to data compiled by Bloomberg.

“The expensive valuation is justified, especially at a time when investors are looking for growth,” Ocampo said.

The Philippine economy will grow 6.5 percent to 7.5 percent this year, accelerating to between 7 percent and 8 percent in 2015, according to government forecasts.

Ocampo said BDO added to holdings in banks, property, gaming and power generators, while cutting mining and telecom companies. Power generators will benefit from anticipated electricity shortages next year, while gaming stocks will lure investors as casinos open in Manila’s Entertainment City, he said.