First Metro Investments Corp., the investment banking unit of Metrobank Group, plans to conduct a P1-billion follow-on offering of its equity exchange traded fund next year.
First Metro chairman Francisco Sebastian said in a news briefing the company also planned to launch a second ETF next year that would track a new set of stocks.
ETFs are exchange-listed products that mirror indexes, commodities, bonds and currencies and allow investors to buy and sell them like stocks.
It allows investors to diversify their portfolio by buying a single product that represents a wide range of securities underlying an index.
First Metro launched First Metro Philippine Equity Exchange Traded Fund in 2013 to track the movement of the 30-company Philippine Stock Exchange index.
“The follow-on offering will probably be finalized within the next four weeks and probably early next year will be a good time to do it. We’re also watching the index. We’ve seen the index at 8,100. We will time it so that it’s probably at least well below 7,000. [It] will be a good time to get into the market for a long-term play,” Sebastian said.
“We encourage investors to stay in the market because the long-term fundamentals of this market are just very positive,” he said.
Philippine Stock Exchange president Hans Sicat also expressed confidence about the prospects of ETFs in the country.
“ETF is the fastest growing asset class. Global ETFs are over $3 trillion globally. It tells you that we have here in the Philippines is really just the start and with more education and more familiarity that probably should increase in terms of not just absolute size but hopefully as proportion,” Sicat said.