2015 Outlook, part 4

By Randell Tiongson on January 13th, 2015

Many foreigners have been positively interested in the Philippine performance and of them is a Dutch who runs one of the country’s largest insurance company, AXA Philippines. Rien Hermans is a Dutch national but you can say that he has a good insight on the inner workings of this country with his many years working here. AXA is the world’s largest insurer and their local subsidiary in the Philippines is a joint venture with Metrobank.

 

The 2015 Outlook of Rien Hermans

In 2015 the markets will strongly be influenced by a strengthened dollar, the lower cost of oil and the low interest rates. On top of that we will see a strong influence on the index of the coming elections, especially in the last months of 2015. As share prices reflect the net present value of future expected profits of the companies, it is understandable that the political climate is a very important factor in determining the right price of a stock.

So with a stronger dollar improving the attractiveness of the BPO industry, inflation remaining in control supported by the lower oil prices and interest rates returning to the very low levels of the past two years, equities remain the most attractive asset class and I maintain my expectation that the PSEi will continue its path towards 10,000 before 2020. For this year I do predict that the index will move up and I would have expected the PSEi to hit between 7,800 and 8,000 by year-end. The big unknown however is how the candidates for the presidency will execute their strategies and how this will influence the business sentiment, which can have an effect of 500 points up or down in my opinion.

In my opinion the best strategy therefor is to diversify both in sectors as well as in markets. Overweight in equity compared to bonds, overweight in dollars compared to peso and balancing the investments in high growth markets like the Philippines with more mature markets like Europe and the United States. My medium term view would be an overweight in Europe as I believe that we will see mergers and acquisitions increasing there, followed by a recovery of the economies.

 

rien-hermans-ceo-axa-phils-580x333Convinced of the value that financial products deliver to customers Rien has spent over 2 decades  in the financial service industry in the fields of product development, distribution, marketing, strategy and general management.  

In 1990 he started with ING Bank in the Netherlands, where he was responsible for developing and implementing Life insurance as a new product group offered by the bank. His analytical skills and strategic vision were recognized and for 4 years he was vice president Strategy & Planning advising the Board of ING on strategic issues.

In 1999 he moved to Asia and after a short stint in Hong Kong he was assigned as the CEO of ING Life as well as CEO of Aetna Life & Healthcare in the Philippines, Executive Director and General Manager of ING Malaysia and the last position he held in ING was Board Member of ING Financial Services Poland.

In 2009 Rien ‘crossed the line’ and joined AXA with the assignment to transform AXA Philippines into a strong player on the domestic market with a sustainable position in the top 5. Focused to be the best in the eyes of the customers the company has strengthened its position in the growing life insurance and investment market in the Philippines.   

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2015 Outlook, part 4