We look at 2009–2019 data of the top 20 companies based on market capitalization in the Philippines and evaluate if placing money in the largecaps for the longterm makes sense.
Top 20 companies based on market capitalization as of August 28 2019:
- SM Investments 1.2 Tril
- SM Prime Holdings Inc. 1 Tril
- Ayala Land 700 B
- BDO Unibank 636B
- Ayala Corporation 585B
- JG Summit 478B
- San Miguel Corp 416B
- Meralco 410B
- BPI 391B
- URC 374B
- Metrobank 282B
- Aboitiz Equity Ventures 280B
- Aboitiz Power 262B
- International Container Terminals 259B
- Globe Telecom 250B
- Jollibee Foods 246B
- PLDT inc 240B
- GT Capital 184B
- Megaworld 158B
- MetroPacific 153B
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(10 year returns)
- ) SM —200 to 985 -474.27%
2.) SMPH -374% from 9 to 35
3.) Ayala Land from 10 to 50 — approx 422% up from 10 year low
4.) BDO- 392% up from 40 to 145
5.) Ayala Corp — 420% from 230 to 935
6.) JG Summit from 5 to 90 and back to 67 (Approx 16X from 10 year lows)
7.) San Miguel Corp -200% up from 65 to 175
8.) Meralco- 150% up from 160 to 360
9.) BPI from 43 to 128 and back to 86
10.) URC from 12 to 235 to 170 (approx 18X from lows)
11.) MBT from 30 to 110 back to 70
12.) Aboitiz Equity Ventures from 8 to 84 and back to 50
13.) Aboitiz Power from 7 to 49 then 36
14.) ICT -600% from 20 to 140 to 128
15.) Globe 670 to 2600 but peaked there and back to 1900
16.) Jollibee approx 560% from 10 year lows 50 to 320 to 225
17.) TEL from 2600 to 1120 or a 60% drop
18.) GTCAP from 480 to 1500 then back to 870
19.) Megaworld from 1 to 6.5 then back to 4.9
20.) MPI from 2.22 to 7.6 back to 4.8
A snapshot of 20 companies shows almost all of them up significantly except from PLDT from a 10 year perspective. However, the best gains have come from buying mostly during the 2010 era as a slew of names have not recovered since peaking from 2015. In fact only 5 names have proceeded higher from 2015 to 2019 without a significant drop which are the top 5 marketcap names in the Philippines specifically SM SMPH ALI BDO AC.
Jollibee has gone strongly upwards from 2015–2019 but has since peaked at 320. ICT has recovered rebounding from 60 to 145 but has since peaked again and is now trading at 128. The gyrations in the last 5 years have been nauseating especially for Megaworld where 50% drops seem to be norm but the longterm investor would continue to make returns if he holds especially the top 5 index weights.
It would thus be increasingly important to be selective in choosing your longterm investments as there are names less volatile and can deliver the returns smoothly rather than other names.
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The PSEI Index has gone from 2800 to 8800 or approx 223% up in the last 10 years. We however have gone pretty nowhere from 5700–8100 in the last 7 years suggesting a trading range and inability for many names to go higher. This only reinforces a need to buy the strongest names and choosing selectively the names for your longterm portfolio.
