• The Philippines would be a bankrupt country if it weren’t for 2 factors 1) The 2-3 million overseas Philippino’s sending their money back home (OFW’s) to support their families – according to the Philippines Statistics Office*, Overseas Filipino Workers During Six Months Prior to the 2013 Survey by Area, transferred 163 billion pesos, that is ~USD 3.6 bn within 6 months, an amazing number, and strangely other studies that estimate some USD 25bn was remitted back to the Philippines in 2014**, this all translates into consumer spending, real estate purchases and so forth. 2) BPO’s – This industry makes ~USD 17 bn p.a. revenues, has been growing @ ~20% p.a. for the past 7 years, allows people a higher average salary than was previously available and is on track to overtaking India – again this leads to more consumer spending than previously existed 10 years. Now if weren’t for these 2 factors I would have serious doubts about ever investing there b/c 1) Their government has little control of anything (utilities, infrastructure, etc etc are all under the control of private entities) 2) As a physical location, to be a manufacturing hub is close to impossible, plus the fact it is made up of 7,000 islands makes doing any type of business rather difficult. 3) ~80% of the market capitalisation is dominated by ~6-7 families. However despite all of these negatives, just like anywhere in the world, you can find some wonderful ideas to invest in over there, and there are some amazingly well run enterprises, just look at URC and BDO as simple large cap examples.
• Volatility has returned, well if you had closed your eyes for the past 1.5 weeks, then nothing much has really changed other than energy bouncing back a little bit, going forward what can we expect? More volatility? A year end rally? A potential fed rate increase? Fun times ahead.
• CPF announced a huge buyback – because it’s holding in CPALL is equal to its existing market cap, PTTGC has announced a huge buyback, analysts are now writing that QH is trading at its holding’s value thus you’re getting its business for free, which other companies could do the same? I’d start looking at which companies begun buying back shares in 2009 and see if those names are trading at levels that would entice management/boards/majority shareholders to propose the same

Source: * PSA, ** HKDC