AYALA-LED Bank of the Philippine Islands (BPI) on Monday launched its own financial market indicator, the BPI Index, its first venture into providing a broad range of Philippine financial market indices.
The index aims to provide investors and portfolio managers locally and from around the world with barometers representative of the performance of the aggregate domestic stock or bond markets or for particular segments against which they could assess the actual performance of individual investment portfolios.
The index further enables the innovation of new financial products and a more thorough and accurate analysis of market trends over time to help investors make more intelligent and informed financial decisions, the bank said.
“BPI is very excited to be launching its own series of financial market indicators, joining the league of well-known global index providers,” said Simon Paterno, executive vice president and head of Financial Products and Services Group of BPI.
“With almost 165 years of experience in providing financial solutions, being the first local financial institution to sponsor a broad range of indices is consistent with our tradition of innovation and aligned with our mission to enable clients in their financial decision-making,” he said.
“The index is also an important demonstration of BPI’s continued commitment to advance the development and deepening of the Philippine capital markets,” he added.
BPI Index’s initial suite is composed of eight indices—the BPI Philippine Government Bond Index, BPI Philippine Government Bond 1-3 Year Index, BPI Philippine Government Bond 1-5 Year Index, BPI Philippine Government Bond 5+ Year Index, BPI Philippine Government Liquid Bond Index, BPI Philippine Government Money Market Index, BPI Philippine Corporate Bond Index and the BPI Philippine Equity Total Return Index.
BPI is the index sponsor while wholly owned subsidiary, BPI Investment Management Inc. (BIMI), is the index calculation agent.
Six of the BPI Index series are intended to reflect the performance of Philippine
Government, fixed-rate straight bonds denominated in Philippine peso that comply with the valuation standards of the Bangko Sentral ng Pilipinas.
Weighted by the market capitalization of each security, eligible securities are filtered based on size and maturity. Index values will be computed at the end of every business day and will be published on the BPI website.
BPI also introduced the market’s first ever index that tracks the peso-denominated debt of Philippine corporations which, in the current low interest rate environment, is relevant in the face of increased demand from investors for higher-yielding corporate bonds.
The bank also offers a new alternative to measuring equity returns with its total return index, which is a more accurate indication of the performance of equity portfolios where dividends are reinvested.
While the fund management industry has long been using local bond indices, the bank said its introduction of the BPI Philippine Corporate Bond Index plugs the hole for previously unavailable transparent pricing of debt of the country’s biggest borrowers.
“Analysts can also refer to the new index to analyze more thoroughly the difference in performance of the Philippine equity and bond markets,” said Jose Mari Valmayor, BIMI president.