Journal of Asia Trade and Business (J. Asia Trade Bus.

; 아시아무역연구) ISSN 2383-8787 (Print)

Vol.5, No.2, December 2018 (pp.19-31)
http://dx.doi.org/10.22447/jatb.5.2.201812.19

A Literature Review of Agribusiness Companies in Global

Bourses: Perspectives Towards the Development of an Agribusiness
Index in the Philippines
Darren N. Zamudioa, Arlene C. Gutierrezb, Jeanette Angeline B. Madambac,
Normito R. Zapata, Jr.d
abcd
Department of Agribusiness Management and Entrepreneurship, College of Economics and Management,
University of the Philippines Los Baños, Philippines

Received 11 October 2018, Revised 10 November 2018, Accepted 05 December 2018

Abstract
With the shift of orientation of the Philippines from farming into a thriving agribusiness-
driven sector, the country’s economic growth became robust in the recent years. Despite the
increasing importance of the agribusiness sector, there has been little research on the
contribution of the sector to the Philippine financial market. In this paper, an attempt is made
to assess the importance of the agribusiness sector in the stock market by evaluating the
performance of the sector in other bourses. The study primarily used a descriptive research
design in evaluating the agribusiness companies listed in various stock markets outside the
Philippines. Results indicated that in the global context, several researches have been
conducted that studied the benefits of agribusiness stocks as diversification tools. In the Asian
context, there were researchers who attempted to assess the performance of agribusiness firms.
However, research gaps still exist, especially in areas relating to the development of an
agribusiness index in the ASEAN context. With various benefits as well as emerging
opportunities seen in the sector in the Philippines and in other countries, such an agribusiness
index is deemed necessary as this serves a two-fold purpose of measuring the performance of
agribusiness stocks and highlights the relevance of the sector in the Philippine financial
market.
Keywords: Agribusiness Stocks, Philippines, Agribusiness Index, Stock Market
JEL Classifications: G01, G10, G15

Ⅰ. Introduction Philippine economy has shifted from agri-

cultural farming into a thriving agribusiness-
In the past years, the orientation of the driven sector. Due to the value-addition to

a
First Author, Email: dnzamudio@up.edu.ph
b
Corresponding Author, Email: acgutierrez1@up.edu.ph
c
Co-author, Email: jbmadamba@up.edu.ph
d
Co-author, Email: nrzapata@up.edu.ph
Ⓒ 2018 The Asian Trade Association. All rights reserved.
20 Journal of Asia Trade and Business Vol. 5, No. 2, December 2018
agricultural commodities brought about by
agribusiness activities such as production,
processing, transportation, marketing, and
distribution, the agribusiness sector is posi-
tioned to greatly contribute to the Philippine
economy’s industrial development. With its
huge potential in contributing more to the
country’s value-added growth performance,
the increasing importance of agribusiness in
the economy can be further explored.
Agribusiness is defined as the “totality of all
operations involved in the manufacturing of
farm supplies, production, operations on the
farm, as well as processing and distribution
of farm commodities and items made from
them (Asian Productivity Organization, n.d.).”
It provides a wide array of investment oppor-
tunities for both institutional and private
investors. The Philippine Stock Exchange
(PSE) which is named as the best stock
exchange in Southeast Asia for four times in
the last five years by the Alpha Southeast Asia
is one of the platforms where the increasing
importance of agribusiness can be observed
(Dela Paz, 2018).
In the PSE, a rapid increase in the number
of agribusiness companies traded is evident.
In fact, there is significant evidence to illus-
trate the rapid extension of investment in
agribusiness in the past years. Based on obser-
vation, the number of agribusiness companies
listed in PSE almost doubled over the last
decade. Indeed, agribusinesses continue to be
steadfast in its development as a sector, even
in the financial market as new agribusiness
stocks start selling its shares to the investing
public.
Since there has been an increasing impor-
tance of the agribusiness sector in the country
and an absence of tools that will measure its
performance in the financial market, there is
a great need to isolate these companies to
properly analyze the performance of the
agribusiness sector. Hence, the development
of an agribusiness index that will better reflect
the performance of the sector is being
proposed.
Despite the increasing importance of
agribusiness sector in the country, there has
been little research on the contribution of the
sector to the Philippine financial market. In
this paper, an attempt is made to assess the
importance of the agribusiness sector in the
stock market by evaluating the performance
and contribution of the sector in other bourses
in the global setting. In order to do this,
relevant information and previous researches
in relation to agribusiness stocks were revie-
wed. Return opportunities and risk mitigation
characteristics of agribusiness stocks in
several countries were evaluated to identify
possible point of replication in the Philippine
setting. This was done to further justify the
need to develop a separate agribusiness stock
market index in the Philippines. Finally, this
paper aims to highlight the agribusiness sector
in the PSE so that investors will consider
investing in agribusiness stocks due to its
diversification benefits and other financial
gains, which will be laid out in this study.
Ⅱ. Objectives of the Study
The general objective of this study was to
evaluate agribusiness companies that are
publicly-listed in various stock markets
outside the Philippines. Specifically, it aimed
to (1) discuss the contribution of agribusiness
stocks in each country’s financial market, (2)
identify the factors affecting the performance
of the publicly listed agribusiness companies,
 A Literature Review of Agribusiness Companies in Global Bourses: Perspectives Towards the Development of an Agribusiness Index in the Philippines
(3) assess the return and risk potential of
agribusiness stocks as a tool for diversi-
fication, (4) evaluate the potential of the
development of an agribusiness index in the
Philippines based on the findings from other
financial markets in other countries.
Ⅲ. Methodology
The study primarily used a descriptive
research design in evaluating the agribusiness
companies listed in various stock markets
outside the Philippines. Previous researches
and journal articles were reviewed to gather
necessary information and valuable insights
about agribusiness companies in the global
setting.
The study described the performance of
these companies using various financial and
economic indicators. Furthermore, comparative
analysis was conducted to identify key simi-
larities across the various financial markets.
The performance of the agribusiness stock
market indices was analyzed through trend
analysis and by comparing such performance
with local and global benchmark indices.
Lastly, qualitative analysis was used to
evaluate whether there is really a need to
develop a Philippine Agribusiness Index based
on the findings from existing researches.
Ⅳ. Results and Discussion
1. Global Agribusiness Stock Market
Index
Agricultural development has been iden-
tified as one of the most powerful tools to
21
counter global poverty and food security. The
sector is also an important driver of economic
growth in various countries accounting for
one-third of global Gross Domestic Product
(GDP) in 2014. However, the growth in global
agriculture is threatened by several challenges
including climate change, land conversion and
increasing population (World Bank, 2018).
The world’s population is expected to grow to
around 10 billion by 2050, resulting to an
increase in demand for agricultural produce
(Food and Agriculture Organization of the
United Nations, 2018).
Despite these challenges, prospects for the
agriculture sector remain positive. Collective
efforts from both the private and public sector
contribute to the growth and sustainability of
the industry. This prospect translated to
increased investment in agriculture and in the
wider agribusiness sector, particularly in
technological innovations that boost produc-
tivity. According to McKinsey International in
January 2019 as cited by Goedde et al. (2015),
global investments intended for the food and
agribusiness sector have grown threefold from
2004 to 2013, reaching an estimated amount
of USD 100 billion. Furthermore, the sector
has demonstrated higher total returns to
shareholders (TRS) compared to other
sectors, specifically, in energy and information
technology. The food and agribusiness sector,
comprising more than 100 publicly traded
companies worldwide, realized an average
annual increase in TRS by 17 percent from
2004 to 2013, compared with 13 percent for
energy and 10 percent for information
technology during the same period (Goedde,
Horii and Sangvhi, 2015).The growing
population served as a double-edged sword
for the outlook of the sector. Due to increasing
demand, opportunities in other areas in the
22 Journal of Asia Trade and Business Vol. 5, No. 2, December 2018
agribusiness value chain, particularly in pro-
cessing and marketing, also increased. As the
demand for processed products increased, the
demand for raw agricultural commodities
increased. This further resulted to an increase
in price of farm commodities. As prices incre-
ased, investment in agribusiness increased
through the purchase of plants, property and
equipment. This further translated to a vicious
investment cycle fueled by increased capital
investment that is expected to benefit the
sector in the long run (Valdes, Cramon-
Taubadel and Engler, 2016).
As a result of these opportunities, financial
and real assets related to agribusiness, inclu-
ding real estate, publicly traded agribusiness
firms and agricultural-related commodity
markets, have started gaining interest among
investors seeking profits for diversification.
Several researches have been conducted and
intended to assess the relevance of these
agribusiness financial assets as a tool for
diversification.
Hancock Agricultural Investment Group
(2012) as cited by D’Antoni et al. (2014)
discussed the importance of farmland as a tool
for investment diversification. Since farmland
returns were negatively correlated with stocks
and bonds and moderately correlated with
commercial real estate, it became an attractive
diversification tool to reduce the impact of
market volatility in their portfolios. In fact, it
has been reported that USD 7 billion has been
allocated to farmland in the world’s largest
investment funds in 2013 (Chen, Wilson,
Larsen and Dahl, 2015). Mandal and Lager-
kvist (2012) as cited by Chen et al. (2015)
found out that agricultural asset investments
could provide good diversi- fication as these
investments have low correlation with finan-
cial asset returns.
Forward (2002), as cited by Zapata et al.
(2012), argued that the bull market prospect
for commodity markets would likely continue
in the coming decades due to the insatiable
demand for raw commodities from emerging
markets, which would continue to drive
commodity prices upwards. Furthermore, the
bull market outlook has been supported by the
increasing number of investors and financial
institutions adding commodities to their
portfolios, the growing number of agricultural
index funds and agriculturally-related com-
modity price indexes that are available for
public investment. Furthermore, various
trends in the macroenvironment supported
the outlook for the sector. One of these is the
increasing demand for healthy food which
prompted both local and international food
processors and retailers to introduce organic
products in their current offerings. Further-
more, the increasing worldwide acceptance for
genetically modified (GM) and functional food
products fueled tremendous profits to
agribusiness companies. Another factor would
be the increasing demand for inputs used in
agricultural production and agribusiness
processing by non-agricultural industries.
Lastly, agribusiness companies are regarded
as defensive investments which have lower
risks as compared to the overall market. Thus,
agribusiness stocks are expected to remain
stable under difficult and uncertain economic
conditions, making such stocks an attractive
investment for investors looking for stable
returns under various market conditions.
Results of the study conducted by Zapata et
al. (2012) showed that agribusiness stocks
and commodities were indeed more defensive
in nature and these were less volatile in
turbulent market times. Furthermore, results
indicated the strong interest among investors
 A Literature Review of Agribusiness Companies in Global Bourses: Perspectives Towards the Development of an Agribusiness Index in the Philippines
to prefer investments in agribusiness indexes
and/or agriculturally-related commodity
indexes irrespective of period or market
conditions.
Johnson et al. (2006) assessed whether
agribusiness assets can provide diversification
benefits in investment portfolios in the
Australian context. The study utilized the
agribusiness index constructed by the
Australian Agribusiness Group (AAG). The
AAG Agri-index tracked 53 agribusiness stocks
listed in the Australian stock exchange and
were categorized into five sub-sectors, namely,
producer, manufacturing, service, diversified
and forestry. Results showed that the
inclusion of agribusiness assets in a mixed
asset portfolio and diversified portfolio
provided diversification benefits. Results
reflect a low correlation between agribusiness
assets and three other assets namely shares,
bonds and property, thus validating the
diversification benefit of agribusiness assets.
Similarly, Schnitkey and Kramer (2012)
attempted to assess the diversification poten-
tial of publicly-traded agricultural companies
by constructing an Agriculture Index (AgIndex)
and comparing its performance to a global
benchmark index, the Standard & Poor’s 500
(S&P 500). The study included publicly-traded
companies that were either selling products to
crop farms or used unprocessed crops from
farms, thus, totally disregarding food pro-
cessing companies. The selection ended up
with 21 publicly-traded companies divided
into five sectors, namely, fertilizer, equipment,
seed and genetics, crop protection, and first
processor. The AgIndex was constructed using
the S&P methodology and the daily prices of
these 21 companies were evaluated for the
period from 2000 to 2011. Research findings
showed that from 2000 to 2007 (before the
23
recession), the S&P 500 performed better than
the AgIndex; however, the reverse happened
from 2008 to 2011, during and after the
recession. Furthermore, it was found out that
S&P 500 and AgIndex were highly correlated
with a correlation coefficient of 0.746. Overall,
AgIndex realized better returns as compared
to S&P500 during the same period. Results
also indicated that agricultural companies
were also affected by adverse economic
factors similar with the overall market. From
a sub-sectoral point of view, results revealed
that the fertilizer sector exhibited the highest
return, which averaged at 27.8% from 2000
to 2011. Since the research failed to include
companies engaged in downstream activities
of the value chain, the findings may be limited
and may not reflect the overall effect of
publicly-listed agribusiness companies as a
tool for diversification.
A related study was conducted by Clark et
al. (2012) and aimed to develop a large cap
index of US agribusiness companies and
compare its performance with leading financial
benchmarks. Unlike another study (Schnitkey
and Kramer, 2012), Clark et al. (2012) based
the selection of agribusiness companies on the
USDA’s Economic Research Service’s definition
of agribusiness which led to a more encompa-
ssing selection of companies. Furthermore, the
performance of the index was assessed over
a 39-year period (1970-2008) and compared
with the S&P 500, Dow Jones Industrial
Average and US three-month Treasury bill
yields. Results showed that the AGB index was
highly correlated with the S&P500 (ρ=0.7376)
and the DJIA (ρ=0.7155) but exhibited a low
positive correlation with the three-month US
Treasury bill yield (ρ=0.1935). Furthermore,
the daily and annual return of the agribusiness
(AGB) index was lower as compared to the
24 Journal of Asia Trade and Business Vol. 5, No. 2, December 2018
benchmark indices. Logically, daily and annual
price variability, as measured by the standard
deviation, was also lower than the two
comparative indices. However, during the
most recent years, particularly from 2000-
2008, the AGB index outperformed the two
indices as it offered a higher return and lower
standard deviation as compared to S&P 500
and DJIA and the correlation between AGB and
the two benchmark indices was also weaker
during the same period. With this, it was
concluded that the AGB index can provide
diversification benefits when combined with
either the two indices or the three-month US
Treasury bill yield. However, Clark et al.
(2012) failed to incorporate the period after
the most recent recession in the analysis
unlike in the other study (Schnitkey and
Kramer, 2012). Thus, the potential of the
agribusiness index as a tool for diversification
during unfavorable market conditions was not
tested.
Still another study (D'Antoni and Detre,
2014) attempted to validate the previous
studies on agribusiness stocks by examining
how an index of agribusiness stocks compare
to the S&P500 during times of recession. The
study duplicated what other authors
(Schnitkey and Kramer, 2012) and Clark et al.
(2012) did but it used a different set of
publicly-listed agribusiness companies. Such
study (D'Antoni and Detre, 2014) utilized the
first agribusiness stock index which was
launched in May 2008, specifically, the
Standard & Poor’s Global Agribusiness Index.
The S&P Global Agribusiness Index comprised
24 of the largest publicly-traded agribusiness
stocks that operated in various sectors
including agricultural products, fertilizers and
agricultural chemicals, construction/farm
machinery/heavy trucks, and packaged foods
and meats. Thus, it is more encompassing in
terms of sectoral and geographical scope as
compared to the other studies. The perfor-
mance of the Global Agribusiness Index (Ag
Index) was assessed from July 1996 until
December 31, 2008 and was compared with
the S&P 500. Results showed that the
correlation between the Ag Index and the
S&P500 has consistently grown stronger from
1996 to 2008 with a stronger correlation
observed during the most recent recession.
Thus, it was concluded that the broad-based
agribusiness index provided better diversi-
fication on positive earning days than negative
earnings days. With this, Ag Index was deemed
as an unattractive diversification tool for
S&P500 during turbulent market conditions,
both from a risk management and profit
maximizing perspective. However, an area for
further research emerged as the Ag Index
might be a good diversification for other more
specific sectors. Thus, it was recommended
that there is a need to assess the relationship
between the Ag Index and other sectors.
Furthermore, according to another study
(Katchova and Enlow, 2013), the authors
examined how the performance of agribusiness
firms compare against the rest of the firms in
the economy. The study looked at US-based
multinational firms engaged in food and
manufacturing. A total of 483 agribusiness
companies were assessed from 1961 to 2011.
Results showed that agribusiness firms
exhibited strong financial performance and
outperformed all firms in several indicators,
including profitability, liquidity and market-
related indicators. Furthermore, based on the
assessment of financial distress based on S&P
credit rating, results showed that a lower
proportion of agribusiness firms are in
distress as compared to other firms in the
 A Literature Review of Agribusiness Companies in Global Bourses: Perspectives Towards the Development of an Agribusiness Index in the Philippines 25

Fig. 1. Performance of the S&P Global Agribusiness Equity Index vs. S&P 500 (2009-2019)

Fig. 2. S&P Global Agribusiness Composite Index vs. S&P 500 (2009-2019)

economy. The study was helpful for investors
who were looking into investing in agri-
business companies specifically during eco-
nomic recessions. The research validated the
results of other studies on the value of agri-
business companies for investors.
Comparing the performance of the S&P
Global Agribusiness Equity Index with the S&P
500 after the period of study of previous
researches, it could be observed that the index
resembles the trend of the benchmark index
<Fig. 1>. The S&P 500 realized an average
26 Journal of Asia Trade and Business Vol. 5, No. 2, December 2018
year-on-year returns of 12.88% while the S&P
Global Agribusiness Equity Index realized an
average year-on-year returns of 9.18%.
Shortly after the recession, the S&P Global
Agribusiness Equity Index was able to realize
higher returns than the benchmark index (S&P
Dow Jones Indices, 2018).
Looking at a more encompassing index, the
Standard & Poor launched another index that
will cover the entire agribusiness industry. In
2008, it also launched the Global Agribusiness
Composite Index that will combine the
performance of the Global Agribusiness Equity
Index and the Global Agri and Livestock Index.
The revised index followed the same trend as
the original index as it exceeded the S&P 500
few years after the recession. After which, it
was able to realize stable returns at an average
of 2.65% annually in the last ten years (S&P
Dow Jones Indices, 2018)
Fig. 3. Agribusiness Market Value in Selected Countries in Asia, %change Year-on-year
Source: Fitch Solutions (2018).
2. Agribusiness in the Asia Pacific
Region
When topics of agribusiness are discussed,
one region in the world has been always been
the top- of-mind major contributor, that is, the
Asian region. Prospects for Asian agribusiness
have been good both in the medium and long
term, particularly on sectors like machinery,
meat and livestock, sugar and palm oil sectors,
as production and sales are expected to
increase by the end of 2018. In the long term,
it is forecasted that the Asian region will
remain a top performer in the global setting
as fueled by increased investments, consum-
ption, strong economic growth and a relatively
stable and open environment for investors
(Fitch Solutions, 2018).
Despite being a major contributor in the
 A Literature Review of Agribusiness Companies in Global Bourses: Perspectives Towards the Development of an Agribusiness Index in the Philippines
agriculture sector in the world, little attention
has been given to agribusiness firms in the
region. Specifically looking at financial markets,
out of the ten countries in the ASEAN region,
only Indonesia and Thailand have a separate
sectoral index for agriculture. For the Indonesia
Stock Exchange, it has an agriculture sectoral
index that includes primarily plantation
companies in the country while the Thailand
Stock Exchange has a more encompassing
Agro & Food Sectoral Index which includes
agribusiness companies engaged in the
upstream and downstream activities in the
value chain. For the rest of the markets,
agribusiness companies are scattered in
different sectors including consumer goods,
industrials and consumer staples sectors.
Similarly, few researches have been con-
ducted in relation to agribusiness companies
in the region. Three authors (Abdurofi, Ismail
and Sharifuddin, 2015) analyzed the perfor-
mance of agribusiness companies in Malaysia
using financial ratios before and after the
global food crisis. The study covered a sample
of 40 publicly-listed agribusiness firms in the
Kuala Lumpur Stock Exchange and assessed
their performance from 2006 to 2012. Results
showed that the overall performance of
agribusiness firms has been fluctuating during
the period of observation. Consequently, in
order to adapt to the food crisis, some firms
increased their debt to infuse more capital to
the business. Lastly, firms performed better
before the crisis, that is, the period from
2006-2008, compared to after the crisis which
was from 2008-2012. The study comprehen-
sively presented the performance of the firms
but it failed to discuss how important the
agribusiness sector is to the Malaysian
economy. Furthermore, the study failed to use
a benchmark from which the performance of
27
the firms will be compared with. The results
are just logical as some economic events affect
all firms marketwide; but the extent of the
effect can be measured if it will be compared
to other firms in other countries in the region.
Another group of researchers (Sucitra,
Suhendro and Dewi, 2018) conducted a
similar study and assessed the effect of return
on equity, earnings per share and debt to
equity ratio to the stock prices of publicly-
listed agribusiness companies in the Indonesia
Stock Exchange. The study highlighted the
importance of the agribusiness sector to the
country as it is one of the major contributors
in its economy. Six agribusiness companies
were included in the study and their
performance was assessed from 2011 to 2016.
Results indicated that ROE has a negative
effect on stock prices while earnings per share
has a significant positive effect on stock prices.
Lastly, debt to equity ratio has no significant
effect on the stock prices of the publicly-listed
agribusiness firms. The study was quite
limiting as it only took into consideration six
agribusiness companies listed in the Indonesia
Stock Exchange. The Agriculture Sector has 10
stock constituents and added to it would be
agribusiness companies engaged in down-
stream activities. The criteria or the definition
of what is an agribusiness company is lacking
in this sense.
Furthermore, still another group of resear-
chers (Nurhavarti, Survantini and Jamhari,
2016) evaluated the stock performance of
agribusiness companies listed in the Index
Liquid 45 in the Indonesia Stock Exchange.
The period of the research was five years,
specifically from 2011 to 2015. It evaluated 17
agribusiness companies in the said index,
which was done in consensus since it was also
the total of listed agribusiness companies. The
28 Journal of Asia Trade and Business Vol. 5, No. 2, December 2018
result showed that agribusiness companies
that comprised the said index had a greater
return compared to non-agribusiness stocks.
Meanwhile, another group of researchers
(Pongpanich, Peng and Maichum, 2017)
assessed the performance of 14 listed
companies in the agribusiness sector in the
Thai Stock Exchange from 2011-2014. Results
showed that most of the highly efficient
companies are engaged in the tapioca, palm
oil and ethanol industries. Furthermore,
returns to scale were used to explain the
trends in production and outlook for produc-
tivity. Based on the results, 71% of the
agribusiness companies operated under incre-
asing returns to scale. For the rest, it is
recommended that to build up efficiency, they
must increase their productivity scale.
Fig. 4. Market Value by Commodity (2006-2022)
Source: Fitch Solutions (2018).
3. Agribusiness in the Philippines
The agribusiness industry in the Philippines
remained as one of the promising sectors for
investors in the country. The vast consum-
ption market combined with strengthening
government support drive the growth in the
sector, specifically on commodities or indus-
tries like rice, sugar, milk, poultry and pork
production. The upward outlook for the sector
is also driven by the potential of the country
to engage in palm oil production. In addition,
investments in the livestock and feed sectors
are expected to increase as a result of incre-
asing consumption trends in the country.
However, challenges remained specifically on
infrastructure limitations, resulting to incre-
asing logistics and transportation costs among
 A Literature Review of Agribusiness Companies in Global Bourses: Perspectives Towards the Development of an Agribusiness Index in the Philippines
the players across the agribusiness value chain
(Fitch Solutions, 2018).
The Philippines is well-positioned to attract
new investments that would catalyze industry
growth and development. Hence, having a
more diversified investor base among the local
and foreign investors in the country is not just
achievable, but attainable as well. With its goal
of attaining an inclusive, sustainable, and
innovation-led industry strategy, the Depart-
ment of Trade and Industry (DTI) has focused
on a new industry policy that would maximize
the trade and investment opportunities and
address the challenges arising from it. A
researcher (Romualdez, 2017) reported that
one of these five priority areas under the
government’s comprehensive national indus-
try strategy program is the agribusiness sector.
Today, 20 agribusiness companies are being
traded by investors and other stakeholders in
the PSE; two of which are part of the PSEi,
namely, Jollibee Foods Corporation (JFC) and
Universal Robina Corporation (URC). Moreover,
most of these companies venture into manu-
facturing which gives value addition to any
agricultural commodity. Clearly, the definition
of agribusiness as a totality of operations
regardless of the nature and purpose of the
company, firm, or establishments such as
processing, retailing, franchising, farming, and
more can be applied here.
The performance of agribusiness stocks
listed in the PSE has been subject to little
research scrutiny in the country since most of
the studies about agribusiness stocks came
from overseas. Historically, there has been
limited research on publicly-traded agribu-
siness firms, notwithstanding, the correlation
of an agribusiness index compared to other
indices in the stock exchange.
However, interest in the topic appears to be
29
increasing since agribusiness serves as one of
the key factors of inclusive growth in the
country and is one of the priority areas of the
comprehensive government strategy on trade
and investment.
Given the lack of previous and current
research into the subject and the rapid growth
of the agribusiness sector in the Philippines,
there is potential for further extensive research
in this area. In doing so, the significant oppor-
tunities for further research in this emerging
subject in the Philippine context were made
apparent.
Ⅴ. Summary and Conclusion
Several studies tackled the benefits of
agribusiness stocks in the global setting; some
of which have provided empirical evidences
that agribusiness stocks indeed provided
diversification benefits when compared with
global benchmark indices and other financial
assets. However, there are still gaps that have
not been addressed. For instance, the benefits
of agribusiness stocks when combined with
－ other sectors were not yet discussed in any
of the previous researches. In addition, the use
of agribusiness stocks as a diversification tool
in Asian financial markets was not yet ex-
plored as well. Despite the importance of the
sector in the Asian economy, little attention
has been given to it in the financial market.
Though there are studies that measured the
performance of agribusiness stocks, these
were quite limited, and the benchmarks were
not exhaustive enough to provide a more
comprehensive view on the sector.
In the Philippines, though agribusiness is
one of the priority sectors of the current
administration, it is not being highlighted in
30 Journal of Asia Trade and Business Vol. 5, No. 2, December 2018

the financial market, which is one of the
reflections of the economy. The agribusiness
companies are scattered in various sectors in
the stock exchange and no efforts have been
made to isolate the sector to better measure
its performance.
With the increasing importance of the
agribusiness sector, such an agribusiness
index is deemed necessary. It would serve a
two-fold purpose of measuring the perfor-
mance of agribusiness stocks and highlighting
the sector in the Philippine financial market.

References

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