Foreign investments in stocks report recovery

Published by rudy Date posted on February 12, 2009

MANILA, Philippines – Foreign investments in Philippine stocks and government securities recover in January after investors became optimistic over the “inauguration of a new US president” and the country’s single-digit inflation rate.

“Low capital withdrawal levels” were reported, resulting in a net inflow of foreign portfolio investments worth $221.6 million for January this year, the Bangko Sentral ng Pilipinas (BSP) said. The figures are in contrast to the $80.0 million net outflow in December last year and the $237.9 million net outflow in January 2008.

“Some optimism on the inauguration of the new US president and the deceleration in the inflation rate to 8 percent in December may have contributed to the low level of capital withdrawal for the period,” BSP Governor Amando M. Tetangco, Jr. said.

Meanwhile, gross investment inflows reached $502.1 million, plunging by 56 percent compared to the previous period’s $1.2 billion.

Similarly, outflows declined to $280.5 million, 80 percent lower than last year’s outflows, which hit $1.4 billion.

Bulk of inflows – at $321.1 million – were allotted to investments in shares traded at the Philippine Stock Exchange. Of the said figure, 63 percent went to shares of mining and telecommunications companies.

Hot money flows into the stock market accounted for 64 percent of the total but the BSP said these inflows were actually 47 percent lower than gross inflows recorded in January last year.

For its part, peso-denominated government securities reached $181 million, 67 percent lower than last year’s levels.

The Netherlands, the United Kingdom, and Singapore were the largest investor countries, contributing three-quarters of total gross inflows during the one-month period.

Outflows were mainly from money market instruments and peso bank deposits which accounted for 90 percent of total outflows. The rest were withdrawal of investments from listed shares and government securities. – GMANews.TV

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