Foreign buying in RP stocks plummets

FOREIGN buying of shares of listed local companies fell sharply in the first four months this year, according to Philippine Stock Exchange (PSE).

Data from the PSE showed net foreign buying at end-April dropped 55 percent to P9.49 billion from P21.1 billion in the same four-month period last year.

Net foreign buying is the difference between total foreign buying and total foreign selling.

In April alone, net foreign buying amounted to P16.9 billion due to the tender offer conducted by Kirin Holdings Co., Ltd. for San Miguel Corp.’s shares in its local brewery unit.

Jun Calaycay of Accord Capital Equities Corp. said the foreign buying data is a sign that the market is already recovering from the crisis last year.

Calaycay also said developed countries, which have been the hardest hit by the global credit crunch, were not the usual sources of foreign buying at the local bourse.

“The Philippines is not the significant destination of their funds,” he said.

In the first quarter of the year, net foreign portfolio investment—which is incoming less outgoing foreign money invested in Philippine financial assets—posted a net inflow of $54.8 million from the $129.8-million net outflow in the same period last year.

By type of instrument, investments in listed shares, government securities and money market instruments posted net inflows of $681 million, $396.9 million and $46.1 million, respectively.

Placements in peso bank deposits, however, showed a net outflow of close to $1.1 billion.

Gross capital outflows reached an aggregate $1.2 billion, a 62-percent drop from $3.2 billion a year ago.

Of the total, 89 percent comprised of money market instruments and peso bank deposits, 8 percent in the form of withdrawals of investments from listed shares, 2 percent from government debt papers, and less than a percent from remittances of cash dividends, profits and earnings. –Chino S. Leyco, Reporter, Manila Times