PSE foreign buying surges to P90B

PHILIPPINE stocks continue to draw strong foreign participation but even with the local bourse tracking a surge in foreign buying, numbers revealed that local investors remain the dominant force, Philippine Stock Exchange (PSE) President Hans Sicat said on Thursday.

Sicat said in a business forum that net foreign buying jumped more than four times to P89.84 billion for the period of January to August 21. This compares with P19.16 billion posted in the same period last year.

Sicat said at the 4th Annual Corporate Treasury and CFO Summit that despite more foreigners investing in stocks, local players still ruled the market and accounted for roughly 60 percent of trading activity.

Growth can also be seen in trading volumes, which amounted to P7.35 billion in terms of daily turnover from January until August 22 versus the P5.9 billion average posted for the full-year 2011, PSE data showed.

“It’s an outstanding number [the growth in foreign buying] but to me the better indicator is the average trading volume,” Sicat said.

Those factors helped the local benchmark index post more than 20 record highs this year to hit 5,369.98 on July 5 for a year-to-date gain of over 22 percent. The PSEi has slipped since then and closed at 5,202.84 on Thursday, up almost 1 percent.

Data from the PSE showed the volumes have been increasing since the PSE started to gradually extend trading hours. From the noontime close last year, the closing time has been extended to the current 3:30 p.m. close, which was implemented at the start of 2012.

Other factors are in play, such as excess liquidity in the global markets seeking higher yields in emerging economies perceived to be insulated from the debt crisis in Europe and the slowdown in the US. The performance of the PSE index also mirrors broader sentiments on the Philippine economy as a whole, Sicat said.

The bourse is banking on increased liquidity and more capital-raising to boost earnings. So far this year, Sicat said money raised using the facilities of the exchange increased 52 percent to P91.13 billion.

He said the PSE is still on track to hit its target to almost double capital-raising at the bourse to P198 billion this year.

To aid this goal is the bourse’s implementation of the minimum 10-percent public-ownership requirement. Sicat said there are still 27 non-compliant firms at present but he is optimistic that these companies will be able to meet the requirement before the year-end deadline.

Some of the larger firms on the list include San Miguel Corp. units like San Miguel Brewery Inc., San Miguel Purefoods Co. Inc., PAL Holdings Inc., and San Miguel Properties Inc. Also on the list are Metro Pacific Tollways Corp. and Filinvest Development Corp. –Miguel R. Camus / Reporter, Businessmirror