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Saturday, September 09, 2006
Foreign funds in stocks, bonds up 12.3% in August
MANILA - Foreign investment in Philippine stocks, bonds and other financial instruments stood at $131.5 million in August, up 12.3 percent from July, the Bangko Sentral ng Pilipinas (BSP) said yesterday.
The BSP said total net portfolio inflows for the first eight months of the year totaled $1.02 billion.
In a statement posted on its website, the BSP said the figures reflect growing confidence among foreign investors in the economy, bolstered by easing inflation, double-digit growth in exports and healthy corporate earnings.
“However, recurrent concerns that the US Federal Reserve may resume increases in its interest rates, volatile crude oil prices and the National Government’s budget deficit of P17 billion in July after three consecutive months of surpluses may have limited the increase in the net inflow,” the statement said.
Stock market
The BSP said about 65 percent of the registered foreign portfolio investments in August went to the local stock market.
Investments in government securities and peso bank deposits accounted for the balance of 35 percent, the statement said.
According to the BSP, PSE-listed shares of $2.8 billion were mainly shares in telecommunication, property and banking firms. Investments in peso-denominated government securities, amounting to $1.37 billion made up 33 percent; those in money market instruments reached $27.9 million; and peso bank deposits of $1.1 million had a combined share of one percent.
The registered investments were funded with fresh inward remittances of foreign exchange converted into pesos through banks operating in the Philippines, 81 percent or $3.425 billion of which originated from Singapore, the United States and the United Kingdom.
But the BSP also reported that foreign investments in PSE-listed shares dropped by five percent or $154.7 million from the year-ago level.
It blamed the decrease partly on the lower volume of new and additional initial public offerings issued and offered to foreign investors this year compared to last year and lower investments in telecommunication, holding and mining firms.
Gross inflows from foreign investments in government securities also declined from last year, but only by one percent or $13 million.
Divestments
Meanwhile, capital repatriations increased by 34 percent from last year, mainly due to divestments from government securities of $1.457 billion, which is 46 percent of total, up by 92 percent from the year-ago level.
Divestments from listed shares of $1.103 billion accounted for 35 percent and were seven percent higher than last year’s figure.
Withdrawals of peso deposits, totaling $626.2 million, and of money market placements of $0.2 million made up the balance of 20 percent of capital repatriations. The figures are higher by six percent from last year’s levels.
The BSP said profit taking and the desire of investors to cut losses from exchange rate movements as well as changes in the prices of the listed shares and government securities may have been the reason for the higher capital repatriations this year compared to last year. (AFP/BSP PR)
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