November 30, 2015 at 11:10 pm
Julito G. Rada
Foreign funds remained in the local capital markets in the first week of November after a less volatile trading in the local stock market.
Latest data from Bangko Sentral ng Pilipinas showed that registered foreign portfolio investments posted a net inflow of $15.66 million from Nov. 2 to 6, higher than $4 million in about the same period last year.
Total inflows for the week reached $341.13 million, down from $447 million on year, while gross outflows stood at $325 million, down from $443 million in the same period last year.
Despite the positive number, year-to-date net outflow since January stood at $344.73 million, a far cry from the target of $1.4 billion net inflow this year.
Foreign portfolio investments are overseas funds that are temporarily invested in local stocks, government securities and money market. These are also called “hot money” because of the ease they are invested in and taken out of the local markets.
Hot money in October posted a net inflow of $27.84 million, a reversal of the $179.9-million net outflow in the same month last year. It was also a turnaround from the $324-million net outflow in September this year.
The October net inflow was the first since February this year, after seven consecutive months of net outflows starting March due to concerns on the possible lift-off of interest rates in the United States, the slowdown of the Chinese economy and profit taking.
Net inflows of $592 million and $1.190 billion were recorded in January and February, respectively. But net outflows of $21.58 million, $31.14 million, $569.27 million, $521.99 million, $160 million, $542 million, and $323.98 million were posted from March to September, respectively.
Total inflows in October reached $1.647 billion, lower than $1.751 billion a year ago, while gross outflows stood at $1.619 billion, significantly lower than the $1.930 billion in October 2014.
This brought portfolio investments in the first 10 months to a net outflow of $360 million, lower than the net outflow of $1.077 billion a year ago. Total year-to-date inflows reached $17.605 billion, lower than $18.114 billion a year ago, while outflows hit $17.96 billion, down from $19.19 billion on year.
About 68.8 percent of investments in October were in Philippine Stock Exchange-listed securities pertaining to property companies, holding firms, banks, food, beverage and tobacco firms, and telecommunication companies. Peso government securities accounted for 31.2 percent and the rest were investments other peso debt instruments.