By Des Ferriols
The Philippine Star 03/17/2007
Net foreign portfolio investments reached $665 million during the first two months of 2007, up 58 percent from last yearʼs $421.26 million.
Data from the Bangko Sentral ng Pilipinas (BSP) showed gross foreign portfolio investments of $2.260 billion over the two-month period while outflows totaled $1.595 billion.
The gross investment inflows, which rose by 118 percent from the year-ago level, consisted mainly of funds invested in stocks amounting to $1.833 billion, or 81 percent of total.
For the month of February alone, the BSP said the net inflow from BSP-registered foreign portfolio investments amounted to $412.40 million, reflecting a 63-percent growth from Januaryʼs $252.52 million.
The BSP said the inflows were boosted by the liberalization of the countryʼs foreign exchange rules as well as positive economic reports such as the 5.4-percent economic growth and lower-than-targeted budget deficit in 2006, the further slowdown of the inflation rate, and the continued strengthening of the peso.
The BSP said the bulk of portfolio investments that went into stocks were spread out among holding firms and companies in the property, telecommunication, utility and banking sectors.
On the other hand, investments in peso-denominated government securities, mostly FXTNs or fixed-rate treasury notes, accounted for 15 percent or $337.13 million of total.
Investments in money market instruments of $0.28 million and peso bank deposits of $89.90 million had a combined share of four percent.
The BSP said these investments were funded with fresh inward remittances of foreign exchange converted into pesos through banks operating in the
According to BSP data, about 67 percent or $1.522 billion originated from the
The BSP reported that foreign investments in listed shares and government securities were both more than doubled their corresponding levels in 2006, reflecting sustained investor confidence.
For the first two months, the BSP said gross capital outflows for the two-month period rose 159 percent from the comparative 2006 level of $615.09 million due to divestments from listed shares of $735.48 million (46 percent of total) and government securities amounting to $466.30 million (29 percent).
There were also withdrawals of money market placements and peso deposits totaling $393.57 million (25 percent).
The BSP said outflows were higher during the two-month period because of profit-taking by some foreign investors who wanted to take advantage of the continued appreciation of the peso.
In February alone, on the other hand, total inflows of registered foreign portfolio investments aggregated $1.249 billion, of which a large portion ($1.102 billion or 88 percent) consisted of shares listed in the Philippine Stock Exchange (PSE).
Government securities, primarily FXTNs, accounted for $56.68 million (five percent), while placements in money market instruments and peso bank deposits made up the remaining $90.18 million (seven percent).
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