Portfolio inflows grow 24%

2 BIG PUBLIC OFFERINGS AMONG OPPORTUNITIES FOR FUND MANAGERS

 

By Jun Vallecera
Reporter

LOCAL markets provided so many opportunities for foreign fund managers to make money in 2006 they poured in portfolio investments by the bucket, making the year 2006 a banner year with total investments of $2.6 billion, or a rise of 23.7 percent on net basis than the previous year.      

In keeping with their opportunistic and speculative nature, portfolio investments' gross outflows also quickened by more than 58 percent to $5.37 billion.   

"The higher capital repatriation in 2006 may be attributed to profit-taking due to the appreciation of the peso," said Bangko Sentral ng Pilipinas governor Amando Tetangco Jr.      

According to the BSP, the markets were so hot gross inflows grew on aggregate by 45 percent to $7.98 billion from year-ago of $5.5 billion.  

"Sound economic fundamentals, robust corporate earnings results, outlook upgrades in the country's credit rating and economic growth and the strengthening of the peso contributed to this impressive performance," said Tetangco on Thursday.             

The performance he was talking about have also raised gross domestic product in the first nine months last year by 5.4 percent from year-ago of only 4.8 percent, and strengthened the country's external position despite some loan prepayments.        

Tetangco said the initial public offering of two large Philippine firms last year and their follow-on offerings also helped stimulate higher portfolio inflows, most of which were invested in shares of stocks traded at the Philippine Stock Exchange totaling $5.73 billion, or 75 percent of total. This was 50 percent higher than gross inflows in 2005.              

The foreign fund managers bought shares of local telecommunications companies, property firms, banks, utilities and holding companies. But some $2.22 billion were invested in peso-denominated IOUs of the government, mostly in fixed rate Treasury notes.                   

Portfolio investments in shorter-dated money market instruments totaled $31.1 million while those converted into pesos amounted to $1.1 million. Both items accounted for less than a percent of total portfolio investments.

http://www.businessmirror.com.ph/0112&132007/top_stories01.html