‘Hot’ money surged in January to $1.27 billion

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Category: Top News

Published on Thursday, 14 February 2013 21:12

Written by Miguel R. Camus | Reporter

Net foreign portfolio (“hot” money) investments surged more than two times in January to $1.27 billion from the same period in 2012, helping drive record gains in the local equities market last month, the Bangko Sentral ng Pilipinas (BSP) said in a statement on Thursday.

The BSP added that net foreign portfolio investments were also up close to six times compared to the previous month.

Total registered investments, on the other hand, hit $2.8 billion in January, 61.5 percent higher than December and more than double the $1.2 billion booked a year ago.

Shares listed with the Philippine Stock Exchange (PSE) cornered the lion’s share, or 65.3 percent, followed by peso-denominated securities, which accounted for 33.6 percent, with the remainder going to time deposits.

Breaking down those figures, PSE holding firms accounted for $743 million, banks $344 million and property firms $235 million, with the remainder going to telecommunications and utilities.  

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Based on net inflows, peso government securities accounted for 58 percent and PSE-listed stocks 39.2 percent, with the remainder accounted for by peso time deposits.  

The BSP said the higher investment figures came as the Securities and Exchange Commission hinted at relaxing its strict interpretation on foreign-ownership caps, low interest rates and expectations that the Philippine economy will continue to post robust growth in 2013.

Foreign portfolio investments are also known as hot money, so-called for the ease by which they enter and exit the markets.

These inflows helped propel Philippine stocks to fresh highs last month with the main benchmark index gaining another 7.4 percent with its January 31 close of 6,242.74.

The BSP said outflows were almost the same as that for December, or $1.5 billion.

Singapore, the United States, the United Kingdom, Luxembourg and Hong Kong were the top five investor countries for the month, it added.  The US continued to be the main beneficiary of outflows from investments.