Flight of funds up in ’13

The local market Tuesday is still on holiday as the nation marks the passing of the year.

On the last trading day, the main-share Philippine Stock Exchange index managed to close up for the fifth straight year, despite the shocks arising from the US decision to scale back its easy money policy. The PSEi rose by a modest 1.33 percent to 5,889.83 for the year.

Citigroup said in a research note that, in 2013, equities trumped bonds worldwide. The year also marked an outflow of funds from emerging markets. From the start of the year until Dec. 25, the inflow of equity funds reached $252 billion, compared with only $4.3 billion for bond funds. Funds placed in developed markets accounted for $267 billion of total equity inflow against an outflow of $19.4 billion in 2012.

“Compared to the $50-billion inflow in 2012, the outflow in 2013 shows the poor sentiment towards [emerging market] equities,” Citigroup said.—Doris C. Dumlao