New PSE listings boosted ‘hot money’ inflows in November

MANILA, Philippines–Foreign investments in stocks, bonds and deposits turned positive in November after two consecutive months in the red, with new listings on the local bourse attracting cash from overseas.

Foreign portfolio investments in November improved to a net inflow of $369 million. This was better than the net outflows in September and October as foreign money fled the country, data released by the Bangko Sentral ng Pilipinas (BSP) yesterday showed.

The improvement last month was driven mainly by developments in the stock market, where local firms raised fresh funds to bankroll their expansion.

The first was retailer SSI Group Inc.’s initial public offering (IPO). SSI handles Rustans department stores and supermarkets, as other major clothing brands’ outlets in the country.

The second development was casino operator Bloomberry Resorts Corp.’s listing of additional shares in the market. Bloomberry owns and operates Solaire Resort and Casino, the first of what will be four new gaming establishments to open at the Philippine Amusement and Gaming Corp. (Pagcor) Entertainment City in Parañaque.

SSI’s IPO raised P6.5 billion for the company, while Bloomberry’s follow-on offering earned P5.5 billion in fresh cash.

Net inflows in portfolio investments, often referred to as “hot money,” in November was an improvement from net outflows of $180 million in October and September’s $324.42 million. Year-on-year, portfolio investments in November this year were down from $981 million.

Gross inflows for the month reached $1.8 billion, roughly the same as the October level and 40.4 percent lower year on year “due to the effects of the tapering of the quantitative easing program of the United States, which ended in October,” the BSP said.

About 78.7 percent of all investments in November went to publicly listed firms. A fifth of the total went to government securities, while the rest were in other peso-denominated debt instruments.

Top sources of investments were the United Kingdom, the United States, Singapore, Luxemburg and Malaysia, which accounted for 76 percent of the total investments.

Read more...