Investors drawn in by Aquino’s good governance thrust — PSE chair
MANILA, Philippines—The Philippines is experiencing a surge of portfolio investments from abroad on the back of renewed confidence among fund managers in the country’s economic prospects, according to a ranking stock market official.
In particular, Philippine Stock Exchange chairman Jose Pardo pointed out that some P24.3-billion worth of net foreign buying in local shares have so far been recorded this year, reversing the net foreign outflow experienced during the same period in 2011.
“The continued strengthening of our macroeconomic fundamentals, positive outlook on the growth of our listed companies and confidence in your administration’s good governance drive, among others, have been catching the attention of investors locally and globally,” Pardo said in his speech before President Benigno Aquino III at the PSE trading floor, on Tuesday, to celebrate the stock index’ historic close above the 5,000 mark for the first time last Monday.
“This historic rise of the index is a strong testament to the growing investor interest in the Philippines,” he added.
Last Monday, the PSE index closed at 5,030.58, marking the 11th time this year and the 19th under President Aquino’s term that the market barometer set new highs. On Tuesday, however, the PSEi ended the day sharply lower at 4,967.39 — a sharp correction of 63.39 points or 1.26 percent — breaking five days of continual advances.
“Since the first day of our president’s administration or in a matter of 20 months, the index has also already climbed by 52 percent,” Pardo said.
He also pointed out that some P764 billion in wealth has been created in the stock market so far this year, representing the average 8.9-percent increase in the value across all firms listed on the bourse.
More importantly, trading activity on the stock market has also increased in recent weeks, recently hitting P8 billion per day, representing a 65-percent increase over trading levels in the same period in 2011.
Pardo also pointed out that the PSE has since extended its trading hours into the afternoon to make the market more open to investors “as if to mirror the administration’s running slogan that the Philippines is open for business.”
The PSE chairman described President Aquino’s desire to see the index breach the 6,000 mark as “ambitious,” but added that “the difficult takes a while and the impossible, just a little bit longer.”
“We believe that with the bold reforms your administration is undertaking, our market in turn can maintain its record-breaking advance,” Pardo said.
Tuesday’s activity marked the second time that President Aquino visited the PSE trading floor to ring the ceremonial opening bell.
On both instances, the stock market ended lower for the day.
