Net ‘hot money’ hits 2-month high
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Thu, 14 Feb 2019 16:21:27 +0000
Net foreign portfolio investments remained positive in January, rising to their highest in two months, based on Bangko Sentral ng Pilipinas (BSP) data released on Thursday.
The $762.82-million net “hot money” inflow — up from December’s $278.11 million — came as investments in peso debt instruments and the Philippine Stock Exchange (PSE) more than offset outflows.
Net inflows were noted for PSE-listed securities ($506 million), peso government securities ($256 million) and peso time deposits (less than $1 million) while transactions in other peso debt instruments resulted in net outflows of less than $1 million.
“This may be attributed to investor optimism arising from the easing trade tension between the US and China and the decline in inflation alongside the increase in net foreign buying in PSE-listed shares in January 2019,” the central bank said in a statement.
Inflation dropped to a 10-month low of 4.4 percent in January from 5.1 percent in December.
The January “hot money” result was the largest net inflow since the $832.07 million posted in November. It was also higher than the year-earlier net inflow of $162.16 million.
Registered foreign portfolio investments amounted to $2.06 billion for the month, 30.7 percent and 27.1 percent higher, respectively, than the $1.58 billion in December and the $1.62 billion recorded a year earlier.
The bulk of the funds was invested in PSE-listed securities — mainly holding firms, property, banks, food, beverage and tobacco, and retail companies.
The 28.4-percent balance went to peso government securities and peso time deposits.
The United Kingdom, the United States, Singapore, Norway, and Hong Kong were the top five investor countries with a combined 74.7 percent of the total.
January’s outflows of $1.29 billion, meanwhile, were lower compared to figures recorded for December and January 2018.
The US remained the main destination of repatriated funds, accounting for 78.4 percent.
Taking preliminary results for the first day of February into account, year-to-date hot money flows were positive at a net inflow of $810.65 million.
Full-year hot money flows hit a net inflow of $1.204 billion last year, an about-face from 2017’s $195.40-million net outflow.
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