'HOT' MONEY INFLOWS HIT $625-M
MANILA, December 6, 2003 (MALAYA) "Hot" money inflows soared to $625 million in November funding the 33 percent upsurge in share prices compared with last year.
In the first three weeks of November before the announcement of candidacy of Fernando Poe Jr. and the resignation of former Finance Secretary Jose Isidro Camacho, foreign money was pouring into the stock market.
November's net inflow at $625.5 million, more than twice as high as the year-ago level reflecting a better investor sentiment towards the country, the Bangko Sentral ng Pilipinas (BSP) reported.
BSP Governor Rafael Buenaventura said the sudden upsurge in the portfolio investments for the month was due to bargain hunting when political noise was somewhat simmering down.
In the week prior to the announcement of resignation by Finance secretary Jose Isidro Camacho, the short-term flows hit the highest weekly net inflow of $104.1 million then it went down to $8.2 million for the last week of the month ending November 26.
Compared to year-ago level, the net inflows of $1.514 million for the period only represented a 24.5-percent increase although the level of outflows has substantially declined.
"Positive factors during the month included expectations of higher third quarter corporate earnings, the acceleration in export growth in September, the lower-than programmed budget deficit in October, and the higher-than-expected GDP growth," Buenaventura said in a statement.
But in other markets, heightened political noises had taken its toll leading to the sharp depreciation of the pesos and the rising pressure on interest rates.
The BSP reported that for the period non-resident investments in all types of portfolio investments instruments recorded net inflows, namely PSE-listed securities - $50.2 million, government securities/money market instruments - $168.3 million and peso bank deposits - $407 million.
Reported by: Sol Jose Vanzi
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