The Bangko Sentral ng Pilipinas on Thursday reported that ‘hot’ money flowed to three new listings at the Philippine Stock Exchange.
The new investments reverse the September to October outflow in portfolio investments to an inflow of $368.92 million last month.
The money largely went to an initial public offering by Rustan’s SSI Group Inc., additional listing of shares of gaming corporation, Belle Corp., and a top-up offering of Ayala Corp. Belle and other gaming related affiliates of the Sy Group was assigned to Premium Leisure Corp., formerly Sinophil.
The November inflow, however paled in comparison with last year’s total “due to the effects of the tapering of the quantitative easing program of the United States which ended in October 2014,” the central bank said.
Foreign portfolio investments or “hot money” transactions in November showed a net inflow of $368.92 million, 40.4 percent lower compared to the $980.94 million net inflow a year earlier, according to data released by BSP on Thursday.
On a month-to-month basis, the level of hot money inflow in November was a turnaround compared to the -$179.90 million net outflow in October.
Outflows reached $1.42 billion, compared with $2.02 billion a year earlier, while November inflows were recorded at $1.79 billion from the previous year’s $3 billion.
According to the BSP, transactions in Philippine Stock Exchange -listed securities yielded a net inflow of $446 million compared to the $222 million outflows last month, while peso government securities resulted in net outflows of $113 million, bigger than the $42 million net outflow in October.
About 78.7 percent of the investment went to PSE-listed securities such as holding firms, banks, property companies, telecommunication firms, and casinos and gaming companies, while 19.3 percent went to peso-denominated government securities, and 2 percent in other peso debt instruments, the BSP data said.
“The United Kingdom, the United States, Singapore, Luxembourg, and Malaysia were the top five investor countries for the month, with combined share to total of 76 percent. The United States continued to be the main destination of outflows, receiving 72.1 percent of total,” the BSP said.
Last year, foreign portfolio investments registered a net inflow of $4.2 billion, surpassing the revised $3.2-billion target of the BSP for 2013.
Foreign portfolio investments are one of the components of the country’s balance of payments (BOP), which summarizes the country’s economic transactions with the rest of the world over a certain period. The central bank has projected a $3.4 billion BOP deficit this year.