ASEAN KEY DESTINATIONS
Foreign investments surge into Philippines
In a statement, BSP Gov. Amando Tetangco Jr. said transactions in foreign portfolio investments last month yielded a net inflow of $1 billion from $129 million in the same month last year.
Month on month, hot money grew eight-fold from $494 million in September.
For the first 10 months of the year, FPI transactions resulted in a net inflow of $2.5 billion, reflecting a 587-percent increase from the $358 million recorded in 2009.
Registered investments aggregated $8.9 billion, or 64 percent higher than last year's $5.4 billion Of these, $6.6 billion were investments in Philippine Stock Exchange (PSE)-listed shares.
The central bank said the bulk of these investments went to property companies and banks at $1.4 billion each; holding firms, $1.2 billion; telecommunication companies, $1.1 billion; and utility firms, $683 million.
The $2.3-billion balance of registered investments was in peso-denominated government securities and peso time deposits and money market instruments.
The top five investors were the United States, the United Kingdom, Singapore, Luxembourg and Hong Kong, contributing 79 percent to total registered investments.
Outflows during the period reached $6.5 billion, compared with the $5.1 billion in the same period last year, which were mostly withdrawals from interim peso deposits, the BSP said.
But on Thursday local share prices tumbled for the fifth consecutive trading session as AB Capital Securities Inc. believes that the sell-off may have been triggered by a recommendation made by Morgan Stanley, advising investors to reduce holdings in Southeast Asia and switch to cheaper markets like South Korea and China.
"The firm said that China's low earnings volatility and relatively contained inflation make it more attractive. In contrast, Morgan Stanley said that high earnings growth expectations are already embedded in valuations for Southeast Asian markets," AB Capital said.
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