'Hot money' plummets in August amid emerging markets selloff

Foreign funds invested in shares of stock of local listed firms and in other Philippine financial assets dropped sharply last month amid a selloff in emerging markets.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that foreign portfolio investments -- also called "hot money" because of their flighty nature -- fell 60 percent to $999 million in August from $2.5 billion the month before. Inflows also slipped 20 percent from $1.3 billion in August of last year.

Outflows also accelerated from $868 million last year to $1.4 billion this year, thus last year's net inflows of $387 million reversed to net outflows of $442 million last month. This narrowed the year-to-date net inflows from $2.2 billion last year to $2 billion this year.

The BSP blamed the net outflow on the shortened trading brought about by bad weather, and on the traditional unwinding of stock market positions during the "ghost month" of August, an inauspicious time to invest for those who believe in luck. Eight out of every nine dollars of portfolio inflows were invested in Philippine stocks.

Also responsible for the outflow was the US Federal Reserve's hints that it may unwind its economic stimulus this month, the BSP said. Nearly eight out of every 10 dollars that pulled out of the Philippines went back to the US.

Foreign funds have been scaling back their exposure to emerging markets like the Philippines amid signs that the US economy is on the mend, a trigger for the Fed's decision to remove its economic stimulus. The Fed's monthly $85-billion bond-buying -- the third tranche of what has come to be called "quantitative easing" (QE) -- has been responsible for equity rallies around the world.

As a resut of the foreign fund pullout, the Philippine Stock Exchange index has trimmed its gains from a record high of more than 20 percent to seven percent in recent sessions.

source: interaksyon.com

PSEi climbs back above 6,200-mark on easing investor worry over Syria

MANILA - Philippine share prices on Wednesday stretched their winning streak to a fourth session as investors cheered further signs of easing tension over Syria.

At the Philippine Stock Exchange, the benchmark index was up 125.18 points, or 2.06 percent, to close at 6,214.90. All sectors finished in the green with the property counter leading the charge with a gain of 3.25 percent.

Advancers beat decliners, 94 to 47, while 41 issues were unchanged. A total of 906.84 million stocks worth P9.22 billion changed hands.

Most actively traded stocks were PLDT, Ayala Land, SM Investments, Universal Robina and SM Prime. Top gainers were Vitarich, IMI and iRipple, while the biggest losers were MJCI, 2GO and United Paragon.

"Obama's statement was a big boost to the market. It seems that a diplomatic solution is in the offing which helped calmed nerves of the investors," said Astro del Castillo, managing director at First Grade Finance Inc.

In a televised address on Tuesday night, US President Barack Obama asked Congress to delay a vote on the use of force against Syria as the White House and its allies pursue a diplomatic resolution that would require Syrian President Bashar al-Assad to surrender the chemical weapons.

Overnight, the Dow Jones industrial Average rallied 127.94 points, or 0.9 percent, to 15,191.06.

The prospect of a US-led military strike against Syria has been weighing on the market in the past several weeks.

"This, and improving economic data across the globe, they’re bringing back the confidence of most investors. We're in the last leg of the year so you're seeing more positioning," said del Castillo.

Adding to the euphoria were reassuring economic data that saw China's industrial output and retail sales topping forecasts. Stocks rallied at the start of the week after China reported better-than-expected exports data, adding to signs of the resiliency of the world's second biggest economy.

Fears that the US Federal Reserve may start tapering its stimulus program have been pushed on the sidelines this week.

"The market has digested that news and if the Fed actually reduces its stimulus, the reaction will not be as worse as what we saw in the previous months," said del Castillo.

The Fed will hold its policy meeting on September 17-18 and is expected to provide direction on the future of its economic stimulus. The US central bank's $85-billion bond-buying program – the third tranche of what has come to be called “quantitative easing” (QE3) – has been a key driver of equities rallies in the past several months.

source: interaksyon.com

PSEi slips below 6,000-mark on fears of US strike against Syria

Philippine share prices fell sharply on Wednesday to pull down the benchmark index below the 6,000-mark as renewed concern over an imminent US military strike against Syria weighed on investor sentiment.

At the Philippine Stock Exchange, the local barometer dropped 115.58 points or 1.90 percent to finish at 5,968.33. The PSE index (PSEi) shed as much as 2.4 percent in early trade.

All counters shed at least a percent each led by the holding firm sub-index with a decline of 2.29 percent. There were three losers for every gainer, while 48 issues were unchanged. A total of 976.52 million shares worth P6 billion changed hands.

Most actively traded stocks were SM Investments, PLDT, Ayala Corp, Ayala Land and GT Capital. Top advancers were iRipple, Maybank ATR and Century Properties, while the biggest losers were ATN B, Medco and RFM.

"Renewed concerns in the Middle East and the strengthening dollar scared off the investors," said Astro del Castillo, managing director of First Grade Finance Inc.

"Moving forward, the concerns now will be the inflationary effect towards growth especially if the US will pursue such attack on Syria. It will possibly impede global growth," del Castillo said.

Coming off the Labor Day public holiday, US stocks closed higher following the release of favorable economic reports on manufacturing and construction spending, but trimmed gains after key US Congressional leaders, including House Speaker John Boehner, backed President Barack Obama's call for military action against Syria.

The US had condemned Syria’s chemical attack that killed nearly 1,500 people in Damascus.

Overnight, the Dow Jones industrial average rose 23.65 points or 0.16 percent, to 14,833.96.

source: interaksyon.com

PSEi returns above 6,100-mark

 Philippine share prices extended their gains on Friday to lift the composite index near the 6,100 level.

At the Philippine Stock Exchange, the benchmark index opened slightly higher with a gain of 0.7 percent, with buying momentum accelerating as the session progressed.

At the close of trades, the composite index rose 130.96 points or 2.20 percent to end the week at 6,075.17. All sectors finished in the green with the property, holding firm and industrial counters up at least two percent each.


There were two gainers for every loser, while 37 issues were unchanged. A total of 1.26 billion stocks worth P14.43 million changed hands.

Most actively traded stocks were SM Investments, Ayala Land, PLDT, SM Prime and Ayala Corp. Top advancers were A Brown, Nextstage and Berjaya, while the biggest losers were Jolliville, Calapan Ventures and Cyber Bay.

The rally was fueled by window dressing and follow-through buying after the government reported economic growth that topped expectations, said Joseph Roxas, president at Eagle Equities Inc.

The Philippines' gross domestic product (GDP) expanded by 7.5 percent in the second quarter, defying the slump in the region and making it one of Asia's fastest growing.

"The GDP data came at a time when the market was ready for a rebound," said Roxas.

Prior to yesterday's 3.6 percent gain, the main index had been bleeding in four of the last five sessions, with losses aggregating nearly 13 percent.  Escalating political tensions in Syria and the prospect of the US Federal Reserve winding down its stimulus program had been weighing on global stock markets.

Overnight, the Dow Jones Industrial Average rose 16.44 points, or 0.11 percent, to close at 14,840.95 amid further signs of an improving US economy.

Data showed the world’s largest economy grew at a revised rate of 2.5 percent in the second quarter, higher than the initial estimate of 1.7 percent. Meanwhile, applications for unemployment benefits fell more than expected last week.

Tempering gains in Wall Street were lingering concerns over a possible Western-led military strike against Syria for using chemical weapons in a massive deadly attack last week.

source: interaksyon.com