Foreign Portfolio Investments Yield Net Inflows in July

Transactions for portfolio investments of non-residents for July yielded net inflows of $895 million, reflecting a major turnaround from the $23 million net outflows recorded in June, as investors reacted to the US Federal Reserve’s decision to maintain its quantitative easing (QE) program until economic recovery in the United States is sustained, according to the Bangko Sentral ng Pilipinas (BSP).

Outflows in July dropped to $1.6 billion from $2.9 billion in June, tempered by the US Federal Reserve’s policy pronouncement. Thus, net inflows were realized across all asset types: PSE-listed securities – $97 million, Peso GS – $748 million, and Peso time deposits – $50 million.

Registered investments for the month amounted to $2.5 billion and consisted of the following: PSE-listed securities ($1.6 billion or 63.1% of total), Peso GS ($880 million or 34.9%) and Peso time deposits ($50 million or 2%). The main beneficiaries of investments in PSE-listed securities were: holding firms ($497 million), banks ($260 million), property firms ($254 million), utilities companies ($220 million), and telecommunication firms ($143 million).

Registered investments were 11.3% lower than last month’s $2.8 billion figure as the latter included subscriptions under a block sale of Cosco Capital Inc. (PSE: COSCO) shares. Nevertheless, investments rose year-on-year by 17% from $2.2 billion in 2012 due to renewed optimism after the State of the Nation address by President Benigno S. Aquino III as well as the US Federal Reserve’s announcements on QE.

The United Kingdom, Singapore, the United States, Luxembourg and Hong Kong were the top five (5) investor countries for the month with combined share of 82.9% of total registered investments.  The United States continued to be the main beneficiary of outflows from investments receiving $1.2 billion.

Registration of inward foreign investments with the BSP is voluntary.  It entitles the investor or his representative to buy foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of dividends/profits/earnings that accrue on the registered investment.