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MANILA - Foreign investors flocked to the stock market, driving it to record levels amid the favorable macroeconomic environment.
During the fourth Annual Corporate Treasury and CFO Summit, Hans Sicat, Philippine Stock Exchange president and chief executive officer, said foreign investors were net buyers at P89.4 billion as of Wednesday, more than four times the P19.1 billion registered in the same period last year.
Despite the surge in foreign participation, domestic trading accounted for a larger chunk of the traded volume at 62 percent.
"Our monetary environment continues to be favorable both for businesses and consumers. Economic indicators such as inflation, interest rates, external debt as a percentage to GDP and gross international reserves are all trending towards the positive side," said Sicat.
The inflow of foreign portfolio investments or "hot money" to the Philippines surged to a two-year high of $962.75 million in July. The figure was more than three times higher than the $301.95 million in the same month last year and a turnaround of the net outflow of $7.69 billion in June.
Listed shares in the PSE were the main beneficiaries of the hot money, cornering bulk of the net inflows at $823 million followed by peso government securities at $175 million, the Bangko Sentral ng Pilipinas said.
"With favorable economic trends, stable structural drivers and enhanced governance, there's no denying our enhanced potential for sustained long-term growth. There are lots of reasons to remain bullish and optimistic on the PSE as an attractive investment destination. Compared to our peers, the PSE is just scratching the surface of potential," said Sicat.
Trading activity was robust with average value turnover growing 28.7 percent year-to-date to P7.35 billion per day.
Total market capitalization went up by 15 percent year-to-date to near the P10-trillion mark.
As of Wednesday, the PSE index was one of the best performing benchmark indices in Asia with a return of 17.8 percent year-to-date, only behind the 19.1 percent of Vietnam.
Sicat described it an outstanding feat since the PSEi was the top performing index last year.
The PSEi has touched fresh record levels 21 times this year, the last of which was on July 5 at 5,369.98.
Capital raised at the local bourse - including private placements, stock rights offerings and follow-on offerings - reached P91.13 billion year-to-date, 51 percent higher than the P60.3 billion in the same period a year ago.
"It is well on its pace to break the record level we achieved last year," said Sicat.
The PSE expects capital raised at the local bourse to double to P198 billion this year from P107 billion last year should the remaining non-compliant companies move to raise their public float.
At end-June, a total of 27 listed firms had yet to comply with the 10 percent minimum public float requirement of the local bourse, down from 45 at end-2011.
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