'Hot money' plunges to $40 million in October — BSP

The Bangko Sentral ng Pilipinas on Thursday revealed that the net foreign portfolio commonly known as "hot money" plummeted to $40 million in October, from $402 million posted a month earlier. October net inflow was likewise lower than the $237 million recorded in the same period last year. In an emailed statement, the central bank explained that the drop in net foreign portfolio investment was due to profit-taking that "triggered heavy sell-offs in PSE-listed securities.” Meanwhile, registered investments last month reached $1.5 billion, 67.9 percent higher than the figure recorded in the same period last year. The October figure was likewise higher by 1.7 percent from last September. According to BSP, the investment rise in October was caused by: -       Moody’s upgrade of the Philippines’ credit rating; -       the Asian Development Bank's upgrade of its economic growth forecast for the Philippines; -       an encouraging third quarter corporate earnings report; and -       solid economic fundamentals (strong gross domestic product, stable peso, low interest rates and manageable inflation). Still, it noted that outflows rose by 35 percent to $1.5 billion, yielding net inflows of a dismal $40 million. Investments in PSE-listed shares flowed to these major sectors: •   holding firms (US$354 million); •   telecommunication companies (US$176 million); •   banks (US$161 million); •   property companies (US$133 million);and •   utility firms (US$80 million) Most investments came from the United Kingdom, the United States, Singapore, Switzerland and Hong Kong, said the BSP. — Rouchelle R. Dinglasan/BM, GMA News