In a press statement issued today, the Bangko Sentral reported that for the week ending November 10, 2000, foreign portfolio investments resulted in a huge net inflow of US$81.0 million, the largest single week net inflow since July 1999.
Foreign portfolio investments refer to purchases by non-residents of stocks listed in the Philippine Stock Exchange (PSE), government securities and money market instruments and peso deposits funded by inward remittances of foreign exchange from abroad.
Major custodian banks (which are the banks appointed by the foreign investor to hold and keep for and in his behalf the stock certificates and other investments acquired) reported total foreign exchange inflows of US$126.4 million last week against outflows of US$45.4 million.
It would appear from bank reports that the large net inflow funded new peso bank deposits (US$71.9 million) and purchase of PSE-listed securities (US$54.5 million). These figures significantly exceeded the capital repatriation for the period funded by proceeds from the sale of investments in PSE-listed stocks and government securities, and withdrawals of money market placements/foreign investments in peso deposits aggregating US$45.4 million.
A surge in stock purchases, especially of blue chip stocks such as PLDT and Ayala Land, Inc. was observed during the week, along with a broad recovery in stock prices. Analysts attributed the recovery in the stock market to a variety of factors. The consensus view, however, seems to be that the political crisis, which has weakened investor confidence in the economy over the last few weeks, would be resolved expeditiously under a peaceful and constitutional process.