051507: Net foreign buying in PSE up 73%

By Honey Madrilejos-Reyes

Reporter

NET foreign buying in the local stock market reached P33.76 billion from January to April this year, or 73.2-percent higher than the P19.49-billion level recorded in the same period in 2006. Based on figures released by the Philipine Stock Exchange (PSE), total foreign buying for the first four months went up 96.1 percent to P215.16 billion from P109.72 billion for the corresponding period last year. Total foreign selling also expanded by 101 percent to reach P181.41 billion from P90.24 billion a year earlier. PSE president Francis Lim described the increasing amount of net foreign transactions as a clear indication of ever-increasing interest in the market among foreign investors. Net foreign buying is the difference between total foreign buying against total foreign selling. “As I love to say, foreign investors would not entrust more money with our market if they entertain doubts about our prospects. Their increasing presence in our market is a major factor that keeps local stock prices moving up,” he said. In 2003 the PSE suffered a P3.8-billion net foreign selling, but reversed the trend the following year by recording a P17.84-billion net foreign buying. Since then, net foreign buying has enjoyed a steady growth, reaching P23.53 billion in 2005 and P68.49 billion last year. Total market capitalization of all listed issues reached P7.74 trillion as of April 30 or 7.9-percent higher than the P7.17-trillion mark at the end of 2006. The market capitalization of listed domestic companies hit P3.8 trillion, or 13.3 percent, higher than P3.35 trillion at the end of 2006. Total value turnover during the first four months of the year multiplied more than two-and-a-half times to reach P385.3 billion from P153.2 billion a year earlier. Average daily value turnover from January to April expanded by 154.6 percent to P4.7 billion from P1.85 billion for the same period last year. Over half, or 51.5 percent, of total value turnover was generated by foreign transactions, but Lim reiterated the PSE’s resolve not to rely on foreign inflows alone to fuel the stock market’s advance. “We must tap more local investments, if we have to sustain the growth of our stock market. We are in the process of finalizing a coordinated campaign, involving other major capital market stakeholders, to entice local investors, especially the overseas Filipinos and their loved ones in the country, to take a look at our stock market,” he said. At the end of April, the prices of 197 issues were up, those of 43 others were down, while prices of nine issues were unchanged compared to their levels at the end of 2006.

 

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