Corporate Net foreign buying in local bourse fell 18.9% in 2007
02/07/2008 | 06:25 PM
Net foreign buying in the Philippine Stock Exchange dropped 18.9 percent last year to P55.55 billion owing to the massive net foreign selling in the last two months of 2007.
Based on PSE data, net foreign selling amounted to P8.54 billion last November, its second worst one-month level, and another P8.15 billion the following month for a total of P16.69 billion in both months.
It was the biggest amount of net foreign selling for any two-month period in the record books of the PSE.
The selling frenzy continued in December as it only worsened last January, when stock prices retreated by 10 percent. That month, net foreign selling reached P11.59 billion to surpass the P9.4-billion net foreign selling record set in October 2003.
Lim warned that if the trend continues, the PSE will lose in six months all the net foreign buying that the stock market piled up last year.
“To help grasp the gravity of the situation, let me point out that net foreign buying in 2005 amounted to P23.53 billion; and we were then very happy at that time. Yet the foreign investments we lost in the past three months or since November exceeded all the net foreign buying that made us all happy in 2005," he said.
Net foreign buying is the difference between total foreign buying against total foreign selling.
PSE records showed that total foreign buying last year jumped 95 percent to P680.33 billion from P348.97 billion a year ago. Total foreign selling surged 122.7 percent to P624.76 billion from P280.48 billion.
Last January total foreign buying amounted to only P34.21 billion against P45.8 billion in total foreign selling.
Despite this, local stockbrokers projected the PSE index to end 2008 at the 3,700 level, saying that the “bull run is not yet over."
At a briefing on Thursday, Francisco Liboro, Association of Securities Analysts of the Philppines
(ASAP) president and PCCI Securities president, told reporters that a recovery in the US economy is seen in the second half of the year, thus, lending support to Wall Street and even the local bourse.
“The year-end target is 3,700, subject to review after the first half ," he said.
Liboro added that the forecast has already factored in the political tension brought about by the ouster of Pangasinan Rep. Jose de Venecia Jr. as speaker of the House and the revelations by I.T. consultant Rodolfo Noel Lozada Jr. about the $329.5-million National Broadband Network deal with Chinese company ZTE Corp.
“Personally, I think the political tension is the same as what we had for a couple of years now. Now of it's going to be a tipping point, that I don't know. I'm not saying that there won't be outrage. There will be outrage bu translating that to an upheaval is another thing," he said. - Cheryl Arcibal, GMANews.TV
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