Hot money flows out as more investors leave stock market

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Metro Manila (CNN Philippines, August 16) — Foreign portfolio investments, or hot money, continues to be in dire straits.

While the latest Bangko Sentral ng Pilipinas (BSP) data recorded more investments in July than in June, it was not enough to make up for the previous month's losses.

Hot money as of July was at $959.44 million, a 33.1 percent decline from the $1.4 billion recorded from January to July last year.

Net inflows for the month were at $53.29 million, as the $959.44 million in inflows was able to slightly offset $906.15 million in outflows.

With June recording a net outflow of $516.12 million and May with a net outflow of $206.35 million, last month's data was a slight recovery.

"This may be attributed to investors' anticipation of good second quarter corporate earnings results. The figure, however, is lower compared to the $206 million net inflows recorded in July last year," the BSP said in a statement.

A bulk of last month's net inflows came from the investments in the Philippine Stock Exchange at $51 million, and in other peso debt instruments at $11 million. Net outflows, at $9 million, were from investors pulling out from government securities.

The United States, the United Kingdom, Singapore and Hong Kong continue to be a part of the top five investor countries for July, along with the Luxembourg, making up 84.8 percent of the total inflows. Bulk of these investments continue to be in the stock exchange, with the rest into government securities.

The Philippine Stock Exchange closed today at 7,517.36, a 0.31 percent decline from yesterday's trading. All sub-indices closed in the red, except for the financials sector.

Traders attribute this decline in today's stock market to fears over the Turkish currency meltdown and its possible contagion effects.