BSP: More hot money in January over improving investor sentiment

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Metro Manila (CNN Philippines, February 14) — The country's foreign portfolio investments (FPI) grew by $763 million last month as investor optimism was upbeat over improving trade talks between the U.S. and China and a lower inflation rate, the Bangko Sentral ng Pilipinas (BSP) said Thurday.

Also known as hot money for the ease by which it enters and exits the market, the BSP reported that FPI in January posted a net inflow of $763 million. This was much more than the $162 million net inflow recorded for the same month last year

"This may be attributed to investor optimism arising from the easing trade tension between the US and China and the decline in inflation alongside the increase in net foreign buying in PSE (Philippine Stock Exchange)-listed shares in January 2019," the BSP said in a statement.

FPI inflow in January was around $2.1 billion, 30.5 percent higher than the $1.6 billion inflows recorded year-on-year.

A bulk of this inflow, or 71.6 percent, was from investments in PSE-listed securities. The rest were investments in peso government securities and peso time deposits.

Top sources of investments for the month are the United Kingdom, United States, Singapore, Norway and Hong Kong.

On the other hand, around $1.299 billion in FPI exited the market in January, with the United States being the main destination of this outflow.