Net foreign buying of RP stocks up

Buoyed by the country’s improving fiscal position and continued economic expansion, net foreign buying in the stock market surged 109.6 percent in the first five months of the year to P25.01 billion, from only P11.93 billion in the same period a year ago.

Net foreign buying means foreign investors bought more stocks than sold them during a given period.

Total foreign buying reached P141.15 billion, up 35 percent from P104.61 billion while foreign selling amounted to P116.14 billion compared with only P92.68 billion the previous level.

At the same time, Philippine Stock Exchange (PSE) president Francis Lim said stock prices, as tracked by the main index now renamed the PSEi, went up to 2,296.11 in the first five months of the year, or 9.5 percent higher than the 2,096.04 level at the end of 2005.

Value turnover for the period January to May 2006 hit P213.45 billion, up 8.6 percent from P196.47 billion in the same period last year while average daily value turnover reached P2.03 billion from P1.56 billion in 2005.

Total market capitalization, on the other hand, amounted to P6.8 trillion or 14.2 percent higher than the P5.95 trillion at the end of 2005.

Lim said all sectors, except industrial, posted double-digit growth in their indices. The financial , holding firms, property, and services indices rose 21.9 percent, 19.8 percent, 20.1 percent and 12.2 percent, respectively.

Mining and oil issues posted the biggest increase with the mining and oil index growing 61.75 percent to 4,483.255 in May from 2,771.77 at the end of 2005.

"Our performance so far this year confirms the increasing commitment of investors towards the local stock market. I believe this is a vote of confidence from the investors about the country’s economic health," Lim said.

"I am optimistic we have enough momentum to push stock prices higher and promote more trading activity. Thus, I am confident the market in 2006 will enjoy a performance that is definitely better than last year’s, Lim added.

Companies in the telecommunications industry grabbed the biggest slice of daily value turnover at P565.6 million, or 30 percent higher than the P434 million recorded a year earlier. But listed firms in the transportation service and oil businesses posted the highest increase in average daily value turnover at 911.4 percent and 801 percent, respectively, or from only P9.7 million and P1.9 million, respectively, in the first five months of last year to P98.1 million and P17.1 million, also respectively, for the same period this year.

The bulk of market capitalization remained concentrated on the financial sector. Based on the PSE review, the market capitalization of this sector increased by 13.3 percent to P4.8 trillion.

The services sector followed with a P643.3 billion market capitalization, which was 17.1 percent higher than its level a year ago.

Meanwhile, the mining and oil sector registered the highest growth rate in market capitalization with a 50-percent rise in market valuation from P31.6 billion to P47.4 billion.