The Philippine stock market hit a record high on Tuesday, helped by foreign buying, but most other Southeast Asian markets fell as cautious investors stayed on the sidelines ahead of a Fed decision on quantitative easing measures.
Net foreign inflows of $8.6 million helped take the Philippine index to a record close of 4,341.74, surpassing its previous high from October 26. "Local investors are optimistic on quantitative easing as it will help to see new flows of foreign funds into the market as well as to the region," said Grace Crisostomo-Cerdenia, the chief operating officer at Manila-based Yapster e-trade. However, other markets in the region ended mixed as investors were wary of the size and the impact of the QE measure, which will be decided when a Federal Reserve meeting ends on Wednesday.
Indonesia fell 0.5 percent, Malaysia edged down 0.2 percent, and Vietnam ended 1.1 percent weaker. Bucking the trend, Singapore rose 0.4 percent and Thailand edged up 0.2 percent, hitting another 14-year high, despite a net outflow of foreign funds worth $25.2 million.
"Markets are keen to see whether it is $500 billion or $1 trillion. Anything below $500 billion may create negative investor sentiment," said Pichai Lertsupongkij, head of sales at Thanachart Securities in Bangkok, referring to the Fed package.
Analysts and economists expect significant funds from any new QE measure to flow into emerging markets and the Southeast Asian region should see an increase in foreign inflows. Foreign buying has helped drive the markets in the region in the past 12 weeks, with Thailand enjoying $2.1 billion in net foreign inflows during that period, the Philippines $916 million and Indonesia $759 million up until October 29, Nomura Research data showed. Analysts said the valuations of each market would be the key factor for future foreign inflows once the QE is decided.
On Tuesday, Jakarta saw a net foreign outflow of $5.1 million. A fall in the region's best market with a return of 43 percent this year was led by a 4 percent drop in index heavyweight Telekom Indonesia and a 1.6 percent loss in the country's leading automotive distributor, Astra International. Shares in Matahari jumped 4.9 percent as South Korea's Lotte Shopping and Carlyle Group submitted bids to buy the Indonesian firm's Hypermart business, which the group is trying to sell for $1 billion.
In Bangkok, PTT Chemical, which rose 4.4 percent, led the index rise. Bucking the trend, top energy group PTT, which during trade said it planned to spend about 1 trillion baht ($33.50 billion) on investment from 2011 to 2015, mostly on its petroleum business, edged down 0.3 percent. In Manila, Bank of the Philippine Islands (BPI), which posted a 75 percent rise in quarterly net profit, rose 1.5 percent.