Volatility, hot money and new BIR chief

Buckle up. The smooth ride is over; it’s time to embrace volatility. After all, that’s just the nature of the beast. Or at least, that’s what Bangko Sentral ng Pilipinas Gov. Amando Tetangco Jr. is saying. It’s probably just a nice coincidence that several business stories indicate that the private sector is on the same page.

If you missed reading the business pages in the last 24 hours, you should at least read these:

$246M in ‘hot money’ fled RP in Aug.
Peso continues to strengthen, closes at P46.47:$1
MANILA, Philippines — Some $246.44 million in net foreign investments in stocks and bonds fled the Philippines in August due to global market jitters triggered by the worsening US housing slump, the Philippine central bank reported Thursday.

MoneySmarts: Hot money has nothing to do with the weather, nor hot ladies. When reading business stories, simply remember that hot money comes mostly from foreigners interested in making a quick buck in Philippine stocks, bonds and money markets. The Philippine stock market is quite dependent on them, that is why we are vulnerable to things like the subprime mortgage mess in the US and anything that makes first world economies sneeze. The more technical terms for ‘hot money’ are short-term capital flows or portfolio investments.

Shares close lower on oil surge, political concerns
MANILA, Philippines — Shares closed lower Thursday, unable to sustain early gains as caution prevailed after oil prices shot up to fresh record levels and a day after the anti-graft court handed down its guilty verdict in the six-year corruption trial of former president Joseph Estrada. Investors continued to gauge public reaction to the Estrada verdict while waiting for fresh cues from overseas markets ahead of the Federal Reserve’s policy meeting on Sept 18.

Euro climbs to record $1.3920
LONDON — The euro rose to a fresh record high against its US rival on Thursday, reaching $1.3920 dollars in early European trade. The European single currency had Wednesday topped the $1.39-level for the first time on market expectations that the US Federal Reserve will next week begin trimming interest rates.

Asian stocks gain, dollar soft on US rate view
TOKYO — Most Asian stocks rose on Thursday with energy stocks higher as oil held near a record peak above $80, while expectations of an US rate cut next week pinned the dollar near an all-time low versus the euro.

Metrobank investment unit less upbeat on stock market
MANILA, Philippines — First Metro Investment Corp. (FMIC), the investment banking arm of Metrobank, the country’s largest bank, expects the stock market index to hit 3,500 by the end of the year and not 4,000 as earlier expected. FMIC lowered its forecast primarily due to fears of an economic slowdown in the United States, the country’s main trading partner.

Central bank bracing for volatility
RP can handle fluctuations, Tetangco says
MANILA, Philippines — The Philippine central bank is bracing for further volatility in the financial markets, but says the country is strong enough to withstand the worst of its effects. “The current macroeconomic environment is the most stable we have seen in over a decade,” Bangko Sentral ng Pilipinas (BSP Governor Amando Tetangco Jr. said Wednesday in an economic briefing. He stressed that the country’s economy was strong enough to withstand increased volatility and the perils brought about by the growing global aversion to emerging markets.

MoneySmarts: Financial markets and the economy in general go through periods of boom and bust. That’s just the way it is. Media likes to write about every market hiccup as if the sky is falling. That kind of reporting sells newspapers, after all. But the truth is, markets are more resilient than most of us think.

Now here’s a firm who doesn’t seem to mind the volatility.

Firm aims to make a splash in the stock market
MANILA, Philippines — A Philippine company that took off selling hair spray in the 1980s and is named after that decade’s romantic comedy “Splash” aims to take its fortunes a step further by listing on the stock market next year. Splash Corporation, the country’s largest Filipino-owned personal care and cosmetics company, began as a P12,000-backyard business over two decades ago before growing into a multi-billion peso firm competing with the likes of Unilever and Procter & Gamble Co.

Miscella-news

Hefti is new BIR chief
MANILA, Philippines — Malacañang has appointed Lilian Hefti as commissioner of the Bureau of Internal Revenue (BIR) after the tax collecting agency met its revenue goals in July and August.

MoneySmarts: I learned from Transparency Accountability Network chief Vincent Lazatin that Hefti is shaking things up a bit at the BIR in a good way. That probably means she is not going to stay long, he says with a naughty smile on his face.

CTPL system seen to work just fine
MANILA, Philippines — Nonlife insurance firms claimed that the temporary system established recently to regulate the compulsory third-party liability (CTPL) business has curbed the sale of fake CTPL policies. The Philippine Insurers and Reinsurers Association Inc. (PIRA) said complaints against fake CTPL policies have subsided since the interim solution was put in place two months ago.

Hope these news flow can turn into cash flow for you. Tagline courtesy of CNBC.

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