MARCHASIA BUSINESS OUTLOOK8FOREIGN INVESTORS SPLURGE ON JAPANESE BONDS AS BOJ ENDS NEGATIVE RATESPHILIPPINES SECURES INVESTMENT PLEDGES FROM GERMAN AND AMERICAN FIRMSForeign investors significantly increased their purchases of Japanese bonds last week, acquiring a massive 1.15 trillion yen (about $7.8 billion) of long-term Japanese bonds on a net basis. This marks the largest weekly net purchase since early April 2023, according to data from the Ministry of Finance. Additionally, Japanese short-term debt securities drew a net 2.22 trillion yen in overseas capital last week after about 2.75 trillion yen of net purchases in the prior week.The Bank of Japan is expected to debate ending its negative interest rate policy next week, depending on the outcome of Friday's preliminary survey on big firms' wage talks. This potential shift marks a significant departure from its decade-long stimulus programme. Yields on one-year Japanese treasury bills have risen by 8 basis points in 2024 to nearly a decade high of 0.067 per cent, while six-month yields, negative for eight years, rose above zero last week.In the equity market, overseas investors were net buyers of Japanese equities for a second consecutive week, securing 198.35 billion yen in stocks despite shares pulling back from record highs. The Nikkei share average shed about 0.56 per cent last week, ending its five-week-long winning streak. Foreign investors bought cash equities and derivative contracts of about 176.39 billion yen and 21.96 billion yen, respectively, on a net basis last week.On the other hand, Japanese investors secured about 1.58 trillion yen of long-term foreign bonds, recording the largest weekly net purchase since Jan. 12. They also invested approximately 6.6 billion yen into short-term debt instruments. Conversely, domestic investors pulled roughly 616.5 billion yen out of foreign equities as they extended net selling into a second consecutive week. The Philippines has recently secured approximately US$5 billion in investment pledges from German and American firms, representing significant potential gains for the country in sectors such as healthcare and energy. President Ferdinand Marcos Jr, during his three-day working visit to Germany, finalized investment pledges totaling $4 billion from German companies. This follows commitments of over $1 billion from American firms.Among the notable investments, private equity firm KKR & Co has pledged $400 million for telecoms tower operations and expansion in the Philippines. Ally Power, a startup, announced a $400 million deal with power utility Manila Electric Co to construct a hydrogen and electric refueling station. Additionally, Microsoft is collaborating with the Philippine central bank and ministries to leverage AI products to enhance productivity.In Germany, the Philippines inked eight investment agreements encompassing solar cell manufacturing, automotive modification, and military-grade armoured personnel carriers production. Other agreements include the potential development of a hospital training center, innovation hub, digital healthcare partnership, and farmland rehabilitation.Despite historic challenges in attracting foreign investment due to issues like red tape, weak infrastructure, and policy uncertainty, these recent investment pledges signify a positive step forward for the Philippines. In 2022, the country attracted $12 billion in foreign direct investments, trailing behind Vietnam's $15.7 billion and Indonesia's US$21.1 billion, according to data from the Association of Southeast Asian Nations website. NEWSROOM
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