Friday, January 28, 2011
Philippine Markets: 28 January 2011
28 January 2011
USD/PhP: 44.10 PSEi: 3970.34 - 20.15
USD/JPY: 82.71 PFINC: 898.39 + 1.92
EUR/USD: 1.3705 BDO: 52.40 - 0.65
GBP/USD: 1.5891 BPI: 54.20 - 0.30
PDSTF3M: 3.3096 MBT: 66.60 + 1.30
Prices as of 12:00pm Source: Bloomberg, Reuters
Philippine Interest Rate Outlook
Secondary market rates were lower this week by an average of 76 basis points across the curve as correction sets in the market following expecations that BSP will not raise rates in the near-term. Most likely they will move as early as the second quarter. Other factors that forced a correction was the BTr's decision to reject rates at its latest auction, sending a clear signal to the market that low rates are still here supported by the strong liquidity and assurances from government officials that inflation will remain tame.
This correction has pushed the 3M PDST-F rate from a high of 4.1769 to the week's close of 3.3096, lowery by 82 bps week-on-week, while the 5Y PDST-F also behaved similarly to the 3M PDST-F falling from a high of 6.5269 to the week's close of 5.6058
Continue to expect sideways to upward movements in the week ahead of the January 2011 inflation figures , with the 3M PDST-F ranging between 3.00-4.00 percent levels. While the 5Y PDST-F rate is seen to range between the 5.50 - 6.25 percent.
Philippine Equities Outlook
Local stocks rose 0.49 percent week-on-week to 3970.34 for the first time in three weeks on bargain hunting activities. However, risk aversion resurfaced during the end of the week, reversing most of the week's gain due to lack of market moving news.
Chartwsie, the week's close at 3970.34 implies that the current rally is a mere pullback (as mentioned in the previous week, which may be limited to the 4,000-4,050 levels), a rally above the 4,150 level is needed to counter the current bear sentiment. Failure to see this in the week ahead could signal a resumption of the corrective trend testing the 3,800 -3,850 levels in the near-term.
Philippine Peso Outlook
As of 12:00pm, the local currency rose against the dollar compared to the previous week as the US dollar continued to slide against the major currencies, causing the greeback to perform weaker against emerging market currencies.
Chartwise, this week's movements is viewed as a mere correction of the emerging strong dollar trend against the peso, expect the 43.80-44.00 levels to hold in the week ahead, with an expectation to test the 44.50 in the near-term.. Only a break below the 43.80 levels will entertain further peso strength towards the 43.00 -43.50 levels.
BDO UNIBANK INC.
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
Morning Brief: 28 January 2011
Fed gives BSP room on rates THE US FEDERAL RESERVE’S decision to maintain its policy rate at near zero supports the Bangko Sentral ng Pilipinas’ (BSP) current stance of keeping its own rates at a record low, the central bank chief yesterday said. "The Fed move relieves some pressure off the consensus that has been building up that the US economy is at a pace of recovery which may lead the Fed to change its policy stance, and the effect of such development on inflation expectations and portfolio rebalancing out of EMs (emerging markets)," BSP Governor Amando M. Tetangco, Jr. said in a text message yesterday. "This is broadly in line with our own assessments and supports our current policy stance." In its final 2010 policy meeting last December 29, the Monetary Board decided to keep overnight borrowing and lending rates at 4% and 6%, respectively, as it noted that the inflation outlook remained favorable. The rates have not been adjusted since July 2009. The Federal Open Market Committee (FOMC), which decides on US monetary policy, kept its benchmark interest rate at 0-0.25% following a two-day meeting that ended Wednesday, saying the economy’s performance supported the policy of keeping rates low. "Information received since the FOMC met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions," it said in a statement. The FOMC also said it would continue with a plan -- announced last November -- to purchase $600 billion worth of long-term US Treasury securities until the second quarter of the year. Impact BSP Deputy Governor Diwa C. Guinigundo said that while the Fed decision could boost global economic momentum, it could also fuel more capital inflows to emerging markets such as the Philippines. "Short-term impact is to increase risk aversion and induce more FX (foreign exchange) inflows to emerging markets including the Philippines," Mr. Guinigundo said in a text message. "Long-term effect is expected to be more positive. Growth recovery in the US could be boosted, financial markets normalize, such that global prospects could be brighter," he said. "The risk, of course, is the fiscal costs associated with further quantitative easing." Watchful Mr. Tetangco said that while current monetary policy remained appropriate, the BSP would continue to be watchful of external developments. "[W]e continue to be mindful of changes in growth dynamics of our major trading partners, including the US and China, to see if any changes to our own policy stance are necessary," he said. The Monetary Board will next meet on February 10 to discuss policy. Inflation averaged 3.8% last year, hitting the central bank’s forecast and falling within the 3.5-5.5% full-year target.For 2011, the BSP has an inflation forecast of 3.6% and a full-year target of 3-5%. Inflation data for January will be released on February 4. The central bank has said inflation for the first month of the year could fall within a 2.7-3.6% range. -- reports from L. D. Desiderio and Reuters
South Luzon Tollways Corp. (SLTC) said the upward rate adjustment of about 4.5 percent would take effect one minute past midnight on Feb. 1. For class 1 vehicles or private cars, the toll will go up to P2.80 per kilometer from the current P2.68. This means motorists traveling the entire Alabang to Calamba length of the SLEx would have to pay P79 from the current P76. Class 2 or public utility vehicles, particularly buses, would have to pay P159 from the current P152. Trucks, which are class 3 vehicles, would be charged P238 from P228 today. An additional P22, P43 and P65, respectively, would be charged class 1, 2 and 3 vehicles that take the eight-km link between the SLEx and the Southern Tagalog Arterial Road (STAR). SLTC president Isaac David said the new rates would still be an average of 7.58 percent less the rates approved by the Toll Regulatory Board (TRB) late last year. The TRB had approved a 300-percent hike in SLEx toll rates to allow the SLTC, which is a subsidiary of Malaysia’s MTD Capital Berhad, to recover the P14 billion it had spent so far to develop and modernize the roadway. SLTC, however, decided to give motorists a break at the start of the year by raising the rates by only 250 percent. But the company said it would have to gradually raise the rates every month until April to bring the tolls to the approved level. SLTC was originally set to raise its rates in July last year, but was stopped by several court orders and foot-dragging by the regulator. SLTC, which is co-owned by the government through Philippine National Construction Corp., holds the right to manage and operate the SLEx up to 2036. The toll rates at the SLEx before the 300-percent increase was approved were P22 for class 1 vehicles from Alabang to Calamba, P43 for class 2 vehicles and P65 for class 3 vehicles. |
U.S. Stocks Advance on Earnings Reports, Home-Sale Data; Qualcomm Climbs U.S. stocks rose, with the Standard & Poor’s 500 Index gaining a fifth day, as home sales and Qualcomm Inc.’s forecast beat projections, offsetting Japan’s credit downgrade and higher-than-estimated jobless claims. Qualcomm rallied 5.9 percent as the biggest maker of mobile-phone chips benefited from more sales of devices that browse the Internet. An index of car companies in the S&P 500 advanced 2 percent after online researcher Edmunds.com forecast a 17.3 percent jump in the industry’s new sales in January. Netflix Inc. surged 15 percent as profit topped projections. Microsoft Corp. increased 0.3 percent after its quarterly results were released before exchanges closed. The S&P 500 rose 0.2 percent to 1,299.54 at 4 p.m. in New York. The index has gained 1.5 percent over its five-day advance. The Dow Jones Industrial Average added 4.39 points, or less than 0.1 percent, to 11,989.83.
Treasury notes and bonds gained after the U.S. sold $29 billion of seven-year notes at a yield lower than the one forecast by the primary dealers that are required to bid on the securities. The gap between U.S. 2- and 30-year yields had widened to almost a record, indicating investors are demanding greater compensation for the risk of rising inflation. “The Treasury’s actions have given the bill market a bid, as there will be somewhat less issuance in the front end,” said John Spinello, chief technical strategist in New York at Jefferies Group Inc., one of 18 primary dealers that trade with the Fed. “We are still seeing a steeper curve, and the steepness should stay with us. Investors have been shunning longer-dated debt in favor of the short as inflation concerns have begun to crop up.” Rates on one-month bills dropped as much as three basis points, the most on an intraday basis since Dec. 20, to 0.11 percent. They traded at 0.13 percent at 5:05 p.m. in New York, down two basis points, according to BGCantor Market Data. Three- month bill rates fell as much as two basis points, the most since Dec. 29, to 0.14 percent. One basis point equals 0.01 percentage point. The yield difference, or spread, between 2- and 30-year Treasuries widened to as much as 4.016 percentage points before trading at 3.991 percentage points. It reached 4.018 percentage points on Jan. 20, the steepest slope to the so-called yield curve since Bloomberg records on the data began in 1977. It was 2.995 percentage points in August. |
Oil Falls to Eight-Week Low in N.Y. After Jobless Claims Rise Crude oil fell to an eight-week low in New York, and slid to a record discount versus London’s Brent, as a bigger-than-forecast gain in U.S. jobless claims bolstered concern that the economy will be slow to recover. Futures dropped 1.9 percent after Labor Department figures showed applications for jobless benefits rose 51,000 to 454,000 last week. Orders for U.S. durable goods decreased in December. “The market has just collapsed,” said Stephen Schork, president of Schork Group Inc., a consulting company in Villanova, Pennsylvania. “The economic numbers today were horrendous. We’ve had one bearish headline after another since last week.” Crude oil for March delivery tumbled $1.69 to $85.64 a barrel on the New York Mercantile Exchange, the lowest settlement price since Nov. 30. Futures are up 16 percent from a year ago. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
Thursday, January 27, 2011
Morning Brief: 27 January 2011
Oil firms urged to cut diesel prices P1/liter discount for public utility drivers MANILA, Philippines—The Department of Energy is urging local oil companies to provide fuel discounts to public utility drivers to help cushion the impact of increasing oil prices on transport fares. Energy Undersecretary Jose Layug Jr. confirmed Wednesday that the DOE was in talks with Petron Corp. and Pilipinas Shell Petroleum Corp. on a possible discount of as much as P1 a liter for diesel. “We are already finalizing this. We expect that by next week, we could already start implementing the discounts,” Layug explained. However, he did not indicate the duration of the discounts as the parties were still threshing out the details of the program. A special lane would again be opened to public utility drivers specifically for this program, he added. Petron chairman Ramon S. Ang confirmed in a text message that the country’s biggest oil refiner and retailer would support the government discount program, but did not indicate the amount it was willing to provide. Pilipinas Shell confirmed that its Pepeng Pasada discount for jeepney drivers would be increased to P1 from the current 50 centavos per liter in selected stations. Prices of local petroleum products have been on an uptrend, with local firms implementing oil price increases five times since the middle of December last year. As of January 25, the price of diesel has risen to P41.60 a liter, regular gasoline to P49.64 a liter, and E10 gasoline to P53.52 a liter, according to the latest DOE oil monitor report. The same report showed that the price of Dubai crude rose $0.35 a barrel during the January 17-21 period compared with the previous week’s level. Prices of gasoline, diesel and kerosene, based on the Mean of Platts Singapore benchmark, similarly rose by $1.30 a barrel, $2.05 a barrel and $2 a barrel, respectively, during the same period compared with its averages in the previous week. According to the report, the fresh round of increases could be attributed to the demand forecasts released by the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA). “OPEC said it now expects world oil demand growth of 1.2 million barrels a day, or 1.4 percent, to 87.32 million barrels a day for 2011, referring to the magnitude and speed of the world economic recovery. On the other hand, the Paris-based IEA predicted oil demand this year to rise to 89.1 million barrels a day, up from 87.7 million barrels a day in 2010. Last month, IEA forecast oil demand to hit 88.8 million barrels a day,” the DOE report stated. “While world oil prices have also been driven by high oil demand in China, the move of the government of China to combat inflation is somehow keeping oil prices in check,” it added. The bourse yesterday formally launched its renamed PSEtrade system -- operational since July last year -- and its top official said that next in line would be linking up with five Association of Southeast Asian Nations (ASEAN) counterparts. "In the plan, by the end of the year you will have a system up and running with at least three participants. Others will come in 2013 and 2014," PSE President and Chief Executive Hans B. Sicat said in a briefing. The initial phase of the ASEAN electronic trading link will involve Singapore, Malaysia and Thailand, Mr. Sicat said, adding: "We look forward to [joining] early next year then Vietnam and Indonesia [will follow]." Representatives of the six exchanges finished a three-day meeting last Tuesday, he said. In February 2009, the PSE, Singapore Exchange, Bursa Malaysia, Stock Exchange of Thailand and the Indonesia Stock Exchange said the e-trading link -- which would also include the HoChiMinh Stock Exchange -- could go live in 2010. The six bourses signed an agreement in 2008 and at that time Thai officials said trading could begin as early as 2009. No explanation was given for the delay but the Philippines has said the tie-up would increase liquidity and boost investor participation in the local stock exchange. "There will be the ability where all stocks listed on the PSE will be bought by other people within ASEAN with ease," Mr. Sicat said. PSEtrade is the new name of the Nouveau Systeme de Cotation or NSC that was adopted last July 26. It replaced the Maktrade system that dated back to the unification of the Manila and Makati stock exchanges’ trading operations 15 years ago. "When the ASEAN linkage comes on board, we can say our system will be able to communicate with that ASEAN trading platform, something which would not happen with Maktrade," Mr. Sicat said. In another development, the PSE yesterday also announced that its board had elected former Trade Secretary Jose T. Pardo as independent director effective yesterday. Mr. Pardo was also appointed as chairman of the bourse’s Corporate Governance Committee. "He is a highly respected person in both the private and public sectors whose extensive professional experience will help push the PSE’s initiatives towards corporate governance forward," PSE Chairman Cornelio T. Peralta was quoted as saying in a statement. The PSE has 253 listed firms and 133 active trading participants. |
U.S. Stocks Rise as Dow Tops 12,000 on Fed Statement, Home Data U.S. stocks rose, sending the Dow Jones Industrial Average above 12,000 for the first time since June 2008, after the Federal Reservemaintained stimulus measures and new-home sales topped projections. Lennar Corp. and Standard Pacific Corp. rallied at least 2.1 percent. Alcoa Inc. and Schlumberger Ltd. advanced more than 2.2 percent as commodities prices climbed. DeVry Inc., the owner of for-profit schools, jumped 13 percent after profit beat analysts’ estimates.Boeing Co. slumped 3.1 percent after forecasting 2011 profit that trailed projections. The S&P 500 gained 0.4 percent to 1,296.63 at 4 p.m. in New York, rallying a fourth straight day. The Dow Jones Industrial Average added 8.25 points, or 0.1 percent, to 11,985.44 and reached 12,020.52 earlier. “I don’t know what more the stock market could have hoped for,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $550 billion. The Fed continues “to address the two pillars that guide monetary policy: inflation and employment, and they’re both under what the Fed would like to see. The Fed is going to maintain this course until the economy is well in a recovery.” The S&P 500 rallied for a fourth straight day and has climbed 24 percent since Fed Chairman Ben S. Bernanke said on Aug. 27 that he would take action to boost the economy. Among 120 companies in the index that have posted quarterly results since Jan. 10, 88 beat the average analyst earnings estimate, according to data compiled by Bloomberg. Since Jan. 21, SunTrust Banks Inc. and KeyCorp -- lenders based in Atlanta and Cleveland, respectively -- more than doubled forecasts, the biggest positive surprises.
Government securities dropped earlier after sales of new homes rose more than forecast in December and the U.S. sold $35 billion of five-year notes. Ten-year Treasury Inflation- Protected Securities show bondholders expect the consumer price index to increase 2.28 percentage points a year on average over the life of the debt, compared with a 1.7 percent rise forecast for this year by economists surveyed by Bloomberg News. “The $600 billion is going to continue,” said Richard Schlanger, who helps invest $20 billion in fixed-income securities as vice president at Pioneer Investments in Boston. “The focus is on the high unemployment rate, and until that dissipates a little bit, I think it is full speed ahead with their program.” Benchmark 10-year note yields climbed eight basis points, or 0.08 percentage point, to 3.42 percent at 5 p.m. in New York, according to BGCantor Market Data. The price of the 2.625 percent securities due in November 2020 fell 21/32, or $6.56 per $1,000 face amount, to 93 14/32. Thirty-year bonds yielded 4.59 percent, up 10 basis points. They increased as much as 12 basis points, the most on an intraday basis since Jan. 5. |
Oil Rises on U.S. New Home Sales Gain, Federal Reserve Outlook Crude oil climbed as new-home sales in the U.S. beat forecasts and Federal Reserve policy makers agreed to keep stimulus measures to bolster the U.S. economy. Futures increased 1.3 percent and equities rose after the Commerce Department said purchases of new homes surged 18 percent in December. The Fed reiterated today that $600 billion in debt purchases in its quantitative-easing program are needed through June. Oil dipped briefly after the Energy Department reported a larger-than-forecast gain in supplies. “A bit of economic bullishness can make a big difference in the market,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “There was nothing bullish in today’s inventory report.” Crude oil for March delivery rose $1.14 to settle at $87.33 a barrel on the New York Mercantile Exchange. It was the biggest increase since Jan. 11. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
Wednesday, January 26, 2011
Morning Brief: 26 January 2011
PH economy grew 7-7.4% in 2010 NEDA chief notes strong Q4 expansion By Riza T. Olchondra Philippine Daily Inquirer MANILA, Philippines—Economic growth likely surpassed the government’s target in 2010 as services, industry and agriculture expanded strongly in the last quarter of the year, the National Economic and Development Authority said Tuesday. The country’s gross domestic product (GDP) expanded between 6.2 and 7.2 percent in the fourth quarter, Economic Planning Secretary Cayetano Paderanga told reporters. With nine-month GDP growth at 7.5 percent (driven by election spending in the first half), the economy’s full-year expansion was placed at 7 to 7.4 percent for the whole year. The government aimed for 5-6 percent GDP growth in 2010. Services, which contributed nearly half of GDP, also performed well in the fourth quarter. Paderanga said the sector, which included the booming business process outsourcing, was estimated to have grown anywhere between 5 and 9 percent. Industry growth, which comprised about a third of GDP, grew at a “high single-digit” rate. Agriculture recovered in the fourth quarter, expanding by 6.35 percent, following crop losses in the previous quarters due to the El Niño dry spell. The farming sector slightly contracted (-0.12 percent) for the whole year despite a prolonged drought since early in the year and the spate of typhoons in the latter part of 2010. The agriculture sector, when combined with forestry, contributed almost 20 percent of domestic production. “We will try to attain that as much as we can. With the reforms coming in, perhaps it might be more achievable in 2012 than 2011, but we will still try to hit the target,” Paderanga said. “We will be missing the driver of election spending [but] the global environment is again improving and we hope that improves a lot. I think the numbers coming out of the US and Europe are slightly better than the numbers that were coming out in the last quarter,” Paderanga said. “Maybe sometime during the middle of the year, we will have a better idea of what else to do,” he said. Among the areas that might be evaluated were proposed public-private partnerships and their projected impact on economic growth. “What we’re actually trying to do is try to raise investment rates, so we hope that will add to the growth,” Paderanga said. The bomb placed under the seat in the middle of a passenger bus driven by a man ironically named Maximo Peligro went off just before 2 p.m. on Epifanio de los Santos Avenue (EDSA) near the north gate of the upscale Forbes Park subdivision in Makati City. Makati Mayor Junjun Binay said the explosion was so powerful that it punched a hole in a nearby concrete fence. “It appears that it was a big bomb that exploded but we’re still determining what kind of bomb,” said the Makati police chief, Senior Supt. Froilan Bonifacio. The explosion shattered the windows of the air-conditioned bus (Plate No. TXJ-710), which was approaching the loading bay on EDSA and Metro Rail Transit station on Gil Puyat (formerly Buendia) Avenue. Police said the sixth row on the right side of the bus sustained massive damage. The attack came two months after the United States and several other Western governments warned that a terrorist attack in Manila was imminent, and followed a bus hijacking in August last year that left eight Hong Kong tourists dead. The President said terrorists were behind the explosion that ripped through the bus. At a news briefing, Mr. Aquino said he received intelligence reports last year that “a Muslim secessionist group” was planning a “bombing” attack but did not have the resources to mount it. Wondering how the group was able to mount the attack, the President ordered a probe of the bombing. “Everybody can be assured that in the soonest possible time, like many other incidents such as the bar exam bombing, there will be a solution to this situation,” he said. Mr. Aquino expressed his sympathies to the families of those who died and who were wounded in the blast. When he arrived at the site 10 minutes after the explosion, Binay said he saw blood and severed body parts on the bus. He said he also saw a severely injured man through the big hole. Two of the victims were killed on the spot. The two others died in the hospital, police said. Both legs of a female fatality, who was yet to be identified, were cut off from the thighs, according to a survivor. “She must be at least 18 years old,” said Susanna Flores, among the seven passengers brought to Ospital ng Makati. She said the other fatality, Johansson De Leon Reyes, of Plaridel, Bulacan, was covered in blood and “his left leg was at a funny angle as if it had been broken off.” A woman whose identity is yet to be established, sustained a head wound. “I was told she jumped off the bus. She was the first to be wheeled into the hospital,” Flores said. Mary Grace Buen Borondia, 29, of Maybunga, Pasig City, was first brought to Ospital ng Makati but was later transferred to Makati Medical Center. Other casualties brought to Ospital ng Makati were identified as Anabel Gozon, 40, of Barangay Sampaloc, Tanay, Rizal; Antonio Lino, 41, of San Mateo, Rizal; Jeffrey Victoriano, 27, of Taguig City; and Irish Teniola, 22. Ten of the victims were taken to St. Luke’s Medical Center at Bonifacio Global City in Taguig. They were Roy Saguit Rivera, 40; Fe An Padilla Sy, 25; Fleur An Padilla Sy, 48; Aiza Hutalle Peralta, 26; Virgilio Aquino Reyes, 76; Paul Richard Obial Reyes, 41; Jennifer Valdez Andoque, 19; Veronica Sanchez Gando, 24; and Gloria Aquino Reyes, 71. An investigation report issued by the Makati police Tuesday night said the fatalities were Johansson De Leon Reyes, who died on the spot; Mariano Magayaw Salustiano, 57; Shirley Khristel Hausena Andes, a female wearing a silver necklace marked “Krish” and an unidentified man brought to St. Luke’s who died while being treated. The report was signed by Chief Insp. Genaro Peruda, staff duty officer. A doctor said those who survived the blast sustained minor injuries, mostly in the feet. “Basically these are minor injuries. We haven’t seen anyone with a fracture,” said Dr. Joven Cuanang, chief medical officer at St. Luke’s Medical Center. Maximo Peligro and Michael Haralde, the driver and conductor of the bus, respectively, were taken into police custody for investigation. At a Makati police station, Peligro said he smelled gunpowder right after the blast. “If it was a normal explosion, there would be no smell of gunpowder,” he told reporters. He discounted mechanical failure as the cause of the explosion, saying that the bus was well-maintained. Peligro, who was unharmed, said that the bus windshield was not damaged by the explosion. He said he kicked it to enable him and the other passengers to get off the vehicle. He said two men, who acted strangely, quickly got off the bus just moments before the explosion. “They were moving from one seat to another although we had no idea there was an explosive aboard,” Peligro said. Haralde said the two men hopped on the bus in Baclaran, Parañaque City, took seats in the middle section and got off on Evangelista Street in Makati. Haralde, who sustained injuries on both legs, said the bus had 20 passengers when it left Baclaran. It became almost full when it stopped at a loading bay on Evangelista. He said almost half the passengers disembarked at EDSA Ayala. The driver and the conductor said the explosion happened before the bus reached EDSA corner Buendia. Authorities are considering an improvised explosive device as the cause of the blast. “We have yet to gather all the debris and reconstruct the fragments to categorically determine what type of explosive material was used,” said Director Nicanor Bartolome of the National Capital Region Police Office. Bartolome said the footage taken by the closed-circuit television (CCTV) camera of the Metropolitan Manila Development Authority (MMDA) would be a big help. MMDA Chair Francis Tolentino said the agency had turned over copies of footage from its CCTV cameras to investigators hoping to find out the identities of the suspects. For more than four hours, the road from Ayala to Buendia was closed off to traffic to allow police to examine the scene, resulting in heavy buildup of vehicles along the northbound at grade section of the Skyway and along EDSA from Roxas Boulevard. The bus was moved to the Southern Police District (SPD) in Taguig City at 7:45 p.m. where investigators will conduct further technical investigation of the vehicle. Mr. Aquino inspected the bus half an hour later for about 15 minutes. He was joined by Bartolome and Chief Supt. Jose de los Santos of the SPD. He visited the victims at St. Luke’s Medical Center Tuesday night. With a report from Agence France-Presse |
U.S. Stocks Erase Losses Amid Optimism About State of the Union Speech U.S. stocks erased losses in a late- session rebound that sent the Standard & Poor’s 500 Index higher for a third day as investors speculated President Barack Obama will announce plans to stimulate the economy. Verizon Communications Inc. and Travelers Cos. added at least 1.1 percent after reporting earnings that beat analysts’ estimates.Harley-Davidson Inc., the biggest U.S. motorcycle maker, rose the most in more than three months after its fourth- quarter loss narrowed and its financial-services unit posted a profit. American Express Co. and Johnson & Johnson, which helped lead the market lower earlier, lost more than 1.7 percent after reporting earnings that disappointed investors. The S&P 500 rose less than 0.1 percent to 1,291.18 at 4 p.m. in New York after slumping as much as 0.8 percent earlier. The Dow Jones Industrial Average lost 3.33 points, or less than 0.1 percent, to 11,977.19, reversing most of a 82-point decline. “People tried to take the market lower, but the bulls did not let it happen," said Alan Gayle, senior investment strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees $52.5 billion. ‘‘The trend for stocks is up. There are also some expectations on what the State of the Union address will be. Some people didn’t want to go short on a day like today."
The government’s sale of $35 billion of two-year notes attracted more demand than the average of the last 10 auctions of the securities. Obama will call in his State of the Union speech for the spending freeze as a way to reduce the federal government’s budget shortfall, according to Melody Barnes, director of the president’s domestic policy council. The Federal Reserve bought $7.7 billion of Treasuries to help spur growth. “It’s too early to tell whether words will turn into action, but the market is romancing the concept,” said Russ Certo, a managing director and co-head of rates trading at Gleacher and Co. in New York. “In a risk-off day with equities low, the auction coming in on the screws, aggressive buying from the Fed and a preamble to the State of the Union news, Treasuries have responded with a bid.” Thirty-year bond yields tumbled as much as nine basis points, the most on an intraday basis since Dec. 31, before trading at 4.49 percent at 5:15 p.m. in New York, down seven basis points, according to BGCantor Market Data. The price of the 4.25 percent security due in November 2040 rose 31/32, or $9.69 per $1,000 face amount, to 96 1/32. One basis point is 0.01 percentage point. The benchmark 10-year note yield dropped as much as 10 basis points, the most since Dec. 29, to 3.31 percent. The current two-year yield fell five basis points to 0.58 percent. |
Oil Trades Near Eight-Week Low on Signs of Slowing Fuel Demand Crude oil traded near an eight-week low because of concern fuel demand will be curbed amid signs of slowing economic growth in the U.S. and the U.K. Oil was near $86 a barrel in New York after tumbling 1.9 percent yesterday as U.S. residential real estate prices declined by the most in a year in November in an S&P/Case Shiller report and U.K. gross domestic product unexpectedly shrank in the fourth quarter. Futures for March delivery declined traded at $86.29 a barrel, up 10 cents, on the New York Mercantile Exchange at 7:29 a.m. Singapore time. Prices closed at $86.19 yesterday, the lowest settlement since Nov. 30. Futures are down 5.5 percent this year. Brent crude for March settlement slid $1.36, or 1.4 percent, to $95.25 a barrel on the London-based ICE Futures Europe exchange yesterday. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
Scheduled Power Interruption on Sunday, January 30, 2011
CAGAYAN ELECTRIC POWER & LIGHT CO., INC
Important Notice to CEPALCO Customers
Subject: Scheduled Power Interruption on Sunday, January 30, 2011
The Cagayan Electric Power & Light Co., Inc. (CEPALCO) would like to inform all customers that power supply will be interrupted on JANUARY 30, 2011 as shown below:
| Reasons: | TO FACILITATE THE REPLACEMENT OF SUSPENSION INSULATORS AT THE 69KV STRUCTURES AT APLAYA, JASAAN. CEPALCO WILL ALSO CONDUCT OTHER LINE MAINTENANCE WORKS ALONG THE AFFECTED AREAS.
|
| Date:
| Sunday, January 30, 2011 |
| A. Interruption Time: | 7:00 AM – 6:00 PM (11 hours)
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| Affected Areas: | M2 - NPC APLAYA SUPPLY (JASAAN -TAGOLOAN 69-KV CIRCUIT): 1. Resins Inc., Jasaan 2. All the barangays of Jasaan excluding Villa Mila Subdivision.
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| B. Interruption Time: | 7:00 AM – 8:30 AM (1 hour & 30 min); switching works 4:30 PM – 6:00 PM (1 hour & 30 min); switching works
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| Affected Areas: | M2 - NPC APLAYA SUPPLY (JASAAN -TAGOLOAN 69-KV CIRCUIT): 1. SWL Enterprises, Mohon, Tagoloan. 2. Cargill Plant, Villanueva
TAGOLOAN FEEDER #1 AREAS: 1. Portion of Natumulan down to Casinglot, Tagoloan. 2. All the Barangays of Bugo, Puerto, Tin-ao, Agusan, Tablon, Baloy, Cugman, Gusa, and greater portion of Lapasan. 3. Portion of Lapasan-Camaman-an road from Recto Ave. towards Limketkai Commercial Center including Grand Caprice Restaurant 4. All of Osmeña St. and portion of Cogon Market Area including Roxas St. towards portion of JR Borja St. 5. Upper Gusa, Indahag, Malasag, FS Catanico and Balubal. 6. Agora Market area including Gaabucayan St. 7. DMPI plantation, MENZI Agri, etc.
TAGOLOAN FEEDER #2 AREAS: 1. Portion of Natumulan, greater Tagoloan proper, all the Barangays of Baluarte, Pulot, Sugbongcogon, and Gracia, Tagoloan. 2. All the Barangays of Sta. Cruz, Mohon, Sta. Ana, and Sto. Rosario, Tagoloan including Kimaya, Villanueva. 3. All the barangays of Villanueva.
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| Power will however be restored immediately without further notice when maintenance works are completed earlier than scheduled. |
We hope the affected customers and the public in general
will be guided by this announcement. Thank you.
| Released by: | Ms. Marilyn A. Chavez Senior Manager Customer & Community Relations Dept. |
Tuesday, January 25, 2011
INCOME TAX FORUM ON JAN. 27 @ 1:30-5:00PM at OROCHAMBER OFFICE
TO ALL MEMBERS:
Your Chamber-- the OroChamber, in partnership with the Bureau of Internal Revenue (BIR) Regional Revenue Office No. 16 will hold a forum on Income Tax this Thursday, January 27, 2011 at 1:30-5:00pm at the OroChamber-PUM Conference Room, Macapal Drive, Pueblo de Oro Township, this city.
The half-day Forum will highlight the most recent regulations and guidelines on Income Taxes to update businessmen and accounting professionals.
The event is FREE OF CHARGE for Chamber members in Good Standing. For more details and related queries, please call the ORO CHAMBER Office and look for Ms. Mozell Nabua.
Morning Brief: 24 January 2011
Exporters see catch-up year EXPORTERS OF FOOD, garments and furniture expect faster sales growth this year contrary to forecasts of a general correction, industry officials said late last week. Trade barriers, raw input shortages and foreign exchange costs, they explained, had prevented these sectors from mimicking last year’s sharp rebound by the electronics sector. Roberto C. Amores, president of the Philippine Food Processors and Exporters Organization, said 2011 food export sales could grow by a brisker 10-15% this year versus the 8.6% increase to $846 million as of November 2010. Garment export sales could similarly rise by 12-15% in 2011, possibly surpassing the 12% increase seen with a month left to last year, Confederation of Garment Exporters of the Philippines Executive Director Teresita Jocson-Agoncillo said in a separate interview. Furniture shipments are also expected to enjoy faster sales growth this year, Chamber of Furniture Industries of the Philippines President Joy C. Cancio said. This contrasts with government projections of a slower 13% growth in total export sales this year from the 34.5% surge seen as of November 2010. The official target tracks the performance of electronics, the top export earner, which is expected to post just 10% sales growth versus the 42% spike seen so far last year. "Semiconductor exporters do not use indigenous raw materials. We have very low supply of raw materials [in comparison]. That’s why we didn’t grow much last year and we have more room to grow now," Mr. Amores said, noting that weather disturbances had caused a shortage in farm crops. "We have many problems with raw materials. Our local source of wood is limited," Ms. Cancio echoed. Mr. Amores added: "we’re very sensitive to foreign exchange movements and non-tariff measures." Exporters that use locally made inputs transact mainly in peso and were thus hurt when the currency strengthened against the dollar in the second half of 2010, making their goods more expensive. Electronics, in contrast, are assembled from imported components. Food, garment and furniture exports are also slapped with higher tariffs and stricter product safety standards while electronics enjoy duty-free entry under the World Trade Organization’s Information Technology Agreement. Coming from a low base, faster growth is likely this year, the officials said. "I expect it will be better because we came from a slump," Ms. Cancio said. "These goods are basic necessities," Ms. Jocson-Agoncillo said. But as with other policies aimed at developing the industry, tax perks will only be given to airlines from countries that do the same for carriers from the Philippines. Deputy Executive Director Porvenir Porciuncula of the Civil Aeronautics Board (CAB) said the regulator recently met with the Bureau of Internal Revenue (BIR) to discuss the taxes imposed on foreign airlines operating in the Philippines. The government earns an estimated P3.2 billion by imposing a 3-percent common carriers tax on gross receipts and a gross Philippine billings tax of 2.5 percent. The duties have made the country an unattractive market for foreign airlines, especially those from Europe, which operate longer flights and have higher ticket prices, in turn requiring them to pay more taxes. The European Chamber of Commerce of the Philippines has called on the government to scrap the “onerous” taxes. By doing so, the group said more airlines from Europe would consider flying to the Philippines, which would support the government’s programs to increase tourist arrivals and spur investments. “We’ve had meetings with the BIR and the Bureau of Customs. They seem willing to cut the taxes,” Porciuncula said. “But it will have to be on a case-to-case basis because some countries also charge similar taxes on foreign airlines,” he said. “It will have to be reciprocal.” Earlier, the CAB said it would also prioritize reciprocity in implementing the government’s planned “open skies” regime, which would make it easier for foreign airlines to gain rights to fly to the Philippines. The CAB said this privilege would only be extended to airlines that come from countries that are just as open to Philippine carriers. Today, Dutch flag carrier KLM is the only European carrier with direct flights to the Philippines. No local airline has flights to Europe. The route is currently dominated by Middle Eastern carriers, which are able to offer lower ticket prices because they are able to buy fuel at a discount. There is also a standing ban on Philippine carriers from flying to Europe—a result of the government’s inability to enforce minimum international safety standards. |
Earnings onslaught coming - but Wall Street may not care NEW YORK (CNNMoney.com) -- Nearly half of the companies in the Dow Jones industrial average are scheduled to release quarterly reports this week, and expectations are very high. But don't be surprised if stocks have a muted reaction to stronger-than-anticipated profits and sales. The stock market has grown "complacent," traders say, and it's going to take more than blockbuster earnings and strong economic data to move it higher. What that could be, though, no one was certain. The Dow added 1.2%, while the S&P 500 ended last week flat. The Nasdaq, which is looking particularly tired, fell 1.7% over the last five trading days. "There's a level of complacency in the market, and some of the contrary indicators suggest the market is overbought," said Nick Kalivas, vice president of financial research at MF Global. "Even if the news next week is favorable, it might not translate to higher prices." The weakness in tech last week -- which came despite blowout quarterly reports from IBM (IBM, Fortune 500), Apple (APPL) and Google (GOOG, Fortune 500) -- is indicative of the market's fatigue, said Kalivas. This week investors will have a slew of top-tier reports to sort through, including numbers from 13 Dow components. Investors are also expecting this week's statement from the Federal Reserve to be a snooze. The central bank is widely expected to leave its benchmark interest rate unchanged when it wraps up a two-day meeting on Wednesday.
Still, she said the stock rally that started in August has been driven largely by the Fed's stimulus efforts. In the weeks ahead, she added, "the smart money" will be looking for signs the economy can stand on its own two feet. On the economic front, reports are due this week on housing and consumer confidence, as well as an early reading on fourth-quarter gross domestic product. The economy has been showing signs of strength recently, with many economists raising their forecasts for 2011. But there is still much skepticism about how the economy will fair as government stimulus programs fade. "If it turns out that the economy needs another round of government aid in the form of liquidity, I think you'll start to see the market decline into the summer as investors send a message to the Fed," said Doolittle. Monday There are no economic reports on the agenda, but quarterly results are due in the morning from fast food giant and Dow stock McDonalds (MCD, Fortune 500). Three challenges to McDonald's growth After the market closes, fellow Dow company American Express (AXP, Fortune 500) is scheduled to release results. In addition, transporter CSX (CSX, Fortune 500) and technology company Texas Instruments (TXN, Fortune 500) are among the others scheduled to report. Tuesday The Case-Shiller November index of home prices in 20 major U.S. markets comes out before the market opens. The Conference Board, a business research group, will release its January report on consumer confidence shortly after the opening bell. There are five Dow stocks scheduled to report earnings in the morning, including 3M (MMM, Fortune 500), DuPont (DD, Fortune 500), Johnson & Johnson (JNJ, Fortune 500), Travelers (TRV, Fortune 500) and Verizon (VZ, Fortune 500). Yahoo (YHOO, Fortune 500) is one of the companies slated to report after the bell. Wednesday The Federal Reserve is widely expected to hold its benchmark interest rate near rock-bottom when it concludes a two-day meeting Wednesday. A policy statement is expected around 2:15 p.m. ET. New home sales data are due after the market opens from the Commerce Department. Economists expect sales rose to an annual rate of 300,000 in December from 290,000 in November, according to consensus estimates from Briefing.com. Also before the bell, results are due from blue chips Boeing (BA, Fortune 500) and United Tech (UTX, Fortune 500). ConocoPhillips (COP, Fortune 500), US Airways (LLC) and Xerox (XRX, Fortune 500) are some of the other companies scheduled to release earnings and sales figures. After the close, coffee chain Starbucks (SBUX, Fortune 500) is slated to report. Thursday The government's weekly report on initial claims for unemployment benefits comes out at 8:30 a.m. ET, along with data on durable goods orders in December, and pending home sales in November. AT&T (T, Fortune 500) and Caterpillar (CAT, Fortune 500) are the Dow stocks reporting results Thursday morning, along with DR Horton (DHI) and Eli Lilly (LLY, Fortune 500). Microsoft (MSFT, Fortune 500) and Amazon (AMZN, Fortune 500) are up after the bell. Friday An advance reading on fourth-quarter U.S. gross domestic product is due before the market opens. Economists are forecasting a 3.8% annual rate of growth, up from 2.6% in the third quarter. Chevron (CVX, Fortune 500), a Dow stock, and Ford (F, Fortune 500) and Honeywell (HON, Fortune 500) report results in the morning. After the market opens, the University of Michigan will release its final report on consumer sentiment in January. |
Oil Falls a Fourth Day in New York on U.S. Supplies, Chinese Rate Outlook Crude oil fell in New York for a fourth day, the longest losing stretch in nine weeks, on rising U.S. stockpiles and speculation China will increase interest rates to curb inflation. Oil dropped 0.5 percent after the Energy Department said that U.S. crude and fuel supplies rose last week. Prices climbed earlier as German business confidence unexpectedly climbed to a record in January amid booming exports to Asia and French business confidence surged. “There were a lot of people betting on $100 oil, but it looks like they were a little optimistic,” said Kyle Cooper, director of research for IAF Advisors in Houston. “Oil at $90 is actually looking a little high, given that inventories are in pretty good shape and demand isn’t that great.” Crude for March delivery slipped 48 cents to settle at $89.11 a barrel on the New York Mercantile Exchange. The contract fell as much as 72 cents to $88.87 earlier. Futures are up 17 percent from a year ago. The March contract in New York declined 3.7 percent this week. The February contract expired yesterday after dropping 2.2 percent to $88.86, the lowest settlement since Jan. 7. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
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