Philippine Markets: 04 March 2011

04 March 2011

USD/PhP: 43.28 - 0.085 PSEi: 3882.71 + 48.66
USD/JPY: 82.43 PFINC: 850.81 + 4.56
EUR/USD: 1.3959 BDO: 48.90 + 0.90
GBP/USD: 1.6284 BPI: 53.70 - 0.90
PDSTF3M: 1.7012 MBT: 60.60 + 1.60
Prices as of 4:00pm Source: Bloomberg, Reuters


Philippine Interest Rate Outlook

Secondary market rates moved sideways week-on-week despite higher than expected February inflation at 4.3 percent and the recent statements from BSP that the window of keeping interest rates steady has narrowed. Market participants continued to focus on the market liquidity present in the system. This is keeping short-term interest rates at the low side.

Expect interest rates to creep upwards in the coming weeks.


Philippine Equities Outlook

Local shares moved up 3.90 percent to 3882.71 as bargain hunting activities dominated investor sentiment as market deemed last week’s slump was overdone. Strong US economic data also supported recent rally. However, the rising global commodities continue to fuel inflation concerns which could cap market's rally near the 3,925- 3,950 levels.

Chartwise, the week’s close at 3882.71 suggests the market has still some gas to try the 3,950 levels. Failure for the market to clear said levels could trigger some profit taking activities.Immediate support lies at the 3,800 support levels.


Philippine Peso Outlook

The local currency rose 0.98 percent week-on-week to 43.28 as the dollar weakened against major currencies. Rally in emerging market stocks also helped buoy sentiment.

Chartwise, the week’s close at 43.28 implies further tests of the 43.00 - 43.25 levels. However, failure for the market to break below the 43.00 levels could call for a retest of the 43.50 - 44.00 levels in the near-term.


BDO UNIBANK INC.

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher
(632) 858-3001