Philippine Markets: 15 April 2011

15 April 2011

USD/PhP: 43.22 PSEi: 4251.64 + 16.68
USD/JPY: 83.38 PFINC: 945.18 + 1.40
EUR/USD: 1.4470 BDO: 53.10 + 0.20
GBP/USD: 1.6340 BPI: 58.75 - 0.10
PDSTF3M: 0.9865 MBT: 68.35 + 0.10
Prices as of 12:00pm Source: Bloomberg, Reuters

Philippine Interest Rate Outlook

Secondary market rates moved down by an average of 11 basis points week-on-week. Market liquidity remains the key reason for drop in yields despite lingering inflation concerns due to pervasive increase in commodity prices. Expect short-term yields to remain on the low side with downward bias while the rest of the tenors are expected to move sideways next week.

Philippine Equities Outlook

Local stocks slightly moved higher to 4251.64 after dropping to 4160.42 this week. Investor optimism was prevalent due to positive earnings outlook and resilient global equity markets. However due to the long holiday in observance of Paschal Triduum, expect market to consolidate during the three-day trading week.

Chartwise, the close at 4251.64 suggests range trading between 4,200 – 4,300 levels next week.

Philippine Peso Outlook

The local currency remained in 43.00 – 43.50 range this week as weakness of US dollar against the major currencies offset the lower than expected February exports number. Expect currency to remain on the lower side of the range next week in anticipation of build up of remittances during the long weekend.

Chartwise, key support and resistance remains at 43.00 and 43.50 respectively. Breach of 43.00 will suggest test of 42.50 while break of 43.50 may suggest a near term bottom has been formed at 43.00 levels.


BDO UNIBANK, INC.

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher
(632) 858-3001