Philippine Markets: 11 May 2011

11 May 2011

USD/PhP: 42.88 - 0.085 PSEi: 4335.04 + 31.91
USD/JPY: 80.74 PFINC: 955.61 + 3.03
EUR/USD: 1.4392 BDO: 56.90 - 0.10
GBP/USD: 1.6394 BPI: 58.65 + 0.40
PDSTF3M: 1.7654 MBT: 68.20 + 0.80
Prices as of 4:00pm Source: Bloomberg, Reuters

Philippines May Not Need to Boost Rates Further, Purisima Says
By Joel Guinto
May 11 (Bloomberg) -- The Philippines, which raised its
benchmark interest rate in March and last week, may have “no
need” to further boost borrowing costs if oil prices stabilize,
Finance Secretary Cesar Purisima said today.
Inflation is “still within the policy range” and that
higher oil price had been the “primary driver” of consumer
price gains, he said in a phone interview in Manila. “Our
policy is to make sure we’re ahead of the curve,” he said.
“I’m hopeful that if oil prices are stable, there wont be a
need for future raises,” Purisima said.


Asian Stocks Rise on Commodity Prices, Japan Earnings Reports
By Shani Raja
May 11 (Bloomberg) -- Asian stocks rose, with a regional
benchmark index climbing for a third straight day, after oil and
metal prices advanced yesterday. Japanese shares gained as
companies reported improving earnings and a weaker yen boosted
exporters’ prospects.
BHP Billiton Ltd., the world’s biggest mining company,
increased 1.7 percent in Sydney. S-Oil Corp. surged 3.2 percent,
leading South Korean oil refiners higher in Seoul after gasoline
prices rose in New York. Sumitomo Rubber Industries Ltd.,
Japan’s second-largest tiremaker, jumped 4.9 percent in Tokyo
after boosting its profit forecast. Toyota Motor Corp. and rival
Honda Motor Co. advanced as the weaker yen bolstered their
earnings outlook.
“Sentiment has been on the nervous side of late,
reflecting concerns about monetary tightening and a slowdown in
economic indicators,” said Nader Naeimi, a Sydney-based
strategist for AMP Capital Investors Ltd., which has almost $100
billion under management. “Sentiment is now shifting because of
the strengthening earnings environment and the positive
prospects for corporate activity.”
The MSCI Asia Pacific Index rose 0.6 percent, the most in
more than a week, to 138.72 as of 2:22 p.m. in Tokyo. About
three stocks advanced for each that fell. The gauge trimmed
gains after a report showed China’s inflation rose more than
economists had estimated, raising concerns of possible further
monetary tightening. Energy, materials and consumer stocks led
today’s gains.

Nikkei, Kospi

Japan’s Nikkei 225 Stock Average rose 0.4 percent. South
Korea’s Kospi Index, which was closed yesterday, gained 1
percent, while Australia’s S&P/ASX 200 Index advanced 1.1
percent. In Hong Kong, the Hang Seng Index, which was also shut
yesterday, climbed 0.3, while China’s Shanghai Composite Index
was little changed.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent
today. In New York, the index advanced 0.8 percent yesterday,
rising for a third day as higher-than-estimated profit forecasts
and Microsoft Corp.’s purchase of Skype Technologies SA
bolstered optimism that earnings and takeovers will keep fueling
the rally.
Dean Foods Co., the largest U.S. milk processor, raised its
full-year earnings forecast and posted first-quarter profit that
exceeded analysts’ estimates.
Microsoft agreed to buy Skype Technologies SA for $8.5
billion, using a growing cash pile to gain the world’s most
popular Web-calling service and help it catch up in online and
mobile advertising, according to a statement yesterday.

Yen Pause

“The global economy is on a track to recovery,” said
Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko
Securities Inc. “The yen’s appreciation, which was weighing on
the exporters and related stocks, is taking a pause. That will
likely boost the stock market.”
Crude oil for June delivery rose 1.3 percent to $103.88 a
barrel yesterday in New York, the highest settlement since May 4.
The London Metal Exchange Index of six metals including copper
and aluminum advanced for a third day, rising 0.7 percent
yesterday.
BHP Billiton Ltd., also Australia’s No. 1 oil producer,
rose 1.7 percent to A$45.28 in Sydney, while Rio Tinto Group,
the world’s second-largest mining company by sales, gained 2.4
percent to A$81.56. Jiangxi Copper Co., China’s largest producer
of the metal, gained 1.2 percent to HK$24.85 in Hong Kong, while
Korea Zinc Co. advanced 2.4 percent to 388,000 won in Seoul.

Korean Refiners

S-Oil gained 3.2 percent to 144,000 won and SK Innovation
Co. climbed 3.2 percent to 226,500 won after gasoline futures
rose as much as 3.1 percent, pushing the premium paid for
gasoline versus crude oil to an all-time high.
The MSCI Asia Pacific Index rose 0.2 percent this year
through yesterday, compared with gains of 7.9 percent by the S&P
500 and 2.6 percent by the Stoxx Europe 600 Index. Stocks in the
Asian benchmark were valued at 13.4 times estimated earnings on
average, compared with 13.7 times for the S&P 500 and 11.4 times
for the Stoxx 600.
David Jones Ltd., Australia’s second-largest department
store chain, added 3.2 percent to A$4.59 in Sydney after
affirming its annual earnings forecast.
In Tokyo, Sumitomo Rubber surged 4.9 percent to 940 yen
after raising its full-year profit forecast by 28 percent. Orix
Corp., a financial-services company, climbed 4 percent to 8,020
yen after posting full-year net income 78 percent higher than a
year earlier, and saying that it expects profit to rise 15
percent this year. NTT Data Corp., a network-services company,
gained 2.5 percent to 272,600 yen as it forecast profit will
rise 4.5 percent

Toyota, Honda

Toyota rose 1.2 percent to 3,290 yen, and Honda added 2.1
percent to 3,130 yen. The Japanese currency slid versus its
major counterparts, dropping against the euro for the first time
in six days yesterday, as gains in stocks and commodities damped
demand for safer assets. A weaker yen boosts the value of
overseas income at Japanese companies when repatriated.
Japan’s currency fell to its weakest level since May 4
against the U.S. currency today, touching 81.09 per dollar
before trading at 80.90 as of 2:36 p.m. in Tokyo.
China’s consumer prices rose 5.3 percent in April from a
year earlier, exceeding the government’s full-year target for a
fourth straight month. The gain was more than the 5.2 percent
median estimate in a Bloomberg News survey of 30 economists and
compared with a 5.4 percent increase in March. Producer prices
jumped 6.8 percent, the statistics bureau said today in Beijing.
The government aims for full-year inflation of 4 percent as
Premier Wen Jiabao eyes the risk that rising prices for basic
goods and housing will fan social discontent.

BDO UNIBANK, INC.

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher
(632) 858-3001