Economists see inflation staying within 3-5% goal INFLATION will not breach official targets for 2011 and 2012 but full-year averages could be at the high end of the 3-5% range, economists polled by the Bangko Sentral ng Pilipinas (BSP) said. The survey, conducted by the central bank in March, led to a mean inflation forecast of 4.9% for this year, up from a 4.1% outlook recorded three months earlier. The forecast for 201 was 4.8%, also up from 4.1% previously. Private sector economists from 15 institutions -- Al-Amanah Bank, ATR KimEng Financial Corp., Banco de Oro Unibank, Inc., Bank of America Meryll Lynch, Bank of China, Bank of Commerce, Deutsche Bank, Forecastweb, Goldman Sachs, Hong Kong Shanghai Banking Corp., Metropolitan Banking and Trust Co., Multinational Investment Bancorporation, Nomura, Philippine Equity Partners, Inc., and Rizal Commercial Banking Corp. -- were surveyed. Thirteen offered outlooks for the second and third quarters of 2010, with the mean forecasts at 4.6% and 5%, respectively. The central bank last Friday said it expects inflation to breach 5% in the third quarter due to price increases and capital inflows, but the full-year average will likely stay within the 3-5% target range. Inflation accelerated to 4.5% in April, up from the 4.3% in March, due to increases in commodity prices traced to the geopolitical unrest in the oil rich Arab world. The analysts, the BSP said, "noted that sustained increases in global food and oil prices, heightened by lingering political tensions in the Middle East and North Africa and the impact of adverse weather conditions on agriculture, could lead to a substantial pickup in inflation over the next few months." "[T]he sustained strengthening of the peso is expected to help temper the impact of imported inflation," it added. The central bank on Friday said it was not ruling out further rate adjustments to keep inflation in check. The BSP’s policy-making Monetary Board, which ordered a 25 basis point adjustment last May 5, will stage its next rate-setting meeting on June 16. It earlier raised policy rates by 25 bps on March 24 -- the first raise since July 2009 -- to temper rising consumer prices. -- A. S. O. Alegado
The changes are in line with plans to increase investor protection and market activity, bourse executives said after the PSE board elections on Saturday. "The board just approved a new rule on voluntary trading suspension," re-elected PSE President and CEO Hans B. Sicat told reporters. "It will not last more than 10 trading days unless the Securities and Exchange Commission and the Bangko Sentral ng Pilipinas are involved for restructuring operations," Mr. Sicat said, adding that the new rule was now if effect after having been passed on May 11. Approval of the cap followed San Miguel’s voluntarily halting trading from April 13 to May 4 ahead of a $979-million share and bond sale. The firm had originally said the trading halt would start from April 20. Trading halts were previously open-ended. Listed information technology firm IPVG Corp., for example, implemented one starting Oct. 21, 2008 up to Jan. 27, 2009 due to ongoing negotiations with an investor group. The reform, said Mr. Sicat, is part of an overall effort to address the main challenges the PSE is facing. "These are the questions of liquidity and corporate governance," he said. For newly-elected PSE Chairman Jose T. Pardo, the bourse should encourage more listings while introducing new products like derivatives in the long run. It is also on track to launching the Maharlika Board, which will showcase companies that comply with high governance standards, in September. The PSE will also accelerate plans to join an Association of Southeast Asian Nations bourse link that will be implemented late this year. Mr. Sicat said the PSE would be joining Thailand, Singapore and Malaysia when the plan, which will allow investors to trade shares in other bourses, takes effect. The PSE earlier targeted a 2012 inclusion. "It broadens the market for local investors. And with that linkage, we make it easier for 410 million potential [Asian] investors looking at the Philippines," Mr. Sicat said. The PSE is also expanding its reach outside Manila, posting a notice on its Web site on Friday that it was "inviting interested trading participants to be part of PSE Cebu." The local bourse is setting up a 74-square meter Cebu office that is expected to be operational by July. "[The] Cebu office is in response to regional Filipino investors. The physical presence sends the right signal," Mr. Sicat said. Along with Mr. Sicat and Mr. Pardo, those elected to fill the PSE’s 15-man board on Saturday were former chairman Cornelio T. Peralta, Eddie T. Gobing, Francis C. Chua, Alejandro T. Yu, Amor C. Iliscupidez, Roberto G. Vergarama, Vivian Yuchengco, Eusebio H. Tanco, David O. Chua, Emmanuel O. Bautista, Anabelle Lim-Chua, Dakila B. Fonacier and Edgardo G. Lacson. -- Neil Jerome C. Morales |
Stocks: Investors playing defense NEW YORK (CNNMoney) -- Investors have hunkered down in defensive mode and that trend will continue in the week ahead, which includes a smattering of economic data and the minutes from the most recent Fed meeting. "Investors have turned a little more nervous since uncertainty is starting to creep back into the picture," said Michael Sheldon, chief market strategist at RDM Financial Group. Just two weeks ago, stocks were sitting at the highest levels in nearly three years. But the tide has started to change as investors brace for the conclusion of Fed's bond buying program at the end of June. Commonly known as QE2 , the central bank's program has pumped $600 billion into the financial system since it launched in November. During that time the Dow (INDU) has surged almost 20%, while the S&P 500 (SPX) and Nasdaq Composite (COMP) have added more than 11%. "Markets traded lower following the end of QE1 so there's a good possibility that we'll see increased volatility during the next few weeks as we get closer to the end of QE2," said Sheldon. This week, investors will comb through minutes from the Federal Reserve's meeting last month for clues about how concerned the central bankers are....or aren't...about inflation. They'll also continue to keep a close eye on the dollar, which has strengthened recently in part because of renewed worries about Europe's debt woes. On the docket Monday: A number of major retailers report earnings results this week. Department store J.C. Penney (JCP, Fortune 500) and home improvement chain Lowe's (LOW, Fortune 500) deliver results before the market opens. The Empire Manufacturing survey is also due before the start of trading. The regional reading on manufacturing is forecast to have slipped to 18 in May from 21.7 in April, according to consensus estimates from Briefing.com. After the opening bell, the National Association of Homebuilders is scheduled to release its housing market index for May. The index is forecast to remain unchanged at 16. Tuesday: A report on April housing starts and building permits comes out in the morning. Economists expect that 563,000 homes broke ground in the month, up from 549,000 in March. Building permits are expected to slip to 590,000 from 594,000 the previous month. Dow component Wal-Mart (WMT, Fortune 500) is expected to post a $3.4 billion profit on sales of $103 billion, up 3% from a year ago. Home Depot (HD, Fortune 500) is also on tap to report quarterly results. Earnings from Dell (DELL, Fortune 500) are due after the closing bell. In the afternoon, investors will turn their attention to meeting minutes from the Federal Reserve's April meeting for hints on how the Fed will bring its QE2 program to a close. Hewlett-Packard (HPQ, Fortune 500) posts results after the market's close. Thursday: The government's weekly report on initial claims for jobless benefits is expected to show a drop to 420,000 from 434,000 in the previous week. No change is expected from the April index on leading economic indicators, following a 0.4% rise the month before. Also out in the morning is the Philadelphia Fed index for May, a regional reading on manufacturing. The index is forecast to fall to 18, from 18.5 the previous month. The National Association of Realtors will release its April reading existing home sales. Economists are looking for home resales to rise to an annualized rate of 5.2 million units, from 5.1 million in March. On the earnings front, Sears Holdings (SHLD, Fortune 500) is expected to announce results in the morning, while Gap (GAP) will report in the afternoon. Friday: Chinese Internet company Dangdang (DANG), which is similar to Amazon.com and made its debut in the U.S. markets in December, will deliver first-quarter results before the opening bell. |
Oil Drops After Obama Debt Warning; Louisiana Opens Mississippi Floodgates Oil dropped for the first day in three in New York after President Barack Obama said failure to raise the U.S. debt ceiling by early August may unravel global finances, stoking speculation fuel demand may slow. Futures slipped as much as 1 percent after Obama said in a segment taped for today’s “Face the Nation” program on CBS that “we could have a worse recession than we’ve already had” if investors think the credit of the U.S. wasn’t being backed up. Obama also announced plans to boost domestic oil production in the world’s biggest crude consumer. Crude oil for June delivery slid as much as $1.12 to $98.53 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.78 at 9:08 a.m. Sydney time. The contract gained 68 cents to $99.65 on May 13, the highest since May 10. Prices are 41 percent higher the past year. Brent oil for June settlement lost 73 cents, or 0. percent, to $113.10 a barrel on the London-based ICE Futures Europe exchange. The contract rose 85 cents, or 0.8 percent, to $113.83 on May 13. Obama said in his weekly address that the administration will begin stimulating domestic oil production to blunt rising gasoline prices with measures including encouraging drilling in Alaska and giving oil companies more time to comply with safety regulations. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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