Wednesday, June 1, 2011
Philippine Markets: 01 June 2011
01 June 2011
USD/PhP: 43.195 (As of 12:00pm) PSEi: 4,286.46 + 41.82
USD/JPY: 81.23 PFINC: 952.44 + 7.27
EUR/USD: 1.4423 BDO: 57.65 - 0.85
GBP/USD: 1.6466 BPI: 57.30 + 1.65
PDSTF3M: 2.6981 MBT: 70.00 + 1.00
Prices as of 12:00pm Source: Bloomberg, Reuters
Philippine Transportation Secretary De Jesus Quits, ABS-CBN Says
2011-06-01 03:39:35.441 GMT
By Cecilia Yap
June 1 (Bloomberg) -- Philippine Transportation and
Communications Secretary Jose de Jesus tendered his resignation
due to personal reasons, ABS-CBN News Channel reported on its
website, citing Undersecretary Dante Velasco.
News Analysis: Slowdown in Philippine Q1 growth puts year-round
2011-06-01 03:58:23.549 GMT
MANILA, May 31, 2011 (Xinhua via COMTEX) -- By Alito L. Malinao
Philippine economic growth in the first quarter of 2011
has slowed down to 4.9 percent compared to the same period of
last year putting the country's goal of achieving a 7 percent
to 8 percent year-round growth in jeopardy.
The latest figure is a big drop from last year's same
period when the economy, still under the administration of then
President and now Pampanga Representative Gloria Macapagal-
Arroyo, grew by 8. 4 percent.
The National Statistical Coordination Board (NSCB)
attributed the downtrend to the government's underspending and
the slowdown in global trade.
Compared with the previous three months, the economy grew
by only 1.9 percent. This was the lowest expansion of the
Philippine economy since 2009.
The Aquino administration reiterated on Tuesday, the
following day of the release of the first quarter economic
datum, that the government would adhere to its 7-8 percent
growth target for the entire year.
Secretary of the Presidential Communications Development
and Strategic Ramon Carandang said,"attaining 7-8 percent
growth this year is not impossible."
But, Jun Neri of Bank of the Philippine Islands in Manila
said that the target is difficult to achieve, adding that the
government must step up on its spending program, particularly
in infrastructure, to help neutralize some of the negative
impact arising from the Middle East developments as well as the
disaster in Japan.
Thousands of Filipino overseas workers have been forced to
return to the Philippines when civil unrest engulfed Tunisia,
Egypt, Yemen and Libya, hosts to Filipino expatriate workers.
Other Southeast Asian countries also expanded moderately,
some even lower than that of the Philippines.
For example, Thailand, the region's second largest
economy, grew only by 3.0 percent from a year earlier while
Malaysia expanded by 4.6 percent for the same period, slightly
lower than that of the Philippines.
The top performer in the region was Singapore whose
economy grew by 8.5 percent in the first quarter from a year
earlier, a big leap from the government forecast of only 4 to 5
percent surge.
According to the Central Bank of Singapore, the island-
nation's expansion was triggered by remarkable growth in its
manufacturing sector, putting Singapore on track as the world's
second fastest growing economy, next only to China.
Indonesia, the region's largest economy, also grew by 6.5
percent in the first quarter.
According to Indonesian Finance Minister Agus
Martowardojo, his country expects its growth momentum to
accelerate to an average pace of 6.40 percent to 6.80 percent
by 2013.
Martowardojo said that Indonesia's economy had gained
momentum from domestic demand and favorable global conditions.
The government expects the resource-rich archipelago of
240 million people to grow 6.40 percent this year after
expanding 6.10 percent in 2010 when it became among the best
performing economies in the Group of 20 nations.
Earlier, the International Monetary Fund has urged
Indonesia to slash expensive fuel subsidies and redirect the
money into building badly needed infrastructure to spur long-
term growth.
Analysts said that governments in the region would have to
boost spending to achieve its annual growth target as exports
could be hit by falling Japanese demand in the aftermath of the
March 11 earthquake and tsunami disaster.
Although some countries in the region have lower-than-
expected growths, they are still within the forecast of both
the Asian Development Bank and the World Bank. The two
financial institutions have predicted that the region would
grow by an average of 4-5 percent in the five-year period
starting this year.
BDO UNIBANK, INC.
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
Morning Brief: 01 JUNE 2011
Peso up as efforts to fix Euro debt lift sentiments on global economy By: Michelle V. Remo The peso inched up on Tuesday as efforts to resolve debt woes in the Euro zone lifted sentiment for emerging markets in general. The local currency closed at 43.25 against the US dollar on the second trading day of the week, up by 6.5 centavos from Monday’s finish of 43.315:$1. Intraday high stood at 43.18:$1, while intraday low settled at 43.33:$1. Volume of trade amounted to P800.43 million, up from $582.5 million previously. Traders said investors had been worried about the serious debt situation of countries in the Euro zone, but added that recent reports about plans to rescue debt-ridden countries somehow eased concerns of investors on the overall global economy. In turn, their appetite for perceivably riskier instruments, particularly those issued from emerging markets like the Philippines, has somewhat improved, traders explained. The appreciation of the peso on Tuesday followed reports that leaders of the European Union have been trying to come up with a package of financial aid to help rescue Greece. Moreover, the EU recently issued bonds, proceeds of which were meant to financially support other ailing member-countries, particularly Ireland and Portugal.
It also plans to set up brewery plants in Laos and Cambodia, SMB chairman Ramon S. Ang told reporters at the sidelines of the beer brewery’s annual stockholders’ meeting. SMB is also in talks with Kirin to dilute their combined stake in order to comply with the 10 percent minimum public float required by the PSE. A public offering shall be conducted to expand public float by November this year, Ang said. |
| U.S. Stocks Advance on Speculation About Additional Bailout Aid for Greece By Rita Nazareth U.S. stocks advanced, trimming the biggest monthly drop since August for the Standard & Poor’s 500 Index, amid speculation about additional aid for Greece. Apple Inc. (AAPL) rallied 3.1 percent after saying Chief Executive Officer Steve Jobs will introduce a cloud-computing product and new software next week. Intel Corp. (INTC) gained 1.4 percent as the world’s largest chipmaker seeks to challenge tablet makers with a new type of thinner laptop called an “ultrabook.” General Dynamics Corp. (GD) climbed 4.2 percent after receiving a $744 million contract from the U.S. Navy. The S&P 500 rose 1.1 percent to 1,345.20 at 4 p.m. in New York, for its fourth consecutive day of gains. The index declined 1.4 percent in May. The Dow Jones Industrial Average added 128.21 points, or 1 percent, to 12,569.79 today. Equities advanced even as data on consumer confidence and business activity trailed economists’ estimates. “There’s a roadmap to getting Greece through its crisis,” said Madelynn Matlock, who helps oversee $14.8 billion at Huntington Asset Advisors in Cincinnati. “That’s why investors are reacting positively. In the U.S., we got some softening in economic data. That doesn’t tell me we’re going to have a QE3. It tells me that monetary policy is going to be easy for a while. That should provide room for stocks to move higher.” The benchmark gauge fell from an almost three-year high on April 29 on concern about Europe’s debt crisis. Still, the gauge rose 7 percent this year amid higher-than-forecast corporate profits and government stimulus measures. The Federal Reserve plans to complete its second round of asset purchases, known as quantitative easing, or QE2, in June, while holding interest rates “exceptionally low” for an “extended period.” Last 100 Years Benchmark indexes had a four-week drop, the longest losing streak in more than 15 months. Over the last 100 years, the Dow has returned an average 0.4 percent gain in June, according to data compiled by Bespoke Investment Group. The gauge has fallen 0.6 percent and 1.2 percent in June, respectively, over the last 50 years and 20 years, the data showed. Global stocks rallied as Jean-Claude Juncker, head of the group of euro-area finance ministers, said European Union leaders will decide on additional aid for Greece by the end of June and have ruled out a “total restructuring” of its debt. Stocks gained even after the Institute for Supply Management-Chicago Inc. said its business barometer fell to 56.6 this month from 67.6 in April. Figures greater than 50 signal expansion. Economists forecast the gauge would fall to 62, according to the median estimate in a Bloomberg News survey. Consumer Confidence Slumps Confidence among U.S. consumers unexpectedly declined in May to a six-month low as Americans’ outlook for business conditions and the labor market soured. Another report showed that home prices in 20 U.S. cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery. “Economic data has been patchy,” Mike Ryan, the New York- based chief investment strategist for Wealth Management Americas at UBS Financial Services Inc., wrote in a note today. “The apparently much more mixed picture represents mostly a transitory headwind. It remains our view that equity markets will outperform over the balance of the year given a still solid earnings outlook, undemanding valuations and continued accommodative policy conditions.” The longest stretch of declines on a weekly basis for the S&P 500 in a year has left valuations at the lowest level ever compared with speculative-grade debt. Earnings from the past 12 months for companies in the benchmark gauge for U.S. equities reached 6.64 percent of share prices this month, according to data compiled by Bloomberg. That compared with the 6.61 percent average yield on junk bonds, data from Barclays Plc show. It was the first time the spread, a way of comparing debt and equity values, has shown stocks with a higher yield, according to Bloomberg data going back to 1987. Technology shares led the gains in the S&P 500 among 10 industries, rising 1.6 percent. Apple rallied 3.1 percent to $347.83. CEO Jobs will make a public appearance June 6 to introduce a cloud-computing product and a new version of the operating system that powers its iPad and iPhone touch devices. Jobs, in the midst of his third medical leave since 2004 as he battles a rare form of cancer, will deliver a keynote address at Apple’s Worldwide Developers Conference, the Cupertino, California-based company said in a statement today. Challenging Other Tablets Intel gained 1.4 percent to $22.51. The world’s largest chipmaker is seeking to help the personal-computer industry fend off a challenge from Apple’s iPad and other tablets. Intel’s new machines will be less than an inch thick, have days of battery life on standby, start up in just seconds and retail for less than $1,000, according to Intel Executive Vice President Sean Maloney. Intel aims to convert 40 percent of consumer laptops to the new category by the end of 2012. General Dynamics advanced 4.2 percent to $74.22. The second-largest U.S. shipbuilder received a $744 million contract from the U.S. Navy to construct two mobile landing platform ships. The contract comes with an option for the construction of a third ship, which would increase its size to $1.3 billion. BlackRock Inc. (BLK)’s Chief Executive Officer Laurence D. Fink said he’s more bullish on U.S. equities than bonds because companies are benefiting from the weak dollar and have surplus cash to invest for growth. “We love equities, we love dividend stocks,” Fink said in a Bloomberg Television interview today in Hong Kong. “You own Treasuries because you’re worried about the world and the future, but if you believe the world is a good place to invest for the long cycle, you have to be in equities.” Fink, one of the co-founders of BlackRock in 1988, built what is now the world’s biggest asset manager through acquisitions including the purchase in December 2009 of Barclays Global Investors. He said in a March 3 interview that he’s a “big buyer” of the U.S. dollar, doesn’t see a “bear market” in bonds and would buy Treasuries if yields rise above 4 percent. |
Oil Rises for Third Day on Optimism Over Greek Aid; U.S. Supplies May Drop By Ben Sharples - May 31, 2011 Oil gained for a third day in New York as signals that the European Union will approve aid for Greece without forcing a debt default stoked speculation fuel demand will increase. Futures climbed as much as 0.5 percent after rising 2.1 percent yesterday. EU leaders will decide on additional help for Greece by the end of this month and have ruled out a “total restructuring” of its debt, said Jean-Claude Juncker, head of the group of euro-area finance ministers. Prices also gained after a Canadian pipeline was shut. An Energy Department report tomorrow may show U.S. crude supplies fell. “There’s a little bit of relief in the Greek world and that’s suggesting a bit more demand,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted oil will average $100 this year. Crude for July delivery rose as much as 48 cents to $103.18 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.90 at 10:39 a.m. Sydney time. The contract yesterday climbed $2.11 to $102.70, the highest since May 10. Prices slipped 9.9 percent in May, the first decline in nine months, and are 42 percent higher the past year. Brent crude for July delivery gained 14 cents, or 0.1 percent, to $116.87 a barrel on the London-based ICE Futures Europe exchange. The contract yesterday increased $2.05, or 1.8 percent, to $116.73. Prices slid 7.3 percent in May and are 61 percent higher the past year. Testing $106 The European benchmark contract traded at a premium of $13.95 a barrel to U.S. futures yesterday. The difference between front-month contracts in London and New York reached a record $19.54 on Feb. 21. It averaged 76 cents last year. Oil may test $106 a barrel in New York for the first time in three weeks after the July contract broke through technical resistance at the 100-day moving average, according to analysis from New York-based Blue Ocean Brokerage LLC. The moving average was $102.08. Inspectors from the EU, the International Monetary Fund and the European Central Bank are set to wrap up a review of Greece’s progress in meeting the terms of last year’s 110 billion-euro ($159 billion) bailout in the next few days. “We will try to solve the Greek problem by the end of June,” said Juncker yesterday in Paris after meeting with French President Nicolas Sarkozy. No Debt Restructuring Debt restructuring is “off the table” because of the domino effect on European markets, said Olli Rehn, the EU’s economic and monetary affairs commissioner, in a Bloomberg interview yesterday in New York. The euro rose as high as $1.4437 in New York, the strongest against the U.S. currency since May 9. A weaker dollar makes commodities more attractive as an alternative investment. Calgary-based TransCanada Corp. shut the 591,000 barrel-a- day Keystone pipeline after “an issue with a fitting” caused a 40-barrel oil leak at a pump station, according to an e-mailed statement from Terry Cunha, a company spokesman. There was no fault on the pipeline itself, he said. The system ends at Cushing, Oklahoma, the delivery point for West Texas Intermediate oil, the grade traded in New York. Oil tanks at Cushing were at 86 percent of working storage capacity as of the end of March, the U.S. Energy Department said. It’s the first time the department has published a utilization figure for Cushing, said Jonathan Cogan, an EIA spokesman. Crude Stockpiles An Energy Department report tomorrow may show U.S. crude stockpiles declined 1.8 million barrels last week from 370.9 million, a Bloomberg News survey of analysts shows. Gasoline supplies probably increased 650,000 barrels, the survey shows. Prices fell for options betting crude will decline. The most-active contract was the July $95 put, which dropped 40 cents to 59 cents. The July $105 call option, a bet oil will rise, climbed 56 cents to $1.64. Qatar’s oil minister said there’s “no noticeable urgency” for the Organization of Petroleum Exporting Countries to raise its quota when it meets on June 8 in Vienna. The market is in a “healthy situation,” Mohammed bin Saleh al-Sada said. Supply, demand and prices are “getting stable,” he said. Oil reduced gains after data showed home prices in 20 U.S. cities dropped in March to the lowest level since 2003. The S&P/Case-Shiller index of property values fell 3.6 percent in March from a year ago, the biggest year-over-year decline since November 2009, the group said yesterday in New York. Confidence among U.S. consumers unexpectedly slipped in May to a six-month low, the Conference Board, a New York-based private research group, said yesterday. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
BDO UNIBANK INC.
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
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