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Philippine Markets: 14 March 2011

14 March 2011

USD/PhP: 43.58 - 0.07 PSEi: 3918.70 - 5.65
USD/JPY: 81.88 PFINC: 866.08 - 3.04
EUR/USD: 1.3940 BDO: 49.15 + 0.10
GBP/USD: 1.6090 BPI: 55.50 - 0.20
PDSTF3M: 1.4477 MBT: 62.02 - 0.80
Prices as of 4:00pm Source: Bloomberg, Reuters

Foreign buying tempers fall of PH stocks By Doris Dumlao Philippine Daily Inquirer Local stocks opened in the red on Monday due to ripples from the devastating earthquake in Japan, but large bargain hunting by foreign investors trimmed overall losses. The main-share Philippine Stock Exchange index dipped by 5.65 points, or 0.144 percent, to 3,918.70. Accord Capital Equities said the market "overcame a poor start that pulled the index 36 points lower at the open, apparently feeling the aftershocks of the quake that shook northeastern Japan last week." The day's losses were tempered by the modest gains posted by the industrial, holding firms and mining/oil counters. On the other hand, the financial, property and services counters took the brunt of the bears. Value turnover stood at P5.2 billion, with 64 decliners narrowly edging out 53 advancers. There was P2 billion in net foreign buying that supported local equities despite the fallout from Japan. The stocks that fell on heavy volume were Aboitiz Equity Ventures, Metorbank, PLDT, Aboitiz Power, Ayala Land, Megaworld, Cebu Air, ICTSI and Southeast Asia Cement. AGI, EDC, SM Investments, First Gen, DMCI, Ayala Corp., FPH, Banco de Oro, Nickel Asia and Vista Land bucked the day's downtrend. "The market is obviously still trying to assess the impact of Japan's worst natural disaster in the post-war period," Accord Capital said.

Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher
(632) 858-3001

Philippine Markets: 11 March 2011

11 March 2011

USD/PhP: 43.65 + 0.17 PSEi: 3924.35 - 35.59
USD/JPY: 82.84 PFINC: 869.12 - 7.30
EUR/USD: 1.3838 BDO: 49.05 - 0.20
GBP/USD: 1.6048 BPI: 55.70 - 0.60
PDSTF3M: 1.4212 MBT: 62.85 - 0.30
Prices as of 4:00pm Source: Bloomberg, Reuters


Philippine Interest Rate Outlook

Short-term secondary market rates revisited January lows as investors believed that market liquidity remained the key driver for interest rates to remain low. This condition is further supported by the goverment's announcement that the 2010 full-year deficit stood at 314.4 billion pesos, lower than programmed 325 billion pesos.

However, rising inflation concerns due to continued rise commodity prices partly due to the tensions in the Middle East and Northern Africa region (MENA) constrict current low interest rate policy. Market players are expecting the Bangko Sentral Ng Pilipinas (BSP) to raise its benchmark rates as early as this month as other Asian central banks already started adjusting their benchmark rates to repel inflation.

Philippine Equities Outlook

Local shares rose 1.07 percent week-on-week to 3924.35 for the second straight week still on bargain hunting activties. However, the continued geopolitical tensions in the MENA region and rising commodity prices globally appears to have capped the market's gain the week's high at 3959.94.

Chart wise, the week close at 3924.35 suggests test of 3,800 support level.

Philippine Peso Outlook

The local currency fell 0.85 percent week-on-week to 43.65 as the greenback strengthened on renewed concerns in the Euro zone following the credit downgrades in Spain and Greece and the 8.9 magnitude earhquake in Japan.

Chartwise, the week close at 43.65 continues to suggest further consolidation between the 43.25 - 44.00 levels in the week ahead.


Jonathan Ravelas
Chief Market Strategist
(632) 858-3145

Rhys Cruz
Junior Researcher
(632) 858-3001