Philippine Markets: 26 November 2010

26 November 2010

USD/PhP: 44.18 + 0.10 PSEi: 4053.58 - 43.91
USD/JPY: 83.90 PFINC: 947.06 - 8.39
EUR/USD: 1.3259 BDO: 53.90 - 0.90
GBP/USD: 1.5629 BPI: 58.00 unch
PDSTF3M: 1.6019 MBT: 73.50 unch
Prices as of 4:00pm Source: Bloomberg, Reuters


Philippine Interest Outlook

Secondary market rates moved down week-on-week as market liquidity remained the key driver of downward trend in short-term yields. Also, the lower than expected GDP growth rate for the third quarter coupled with stable inflation strengthens the view that BSP will keep key rates unchanged in the near-term.

Continue to expect rates to move sideways to down in the week ahead.

Philippine Equities Outlook

Local stocks lost 3.57 percent week-on-week to 4053.58 due to developments in Korea and European debt crisis. Profit-taking activities also took place after the lower than expected third quarter growth.

Chartwise, the week’s close at 4,053.58 implies a test of 4,000 level after the index broke the 4,070 support level. Expect some bargain hunters are the said levels. Failure for the market to hold above the 4,000 levels could call for further losses toward the 3,800 levels.

Philippine Peso Outlook

The local currency lost 0.80 percent week-on-week to 44.18 on risk aversion fears arsing from the tensions in the Korean peninsula ann the on-going European debt crisis.

Chartwise, the week's close at 44.30 implies further tests towards the 44.50 levels in the near-term. A break above the 44.50 levels could call for a much larger correction towards the 45.00-46.00 levels. Only a break below the 43.70 levels will call for the peso bulls to play.