Stock News 2013: Stocks dive as Fed signals end to easy money

The Federal Reserve: The Biggest Scam In History (Photo credit: CityGypsy11)

Local financial markets on Thursday were shaken after the US Federal Reserve signaled that the regime of easy money—which has inflated asset valuations in emerging markets—would end by next year.

But Philippine economic managers called for calm, saying that a more solid recovery of the US economy would benefit the Philippines in the long run.

The main-share Philippine Stock Exchange index on Thursday shed 186.53 points, or 2.86 percent, to close at 6,326.67, tracking the slump across global markets.

The peso, along with other Asian currencies, also weakened following the announcement of the US Fed Open Market Committee (FOMC). The local currency hit an intraday low of 43.76 against the dollar before it closed at 43.80—its weakest level since January of last year.

BDO chief market strategist Jonathan Ravelas said local investors were adjusting to the peso’s weakness.

“Most forecasts were below 40:$1. Very few believed [the peso] would depreciate,” Ravelas said.

BDO projected the peso to end the year at 42.10 against the dollar.

In a research note, investment bank BofA Merrill Lynch described 2013 to be the “high watermark” of the liquidity era.

“The FOMC statement was more hawkish than expected. Bernanke anticipates tapering to begin late this year and QE (quantitative easing) to end by the middle of next year. Our economists see the Fed’s forecasts as optimistic and low inflation as a growing concern. So, while the likelihood of fourth quarter tapering appears to have increased, they still believe early 2014 tapering is the more likely outcome,” Merrill Lynch said.

Financial markets have begun pricing the possibility of the US Fed unwinding its aggressive bond-buyback program, or QE, weeks ago, dragging down the local stock index by as much as 17 percent from the recent peak of around 7,400.

But many analysts say that, eventually, markets will again focus on the country’s fundamentals which, in turn, will boost Philippine assets.

“The situation could be a result of quick reaction to the recent announcement of the Fed’s view and policy intention,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said in a text message to reporters. “The market seems to be still digesting the full meaning and impact of the Fed view.”

Guinigundo said a stronger US economy should lead to an increase in foreign direct investments (OFW) and remittances to the Philippines. It should also aid in the recovery of the Philippine exports sector. The US is one of the Philippines’ largest trading partners.

http://business.inquirer.net/128263/stocks-dive-as-fed-signals-end-to-easy-money

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• PH stocks take a big hit; peso weakens (business.inquirer.net)
• Your preview to the most anticipated Fed announcement in a long time (business.financialpost.com)
• The News, The Spin, and The Reality of The FOMC Meeting (etfdailynews.com)
• How the Fed Changed the Rules Yesterday (fool.com)
• The Fed keeps its foot on the pedal (bankrate.com)
• If the economy is up, why are stocks down? (cbsnews.com)

Stock News 2013: Stocks dive as Fed signals end to easy money

The Federal Reserve: The Biggest Scam In History (Photo credit: CityGypsy11)

Local financial markets on Thursday were shaken after the US Federal Reserve signaled that the regime of easy money—which has inflated asset valuations in emerging markets—would end by next year.

But Philippine economic managers called for calm, saying that a more solid recovery of the US economy would benefit the Philippines in the long run.

The main-share Philippine Stock Exchange index on Thursday shed 186.53 points, or 2.86 percent, to close at 6,326.67, tracking the slump across global markets.

The peso, along with other Asian currencies, also weakened following the announcement of the US Fed Open Market Committee (FOMC). The local currency hit an intraday low of 43.76 against the dollar before it closed at 43.80—its weakest level since January of last year.

BDO chief market strategist Jonathan Ravelas said local investors were adjusting to the peso’s weakness.

“Most forecasts were below 40:$1. Very few believed [the peso] would depreciate,” Ravelas said.

BDO projected the peso to end the year at 42.10 against the dollar.

In a research note, investment bank BofA Merrill Lynch described 2013 to be the “high watermark” of the liquidity era.

“The FOMC statement was more hawkish than expected. Bernanke anticipates tapering to begin late this year and QE (quantitative easing) to end by the middle of next year. Our economists see the Fed’s forecasts as optimistic and low inflation as a growing concern. So, while the likelihood of fourth quarter tapering appears to have increased, they still believe early 2014 tapering is the more likely outcome,” Merrill Lynch said.

Financial markets have begun pricing the possibility of the US Fed unwinding its aggressive bond-buyback program, or QE, weeks ago, dragging down the local stock index by as much as 17 percent from the recent peak of around 7,400.

But many analysts say that, eventually, markets will again focus on the country’s fundamentals which, in turn, will boost Philippine assets.

“The situation could be a result of quick reaction to the recent announcement of the Fed’s view and policy intention,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said in a text message to reporters. “The market seems to be still digesting the full meaning and impact of the Fed view.”

Guinigundo said a stronger US economy should lead to an increase in foreign direct investments (OFW) and remittances to the Philippines. It should also aid in the recovery of the Philippine exports sector. The US is one of the Philippines’ largest trading partners.

http://business.inquirer.net/128263/stocks-dive-as-fed-signals-end-to-easy-money

Related articles

• PH stocks take a big hit; peso weakens (business.inquirer.net)
• Your preview to the most anticipated Fed announcement in a long time (business.financialpost.com)
• The News, The Spin, and The Reality of The FOMC Meeting (etfdailynews.com)
• How the Fed Changed the Rules Yesterday (fool.com)
• The Fed keeps its foot on the pedal (bankrate.com)
• If the economy is up, why are stocks down? (cbsnews.com)

Stock News 2013: Stocks dive as Fed signals end to easy money

The Federal Reserve: The Biggest Scam In History (Photo credit: CityGypsy11)

Local financial markets on Thursday were shaken after the US Federal Reserve signaled that the regime of easy money—which has inflated asset valuations in emerging markets—would end by next year.

But Philippine economic managers called for calm, saying that a more solid recovery of the US economy would benefit the Philippines in the long run.

The main-share Philippine Stock Exchange index on Thursday shed 186.53 points, or 2.86 percent, to close at 6,326.67, tracking the slump across global markets.

The peso, along with other Asian currencies, also weakened following the announcement of the US Fed Open Market Committee (FOMC). The local currency hit an intraday low of 43.76 against the dollar before it closed at 43.80—its weakest level since January of last year.

BDO chief market strategist Jonathan Ravelas said local investors were adjusting to the peso’s weakness.

“Most forecasts were below 40:$1. Very few believed [the peso] would depreciate,” Ravelas said.

BDO projected the peso to end the year at 42.10 against the dollar.

In a research note, investment bank BofA Merrill Lynch described 2013 to be the “high watermark” of the liquidity era.

“The FOMC statement was more hawkish than expected. Bernanke anticipates tapering to begin late this year and QE (quantitative easing) to end by the middle of next year. Our economists see the Fed’s forecasts as optimistic and low inflation as a growing concern. So, while the likelihood of fourth quarter tapering appears to have increased, they still believe early 2014 tapering is the more likely outcome,” Merrill Lynch said.

Financial markets have begun pricing the possibility of the US Fed unwinding its aggressive bond-buyback program, or QE, weeks ago, dragging down the local stock index by as much as 17 percent from the recent peak of around 7,400.

But many analysts say that, eventually, markets will again focus on the country’s fundamentals which, in turn, will boost Philippine assets.

“The situation could be a result of quick reaction to the recent announcement of the Fed’s view and policy intention,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said in a text message to reporters. “The market seems to be still digesting the full meaning and impact of the Fed view.”

Guinigundo said a stronger US economy should lead to an increase in foreign direct investments (OFW) and remittances to the Philippines. It should also aid in the recovery of the Philippine exports sector. The US is one of the Philippines’ largest trading partners.

http://business.inquirer.net/128263/stocks-dive-as-fed-signals-end-to-easy-money

Related articles

• PH stocks take a big hit; peso weakens (business.inquirer.net)
• Your preview to the most anticipated Fed announcement in a long time (business.financialpost.com)
• The News, The Spin, and The Reality of The FOMC Meeting (etfdailynews.com)
• How the Fed Changed the Rules Yesterday (fool.com)
• The Fed keeps its foot on the pedal (bankrate.com)
• If the economy is up, why are stocks down? (cbsnews.com)

Stock News 2013: Stocks dive as Fed signals end to easy money

The Federal Reserve: The Biggest Scam In History (Photo credit: CityGypsy11)

Local financial markets on Thursday were shaken after the US Federal Reserve signaled that the regime of easy money—which has inflated asset valuations in emerging markets—would end by next year.

But Philippine economic managers called for calm, saying that a more solid recovery of the US economy would benefit the Philippines in the long run.

The main-share Philippine Stock Exchange index on Thursday shed 186.53 points, or 2.86 percent, to close at 6,326.67, tracking the slump across global markets.

The peso, along with other Asian currencies, also weakened following the announcement of the US Fed Open Market Committee (FOMC). The local currency hit an intraday low of 43.76 against the dollar before it closed at 43.80—its weakest level since January of last year.

BDO chief market strategist Jonathan Ravelas said local investors were adjusting to the peso’s weakness.

“Most forecasts were below 40:$1. Very few believed [the peso] would depreciate,” Ravelas said.

BDO projected the peso to end the year at 42.10 against the dollar.

In a research note, investment bank BofA Merrill Lynch described 2013 to be the “high watermark” of the liquidity era.

“The FOMC statement was more hawkish than expected. Bernanke anticipates tapering to begin late this year and QE (quantitative easing) to end by the middle of next year. Our economists see the Fed’s forecasts as optimistic and low inflation as a growing concern. So, while the likelihood of fourth quarter tapering appears to have increased, they still believe early 2014 tapering is the more likely outcome,” Merrill Lynch said.

Financial markets have begun pricing the possibility of the US Fed unwinding its aggressive bond-buyback program, or QE, weeks ago, dragging down the local stock index by as much as 17 percent from the recent peak of around 7,400.

But many analysts say that, eventually, markets will again focus on the country’s fundamentals which, in turn, will boost Philippine assets.

“The situation could be a result of quick reaction to the recent announcement of the Fed’s view and policy intention,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo said in a text message to reporters. “The market seems to be still digesting the full meaning and impact of the Fed view.”

Guinigundo said a stronger US economy should lead to an increase in foreign direct investments (OFW) and remittances to the Philippines. It should also aid in the recovery of the Philippine exports sector. The US is one of the Philippines’ largest trading partners.

http://business.inquirer.net/128263/stocks-dive-as-fed-signals-end-to-easy-money

Related articles

• PH stocks take a big hit; peso weakens (business.inquirer.net)
• Your preview to the most anticipated Fed announcement in a long time (business.financialpost.com)
• The News, The Spin, and The Reality of The FOMC Meeting (etfdailynews.com)
• How the Fed Changed the Rules Yesterday (fool.com)
• The Fed keeps its foot on the pedal (bankrate.com)
• If the economy is up, why are stocks down? (cbsnews.com)

Stock News 2013: Villar Property to Sell Treasury Shares

Finance - Financial injection - Finance (Photo credit: @Doug88888)

The board of property developer Vista Land & Lifescapes, Inc. has cleared the sale of all the company’s treasury shares to take advantage of perceived strong investor demand and in a bid to boost liquidity, the Villar-led firm said in a disclosure yesterday.

“On Jan. 3, the board of directors of Vista Land authorized the company to sell all of its existing treasury shares totaling 133.91 million shares to meet demand from investors and increase liquidity of the company’s shares of stock,” the disclosure read.

Vista Land’s management team was tasked to determine the terms and conditions of the planned share sale.

“The board likewise authorized the implementation of all necessary corporate and other actions to proceed with the sale of the aforementioned treasury shares, and further authorized and empowered management to determine and decide on the price at which the treasury shares shall be sold,” the disclosure added.

The Philippine Stock Exchange defines treasury shares as “shares of stock which were previously issued and fully paid, but subsequently reacquired by the issuing corporation by purchase, redemption, donation, or through some other lawful means.”

Treasury shares are not considered outstanding, are non-voting and are not included in dividend issuances.

http://www.bworldonline.com/content.php?section=Corporate&title=Villar-property-company-to-sell-all-treasury-shares&id=63741

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International News 2011: Goldman buying back Buffett stake

Image via CrunchBase
Goldman Sachs said Friday it would buy back the $5.5 billion in preferred stock held by billionaire Warren Buffett's Berkshire Hathaway.

The Wall Street investment firm announced the plan after receiving a green light from the US central bank.

http://business.inquirer.net/money/breakingnews/view/20110319-326307/Goldman-buying-back-Buffett-stake

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Stock News 2011: Banks now offering 25-year housing loans

The Department of Finance (DoF) said Monday that some local banks are now willing to provide housing loans of up to 25 years after the government successfully sold longer-dated debts.

Finance Secretary Cesar V. Purisima said, in an interview, that some local banks came to him and have showed interest in introducing housing loans that are payable in 25 years.

“Banks now are telling me that they’re looking at offering consumers 25-year housing loans. Before, loans outside Pag-IBIG [Home Development Mutual Fund] can only be 15 years,” Purisima said.

In December last year, the Aquino government issued debt notes maturing in 2035, in the process creating a new benchmark rate for 25-year bonds.

http://www.mb.com.ph/node/299057/bank

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Stock News 2010: Visa payments volume in Asia Pacific grows 12% to $800 billion

Image via Wikipedia
MANILA, Philippines – Visa Inc. reported increased card spending throughout the Asia Pacific region.

For the 12 months ended September 30, 2010, payments volume generated on all Visa cards across Asia Pacific reached US$800 billion, an increase of 12.0 percent over the same period last year.

Significantly, the total number of actual payments transactions increased to 10.2 billion, up 11.4 percent from 12 months ago. This increase highlights the continued trend by consumers to use electronic forms of payments rather than cash and checks throughout the region.

Overall, across the Asia Pacific region, both Visa debit and credit products recorded strong growth throughout the year; payments volume for debit increased by 42.9 percent while credit increased by 9.7 percent.

The number of Visa debit cards increased by 15 percent for the year ending September, 2010. This growth figure is a key indicator that more and more people are joining the formal banking system, a sign in turn of improved financial inclusion in developing economies.

http://www.mb.com.ph/node/293099/vi

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International News 2010: AIG Moves Closer To Independence

Image via WikipediaNEW YORK (TheStreet) -- With the repayment of $4 billion in taxpayer funds, American International Group (AIG) has moved closer to financial independence and prepared a viable subsidiary for an eventual spin-off.
AIG said on Monday that its International Lease Finance Corporation (ILFC) subsidiary had restructured its debt by issuing $4.4 billion in private notes. ILFC used the proceeds to repay outstanding debt to the Federal Reserve, which it had secured through AIG's funding facility.
In doing so, the Los Angeles-based aircraft leasing business was also able to recoup $10 billion in collateral that the Fed had been holding against possible repayment issues. The new debt is structured into four smaller parcels - both secured and unsecured - that are due in later years, giving the business more flexibility as it moves forward.
It's widely known that AIG plans to divest ILFC. When AIG announced its restructuring plans after the federal bailout in the fall of 2008, ILFC was cited by analysts and industry players as a "crown jewel" among the businesses it could sell. However, the insurance giant had issues in finding interested suitors because of ILFC's debt obligations. Murmurs about former ILFC CEO Steven Udvar-Házy buying the business went silent when the longtime leader departed to start up a competing business, Air Lease Corp.
Over the past several months, the business has become a turnaround story once again - installing a new CEO, building up new and future orders and boosting liquidity by $12.5 billion.
"This capital raise, combined with the capital raises earlier this year, demonstrates that ILFC is getting stronger with each passing day," AIG CEO Robert Benmosche said in a statement, adding that "ILFC has made substantial and impressive progress in dealing with its liquidity needs."
The deal represents AIG's single biggest repayment of bailout funds so far, as it awaits progress on larger transactions. AIG plans to sell a life-insurance subsidiary to MetLife (MET) later this year, and is hashing out plans to offer an Asian life-insurance subsidiary to the market in an IPO. Those two deals stand to cut AIG's federal tab further, by roughly $50 billion.
As for ILFC's prospects, new CEO Henri Courpron said the firm has $13 billion in orders, adding that the market's appetite for ILFC debt is "a direct reflection of our company's viability and future prospects."
ILFC remains one of the biggest, if not the biggest, airline-leasing businesses in the world. Among its top competitors are subsidiaries owned by General Electric (GE), CIT Group (CIT), RBS (RBS), Boeing (BA), BAE (BAESY) and an assortment of private players.
http://www.thestreet.com/story/10842451/1/aig-moves-closer-to-independence.html

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