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: 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 2011: UCPB income up 44%

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The United Coconut Planters Bank (UCPB) has posted an unaudited net income of P2.39 billion in 2010, surpassing its P2.2-billion target for the year, and exceeding the previous year’s P1.66-billion profit by 44 percent.

“Higher loan and investment volumes, better margins, hefty trading gains and lower fund cost propelled last year’s earnings growth,” UCPB executive vice president and chief finance officer Cesar Rubio said.

Loan portfolio expanded by 16 percent to P54.77 billion, while trading and investment securities by 14 percent to P50.07 billion. The volume expansion, along with the 11-percent improvement in margins, boosted the bank’s interest income by 15 percent, to P7.83 billion. Non-interest income went up by 32 percent to P2.22 billion, bolstered by substantial increase in trading gains.

http://www.philstar.com/Article.aspx?articleId=661765&publicationSubCategoryId=74