rffrydr
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Joined: 30 Oct 2005
Posts: 16445
Location: Sunny California
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 Posted: Tue Feb 02, 2010 9:20 am Post subject: Phillippine REFI |
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Plumping sated buyers:
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Marc Chandler
Phillippines
2/2/2010 10:08 AM EST
While attention has been focused on Europe's fiscal challenges, developments in the Philippines today is a good reminder of the global nature of problem. It experienced its second failed auction here at the start of 2010. Today it rejected all the offers for PHP8.5 bln (~$183 mln) 2016 bonds that had produced an average yield of 7.465%, which was about 10 bp above the prevailing rate in the secondary market. There are a couple of considerations behind the market's demand for higher interest rates: Expectations for rate hikes to check inflation. The Jan CPI figures are due later this week and are expected to have risen 0.6% for a 4.9% year-over-year rate. Although the Philippines was able to raise money in the international capital markets ($1.5 bln dollar offering in Jan and is reportedly working on a samurai issue), the record budget deficit may be difficult to smoothly fund. Pre-election spending may help boost the economy, but it also increases the deficit. On the other hand, there has been a relaxation of China's interbank market rates and this, coupled with the unchanged one-year bill rate for the second consecutive week, has eased some anxiety, though the Chinese stock market failed to sustain its early gains. |
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