CiTi PHILIPPINES:  ROARING IN FINANCIAL INSIGHT FOR 2010


[PHOTO AT LEFT - Photo is loading... Citi Philippines CEO Sanjiv Vohra and Retail Banking director Vipin Agrawal]

MANILA, FEBRUARY 19, 2010 (STAR) CRAZY QUILT By Tanya T. Lara - Today is the second day of the Year of the Tiger, a year that experts are regarding as a much better one financially than 2009, especially for Asia. At the recent Citibank market outlook event “Transitioning Into A Brave New World,” Citigold clients heard from financial experts and strategists what the Year of the Tiger has in store for them.

Citi Philippines retail bank director Vipin Agrawal said it has become an annual tradition at Citi to celebrate the Chinese New Year with clients and a team of financial specialists who make sense of global and local reports and how they can affect their investments in the new year.

Citi offers them “two sets of information and insight into the future.” One set is from financial strategies and analysts who wade through global data and make sense out of them to come up with forecasts on financial markets, and other set is grounded on Chinese tradition, given by a geomancer or feng shui expert.

“I can tell you — the audience pays equal attention to both,” said Agrawal.

Citigold routinely engages its clients in a conversation with an international team of financial experts because “what happens in other parts of the world can very easily affect yours.”

Haren Shah, director and senior investment strategist of the Investment Analysis and Advice Group at Citi Asia Pacific, presented the bank’s global outlook for the year, while Ramon Melchor E. Tejero, head of Research, Analysis and Communications of Citicorp Financial Services and Insurance Brokerage Philippines, gave the outlook for the Philippine economic and financial market. And for fun, renowned geomancer Joseph Chau gave his feng shui forecast for the year.

Citi Philippines country head Sanjiv Vohra, who mingled with about 500 Citigold clients from all over Metro Manila, talked about the good news. “We are looking at a much less hostile market and economic environment compared to the beginning of last year,” Vohra said. “Certainly, the general consensus is that the global economy will turn the corner this year with Asia as a region leading the pack. I am glad to say that the optimistic outlook this time around, while still measured, is translating into positive sentiment and renewed confidence. Let’s hope the trend holds for the rest of the year.”

Held at the NBC Tent in Bonifacio Global City, the event was one of the many ways that Citigold holds a financial discussion with its international and local teams. “While our clients do show a healthy interest in protecting and growing their wealth, we take care to initiate a Gold Conversation whenever possible,” said Agrawal. “A Gold Conversation can range from a simple update on one’s balances, to a complex discussion on portfolio allocation, or to a big event such as this one.”

Vohra eyed the event as one more way to cement the bank’s relationship with its clients. “Personally, I look forward to our client events, which give me many opportunities to renew old ties, as well as make new friends. I am proud to say that many of our Citigold clients have been very loyal to Citi; some are relationships we have had from the time we began offering our wealth management service in the country.”

So what do the experts have for us in 2010? Citi strategists say the recovery of the global economy will continue — yes, we will transition into a brave new world and the bounce back will be solid — but the growth will be uneven across the globe. Asia, with the exception of Japan, is expected to have the strongest growth while a more gradual and medium-term recovery is expected of Europe and Japan.

Norman Villamin, head of Citi’s Investment Analysis and Advice, Asia-Pacific, writes in the bank’s Annual Outlook, “While we remain optimistic on the trajectory of the global economic recovery, greater investor caution is warranted as the catalysts which drove global markets through much of 2009 lose their tailwind of government stimulus and the repair of developed market consumer and government balance sheets remain tasks to complete to finally signal the end of the Global Credit Cresis. As a result, our strategy for the first half of 2010 now shifts to a strategy of moderating risk exposure ahead of an expectation of increased volatility in global capital markets.”

For the equity market, Citi analysts say that “the first half of 2010 should fare better than the second half as economic growth indicators remain strong while year-on-year comparisons remain attractive against the challenging backdrop of the first half of 2009.” In the forefront will be Hong Kong, Korea and Taiwan in the first half while Southeast Asian markets are expected to lag behind. “Although growth appears to be strong in China and India, valuations remain the key challenge for investors.”

“The more cautious outlook for the new year is driven largely by the valuation picture within Asia. At 2.1x book value, Asian equities now price a relatively mature economic cycle by historical standards. Indeed, since 1974, Asian equity markets have not reached this valuation level after only one year into economic recovery. Rather, such valuations tend to be more consistent with years three to five years of renewed growth.”

Holding briefings for Citigold in Manila and Cebu, Citi’s Haren Shah, senior investment strategist, said, “One advantage of banking with Citi that has been underlined consistently is our ability to provide information on global markets, with our access to 300 analysts, covering some 2,600 companies in over 50 countries and 140 industries worldwide. And it’s not just information — we also bring to the table market insight as well as timely and relevant information to help our clients take advantage of opportunities and turn this information into profit.”

According to Shah, “inflation is expected to remain subdued in 2010, although emerging markets are more vulnerable to inflationary pressures that may require tighter monetary policy. Growth in central bank balance sheets should abate, and only modest commercial bank loan growth recovery is expected, especially in developed markets. Citi strategists expect United States and United Kingdom policy rates to begin rising in late 2010 while European and Japanese policy rates should remain stable throughout the year. Emerging market policy rates are forecast to begin rising in early 2010.”

“Citi analysts also expect weakness in the US dollar to continue, due to four major factors: 1. Fiscal debt, which has dampened the currency’s appeal for reserve managers; 2. Trade deficit, which point to more depreciation ahead for the weakened currency; 3. US dollar carry trade with almost 0 percent interest rates spurring investors to fund purchases of risk assets via cheap borrowing; and 4. Globalization, for the continued diversification of trade geographically has diminished US dollar’s dominance in trade finance.”

He qualified that overstretched positioning amid little consolidation in the risk rally so far gives some reasons to expect a near term US dollar rebound. “The trigger could come from two sources: a correction in the current risk rally due to failure by the current stimulus-led growth to transition to a private sector-led recovery, or sharper-than-expected tightening of Federal Reserve interest rates that reduces the appeal of carry trades. At this juncture, the first scenario appears more likely.”

“Citi analysts pointed out potential risks to the continued recovery of the global economy. In the United States, policy risk appears in the form of an overly rapid withdrawal from emergency measures enacted by the Federal Reserve in late 2008 rather than the prospect of early rate hikes. In Europe, risks of premature policy tightening appear to be concentrated on increasing fiscal pressures in the United Kingdom and peripheral Euro-zone economies. In China, an unwillingness to strengthen the Renminbi could result in administrative measures to ease domestic asset inflation pressures.” Although measures to date have been moderate, Citi strategists warned that overly aggressive measures could impair the key source of incremental demand growth in the global economy.

How do such events influence the way Citigold clients decide? For one, they are now armed with knowledge of the expected market trends — and can decide whether to move their portfolio or ride it out. They now know the opporutnities they can get in the ermeging markets and take a second look at their assets, liabilities, and income — and get the financial expertise to chart their future.

That’s what drives a Citigold Conversation.

* * *

Citi is one of the largest wealth managers in the Asia Pacific, serving more than 500,000 affluent Citigold clients. In the Philippines, Citi provides wealth management services to affluent clients with a minimum of P4 million or USD80,000 through Citigold.

Call the Citigold hotline at 995-9888 in Metro Manila or at 032-234-9888 in Cebu.

BIZ COLUMN:  A MUCH-IMPROVED  ASEAN WAY HIDDEN AGENDA By Mary Ann Ll. Reyes

MANILA, PHILIPPINES (STAR) - It is not everyday that an association is called upon to literally help make this world a better place to live in.

No less than the leadership of the Association of Southeast Asian Nations (ASEAN) has called on the ASEAN Law Association (ALA) to help in quickening the process of integration in the region, particularly towards the attainment of a full ASEAN community by 2015.

The ALA, an association of members of the judiciary, legal profession, and the academe, is one of the very few groups associated with the ASEAN and recognized in Schedule II of the ASEAN Charter. It is the only ASEAN-wide organization focused on law in the region and was recently tasked with studying and preparing for the role of an ASEAN law in building a rules-based ASEAN community.

The ASEAN Charter was signed on Nov. 20, 2007 and entered into force on Dec. 15, 2007.

According to Supreme Court Chief Justice and ALA Philippines national committee chairman Reynato Puno, while the ASEAN Charter has already come into being, a lot needs to be done to give flesh to the different provisions of the charter.

He noted at the sidelines of yesterday’s ALA governing council meeting that the ASEAN secretary general and the leadership of ASEAN have made a call on all institutions within the region, both governmental and non-governmental to help in speeding up the process of integration in the region, compared to that of Europe, the United States, and even Africa.

In response to this call, the Chief Justice said that ALA has convened and focused its attention in helping the faster integration of the political, economic, social, and cultural processes in the region.

Among the items discussed during yesterday’s meeting, attended by dignitaries from various ALA member-countries, were the agreements on arbitral award enforcement and dispute resolution mechanisms.

Leading the Philippine delegation are ALA Philippine national committee (PNC) deputy secretary general Atty. Eduardo Hernandez, ALA PNC vice-chairman Atty. Alonzo Ancheta, Supreme Court Associate Justice Antonio Carpio, ALA Philippines president Atty. Avelino Cruz, Chief Justice Puno, former Chief Justice Artemio Panganiban, and SC Associate Justice Presbitero Velasco Jr.

Puno adds that there is a great cause to celebrate the coming of the ASEAN Charter, since it not only endowed ASEAN with legal personality but also moves the region from discretion to a rules-based association.

The Chief Justice acknowledges that while much is to be done before the region can approximate the level of integration in Europe and America, in time, they entertain no fear that ASEAN will be able to put into flesh all the principles, postulates spelled out in the Charter.

These, he said, will mean a lot of political and economic benefits to the half a billion people in ASEAN.

Another highlight of ALA 30th anniversary celebration was the holding of the Chief Justice Reynato Puno distinguished lecture series sponsored by the ALA and the Philippine Judicial Academy, with Ambassador Rosario Manalo, Philippine representative to the newly established ASEAN Intergovernmental Commission on Human Rights, as the lecturer.

Under the 1967 ASEAN declaration, ASEAN suffered from lack of legal personality, non legally binding decisions, informal meetings, absence of a political legal framework as well as a set of principles and purposes attuned to the times. It was for these reasons that the ASEAN Charter came into being.

At present, Puno said that the Charter still lacks enforcement mechanisms as it concerns more on promotion and less on protection of human rights. He adds that the challenge to the ASEAN is how the principles so eloquently expressed in its Charter can be put into practice.

Puno pointed out that what is more important is that for the first time, the Charter can be described as more people-oriented and sets out norms of behavior for each member-State to follow.

At the lecture, Ambassador Manalo stressed that the ASEAN Charter reinforces the ASEAN as a serious player in the future of the Asia-Pacific region.

She also emphasized the indispensable role of ASEAN law and system to sustain the ASEAN community.

A high-level legal experts group has been established by the ASEAN to work on the various legal issues of the ASEAN Charter, including the ASEAN’s legal personality, privileges and immunities within ASEAN, and dispute settlement mechanisms. An agreement on the privileges and immunities of ASEAN has been signed last Oct. 25 but is still awaiting ratification while the protocol on dispute settlement mechanisms was signed Jan. 14, 2010 and is expected to be ratified soon.

Different kind of politics

The way the presidential campaigns are being run are making a lot of people sick.

The campaigns are personality-centric. In short, paguapuhan. We can’t blame the candidates. They hire image consultants and advertising agencies which devise campaigns in the same way that they would sell products and services. Catchy slogans and jingles. Well-directed and big budgeted television commercials. Showbiz endorsers.

No wonder many of them panicked when the Commission on Elections (Comelec) threatened to penalize showbiz personalities who endorse candidates under the Fair Election Act.

We have to give it to presidential aspirant Bro. Eddie Villanueva who tried a different tact at campaigning. He chose to prioritize substance over image, commitment over personality, gestures of reconciliation over entertainment. Is this because he didn’t have the financial means to hire professional image enhancers? Maybe.

Villanueva’s campaign launch sent a strong message of rebuke to greedy politicians while, at the same time, setting an example by performing the “washing of the feet.” His Bangon Pilipinas party swears that servant leadership is the type of leadership they would exemplify.

He also tried to show his sincerity when he initiated a Christian-Muslim reconciliation ceremony. Leading Evangelical figure Dan Balais kneeled before Islamic icon leader Aleem Najeb Taher in prayerful repentance of the abuses Christians have committed against Muslims. Taher did the same.

To make the salvo more unforgettable, the biggest Philippine flag ever made was unfurled to signify unity and was meant to inspire action toward the restoration of the greatness of the nation.

Though trailing at the polls, Villanueva has shown his capacity to draw throngs of thousands to participation and action. His opening salvo was the most attended with over 15,000 volunteers and supporters present.


Chief News Editor: Sol Jose Vanzi

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