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Macroeconomy

Superb annual job growth to January 2018, record $10 B FDIs, and strong finish for infrastructure in 2017 all point to an acceleration in the growth path. Significant upticks in the manufacturing sector and capital goods imports in January add to our optimism of above-7% GDP growth in Q1-2018.

Fixed-Income Market

TUS bond market correction in early March provided little comfort as the local bond market shifted its focus on accelerating domestic inflation. Thus, little relief is in sight until the inflation rate (with a new 2012 base, which resulted in lower headline inflation) decelerates and gets accepted by the market as genuine.

Equities Market

Trading is seen to stabilize at 7,900 to 8,300 level, as no major positive drivers will likely surface until the GDP data release in the 2nd week of May (with positive job and manufacturing sector and infrastructure spending outlook expected to boost PSEi). There is a further but slight downward bias due to global and regional geopolitical tensions.

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