Category: Market Insights

Equities Outlook Outlook. The market will likely hold steady at the 8,000-level this week even with the escalation of the trade war and ensuing likely preponderance of weak global economic data reminding investors of the slowdown in both developed and emerging markets. We believe that the pending policy stimulus in the US such as an early US Fed rate cut... Read More

Macroeconomy The expected ramp-up in infrastructure and other NG expenditures should facilitate a rebound in Q2. Softer upticks in prices of key commodities, likewise, will provide extra boost. We think that the downtrend in headline inflation and cuts in the BSP policy rates and RRR will encourage higher investment and consumer spending starting Q2. Impact of El Niño on Q2-2019... Read More

Further Easing Ahead Outlook. Bangko Sentral (BSP) governor Benjamin Diokno promised for more policy rate and reserve requirement (RRR) cuts in the future, but the timing will depend on economic data. Diokno expects inflation to ease below 2% on base effect as soon as this quarter, while he expects GDP will to reach at least 6% again now that the... Read More

Equities Outlook Outlook. After retesting the index’s resistance of 8,200 yesterday, we expect some profit taking in the market as some names have charted new 52wk high. Also shortened trading week this week (Eid’l Fitr) and next week (Independence Day) may prompt some investors to take profits. We expect that May inflation figure (June 5, 2019) coupled with anticipation of... Read More

Flush Liquidity Outlook. We expect yields to remain under pressure ahead of the staggered reserve requirement (RRR) cut this week, next month, and in July. Another factor is the Php112bn budget surplus of the national government and the recent euro and panda borrowings totalling $1.2bn under competitive rates following the Philippines’ recent credit rating upgrade to BBB+. Local yield curves... Read More

Equities Outlook Outlook. We’re looking at the 7,600-7,800 range this week. MSCI rebalancing took effect yesterday (May 28,2019) which was expected to result in a $150m outflow from passive funds. Since the announcement (May 14,2019), the Philippine market saw $220m net foreign outflows but the index held on and even gained 1.31% as of Friday’s close. We think that the... Read More

Liquidity Rally Outlook. Profit taking ensued in the bond market last week following the Bangko Sentral’s (BSP) widely-expected decision to cut the reserve requirement ratio (RRR) by 200bps, which will happen on a staggered basis (100bps in May 31, 50bps by June 28, 50bps by July 26). However, we expect downtrend to resume especially in the short end, where yields... Read More

Equities Outlook Outlook. We expect the index to trade in the range of 7,600 – 7,800 this week after the rally produced by the BSP liquidity easing last week which enabled the PSEi to break above 7,600. Will it stay there? It could as the overhang from MSCI rebalancing subsides, offset by the downside coming from developments in the US-China... Read More

Easing Ensues Outlook. The Bangko Sentral ng Pilipinas (BSP) cut policy rates by 25bps to 4.50% last week but kept the reserve requirement ratio (RRR) at 18%, which disappointed the market that largely expected an RRR cut amid tight liquidity. The BSP indicated that it will discuss an RRR cut during its weekly meeting this Thursday. First quarter GDP came... Read More

Equities Outlook Outlook. We might see the index firm up around the 7,600 support. This support sits close to the index’s two standard deviation below the 5-Yr mean (-2SD) of 16x or 7,545 index level. Long term outlook remains robust as corporates manage to report earnings in line with expectation. Also the weaker than expected GDP and the expectation of... Read More