Weekly Fixed Income Summary : August 06 – August 10, 2018

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Breakout Inflation Amid Slowdown Outlook. A much slower-than-expected GDP growth of 6.0% in the past quarter rained on the parade of a 50-bp rate hike last week. Peaking inflation slowed private consumption, 73% of gross domestic product, to just 5.6% growth from 5.7% in the first quarter and spoiled the 20.7% growth in investments (from 12.4% in Q1). The 2Q... Read More

Weekly Equities Summary and Outlook : August 6 – August 10, 2018

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Equities Outlook Outlook. We expect the PSEi to trade between 7,600-7,900, with a downward bias as the market digests lower-than-expected Q2 GDP and Monetary Board’s (MB) 50-bp rate hike, coupled with weaker global sentiment amidst contagion fears over Turkey’s currency crisis that could spread to Europe given European lenders’ huge exposure to Turkish debt. Meanwhile, earnings results of 25 out... Read More

Weekly Fixed Income Summary : July 30 – August 03, 2018

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July Inflation Cements August BSP Hike Outlook. There is strong upward bias on the yield curve as July inflation clocked in at 5.7%, beating consensus expectation of 5.5%, near the top-end of the Bangko Sentral’s (BSP) forecast range of 5.1%-5.8%, higher than June’s 5.2%, and a five-year high. Food and non-alcoholic beverages led the growth at 7.1%. The high figure... Read More

Weekly Equities Summary and Outlook : July 30 – August 3, 2018

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Equities Summary and Outlook Outlook. We expect the PSEi to trade sideways, within the 7,700-7,800 range, ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting and Q2 GDP results on August 9, and more earnings releases from heavily-weighted stocks such as GLO, SM, SMC, TEL, MEG and AGI to be released this week. Yesterday, SMPH and ALI announced their... Read More

Weekly Equities Summary and Outlook : July 23 – 27, 2018

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Equities Outlook Outlook. We expect the PSEi to hover around 7,600-7,900 as the market awaits the release of PH’s Q2 GDP (est: 6.7%) and the Monetary Board meeting, which is widely anticipated to raise policy rates by at least 25 bps, both are scheduled on Aug. 9. So far, H1 earnings results were mixed: MBT (+16% to P11bn, outperform), BDO... Read More

Weekly Fixed Income Summary : July 23 – 27, 2018

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Accelerating Inflation Outlook. Expectations of 1) a Bangko Sentral ng Pilipinas (BSP) rate hike in August spurred by rising inflation expectations, and; 2) faster US economic growth in the past quarter drove local benchmark yields higher by an average of 11bps last week. The BSP expects July inflation to rise between 5.1%-5.8%, higher than June’s 5.2% and the Department of... Read More

The Market Call | July 2018

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Macroeconomy More recent positive real sector data, along with robust gains in jobs creation and bullish consumer sentiment in Q2 & Q3, point to a faster 7% growth trajectory in Q2. We maintain our view that inflation will have little upside and should taper off starting in Q3. Fixed-Income Market As local bond investors put more emphasis on the specter... Read More

Weekly Equities Summary and Outlook : July 16 – 20, 2018

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Equities Summary and Outlook Market Outlook. We expect the PSEi to trade sideways as investors wait for catalysts ahead of the first half 2018 earnings results and amidst continued trade war tensions. There’s downward bias as Pres. Donald Trump threatened the expansion in tariffs to more than $500bn worth of goods imported from China. Additionally, G-20 finance ministers and central... Read More

Weekly Fixed Income Summary : July 16 – 20, 2018

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Fifty Basis Point-Hike Likely Outlook. Affirmation of the Philippines’ credit rating and outlook from Moody’s, Fitch, and S&P provided a brief respite for bond investors after weeks of local and global economic and geopolitical uncertainty. Both Moody’s and Fitch maintained the country’s BBB/Baa2 rating – a notch above investment grade – while maintaining a stable outlook. Meanwhile, S&P upgraded its... Read More

Weekly Fixed Income Summary : July 09 – 13, 2018

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The Cost of Federalism Outlook. Global geopolitical and local political noise put investors on the defensive and will keep the yield curve elevated in the near-term. Ongoing discussions about a shift to federalism is getting more traction, but economists and analysts are warning about the ill-effects of the shift to the economy. Fiscal deficit to GDP ratio is estimated to... Read More