Weekly Fixed Income Summary : May 20 – May 24, 2019

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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

Weekly Equities Summary and Outlook : May 20 – May 24, 2019

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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

Weekly Fixed Income Summary : May 13 – May 17, 2019

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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

Weekly Equities Summary and Outlook : May 13 – May 17, 2019

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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

Weekly Fixed Income Summary : May 6 – May 10, 2019

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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

Weekly Equities Summary and Outlook : May 6 – May 10, 2019

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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

Weekly Equities Summary and Outlook : April 29 – May 3, 2019

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Equities Outlook Outlook. Expect some profit taking on rally this week which may bring the PSE to 7,800-7,900. Philippine April inflation came in at 3.0%, lower than the median forecast of 3.1%. We believe that despite the easing inflation, this will be offset by weakness in 1Q19 Philippine GDP and heightened volatility brought by Trump’s tough stance on tariff against... Read More

Weekly Fixed Income Summary : April 26 – May 2, 2019

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Policy Easing Outlook. We expect bond yields to be rangebound after the rally last week as the market awaits the Bangko Sentral’s (BSP) move this Thursday. Lower April inflation print bolsters view of faster easing but this may weaken the peso as a Fed cut this year grows more uncertain due to inflationary tariffs (25% from 10%) on $200bn worth... Read More

The Market Call | April 2019

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Macroeconomy Elevated NG spending on infrastructure projects, coupled with the spill-over effects of the election should keep growth momentum in Q1 steady. Moreover, the downtrend in inflation print augurs well for higher consumer spending and leads us to expect cuts in reserve ratio requirement (RRR) in Q2. The peso’s recent gains should prove temporary given the huge trade imbalance and... Read More

Weekly Equities Summary and Outlook : April 22 – April 26, 2019

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Equities Outlook Outlook. Standard & Poor’s (S&P) raised the Philippines sovereign credit rating from BBB to BBB+ with stable outlook. Thus, PSEi may rally and easily break above 8,000 on account of the credit rating. The market will also take its cue from the April inflation print and earnings results this week from Metro Pacific Investment Corp., Integrated Micro-Electronics, Inc.,... Read More