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February 2018


Foreign direct investments (FDI) into the country streaked to a record-high of $8.7-B YTD in November even as domestic investors and government infrastructure spending drove Gross Domestic Product (GDP) to a 6.7% full-year growth in 2017. These translated into a 16.1% surge in capital goods imports in November. As added booster, exports posted slightly positive gains, while Overseas Filipino Workers? (OFW) remittances continued to expand. The fly-in-the-ointment came from the sharp rise in inflation to 4% in January from 3.3% in December, mostly attributable to higher food and crude oil prices, as well anticipated increases in fuel taxes and some other indirect taxes. While trading volumes and auctions gained in the GS bond market, yields headed north as US Treasuries showed the way. The stock market racked up 6 new records in January but consolidation appeared underway as the market looked overbought, while the US stock market?s plunge into early February pulled the local bourse in the same direction.

January 2018


2017 ended with a bang! With infrastructure spending soaring by ~45% in November and exports still on the rise, our GDP growth forecast of 6.5% to 7% for the full year 2017 appears a no-brainer. Foreign domestic investments have reached $7.9 B YTD by October, nearly the full year 2017 record, even as capital goods imports have recovered. Inflation remained at 3.3% in December, while OFW remittances kept their vitality. The equities market continued to shine, with PSEi ending with another record of 8,558.42 (the 14th for 2017, and 2nd best in Asia), but the bond market saw higher yields, as investors priced in Fed and PH Monetary Board rate hikes in 2018.

December 2017


Foreign direct investments skyrocketed by 68% in September, while exports continued its positive run into September. To help achieve faster growth, inflation eased to 3.3% in November. On the other hand, the equities market saw the initial signs of foreign selling. But bond yields rise due to feeble demand in anticipation of the Fed policy rate hike in December and strong employment data in the US.



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D&L Industries: Turning positive but still a wait and see

March 20, 2018


D & L Industries reported a 10.6% increase in net income to Php2.9bn, in line. (Note that DNL lowered its full-year guidance to single-digit after earnings ended flat in the first half last year but upgraded to 10% after a strong third quarter). Fourth quarter net income managed to end at 12% growth year-on-year (yoy) to Php786mn as revenues increased by 25% driven by a 10.5% increase in high-margin products sales volumes and pick up in commodity margins from 3.9% in Q3 to 4.8% in Q4.

MVP on TEL: May Liwanag and Buhay

March 20, 2018


“Parang Meralco yan, may liwanag ang buhay.” This is how PLDT chair MVP described TEL’s earnings outlook this year during their 4Q/FY 2017 analysts’ briefing at the Makati Shangri-La Hotel, guiding 2018 recurring core profits to a higher Php24bn from last year’s Php22.3bn, which grew 11% versus yearago and in line with its own guidance of Php22bn and consensus estimates. Much of the earnings rise will be from topline growth of 4% from a drop of 3% in 2017, inspired by what looked like a bottoming out of last year’s quarterly wireless revenue drops to its lowest of Php400m in 4Q17 from Php3bn in 1Q17 and market gain share of 200,000 new subscribers overall.

Cautious ahead of policy meetings

March 16, 2018


We expect the market to trade lower as investors remain on a sell down position ahead of the Bangko Sentral ng Pilipinas (BSP) and US Federal reserve policy meetings. The Federal Open Market Committee (FOMC) will discuss its monetary policy today and tomorrow while the BSP Monetary Board will hold its meeting on Thursday, March 22. Consensus expects the BSP to keep the current policy rates unchanged while the Fed is expected to increase rates by 25 basis points.



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