Latest Views

February 2020


Suddenly, it’s all about the new 2019 coronavirus (COVID-19) inflicting harm on the global economy and the financial markets. We expect it to slash PH tourism and Q1 GDP growth. But assuming that it ends in the summer like SARS, we see the economy roaring back starting Q2. Ramped up infrastructure and expansive private construction and consumer spending should lead domestic demand back into the driver seat. Renewed global economic slowdown which will drag down foreign interest rates, together with more favorable domestic developments easing inflation and another 25 bps cut in policy rates make bonds especially attractive in H1. However, the negative sentiment it has stirred, coupled with regulatory uncertainties, bodes ill for the PSEi for the same period. We do expect robust GDP rebound and strong corporate earnings.

January 2020


We foresee renewed fast growth of 6.2% to 6.6% for the Philippine economy in 2020 as Q4-2019 GDP growth accelerated to 6.4% from 6% a quarter ago. The faster pace will likely spill over to the entire 2020 with similar drivers as in Q4-2019—NG operational and capital spending as well as solid consumer spending given the robust job gains in in the last three quarters of 2019. With NG P4.1-T budget already approved, infrastructure spending may soar by 34.6% as planned. Bond markets look attractive in H1 while the equities market will deliver once the fears of a global pandemic from coronavirus fade. However, a much stronger eruption of Taal volcano and prolonged spread of the novel corona virus could slow the economy slightly, but negative investor sentiment from it may delay PSEi’s recovery.

December 2019


The overall outlook has turned rosier. At the macro level, huge employment gains in 2019 and the rapid decline in poverty rates from 2015 to 2018, plus low inflation rates (well within targets), renewed vigor in infrastructure spending, and robust OFW remittances should spur above-average consumer spending growth. Meanwhile, bond investors took a more cautious stance in November which showed tenders in auctions and volumes in secondary markets tumble, albeit with little effect on yields. The equity market proved resilient to the foreign selling (due to MSCI-EM rebalancing) and a more solid, consolidated base should provide a good springboard for PSEi’s upward thrust in 2020.










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The Bear is Out

PSEI: The Bear is Out

March 9, 2020


Still due to the rising infection rates of COVID19 worldwide, global equity indices were down last week (wow) and year-to-date (ytd), continuing their path to correction territory; MSCI World Index, 0.38% wow and -8.87% ytd; MSCI Emerging Market 0.65%, wow, -9.20%; Stoxx Europe 600 Index, 0.34%, -11.20% ytd. After being flattish last week, up by 0.3%, PSEi collapsed to bear market ground in today’s closing (March 9, 2020), losing 457.77 pts or 7.2% to 6,312.61 after government announced a public health emergency due to COVID19’s local transmission, a more dangerous 2nd phase of spread.

Central Banks vs COVID-19

Central Banks vs COVID-19

March 3, 2020


Central banks and governments from US, Asia to Europe are on a bigger defensive stance against the virus hit on global growth, embarking or mulling further fiscal and monetary policy stimulus. The question is will the necessary stimulus be sufficient to avert a global recession?


Ayala Land’s AREIT: Will peers follow?

February 20, 2020


REIT is an asset class that could be ripe for the Philippine market, touted as a recession-hedged investment. It has a tendency to outperform equity indexes amid market volatility and weak market conditions. Thailand’s REIT is a case in point. Table 1 on the left shows the total return of the REIT index at 99.99% (2015 to Feb. 19, 2020), greater than the main market index’s +10.90% and property index of Thailand, -8.26%.










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