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Subject: BPI Asset Management: THE MORNING VIEW

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News Briefs
February 21, 2020
Local Key Events
  • The Bangko Sentral ng Pilipinas released data showing the Balance of Payments posting a $1.355-billion deficit in January after six months of surplus. This was a reversal from the $2.704 billion surplus in the same month last year. The deficit was mainly driven by the outflows due to the national government's foreign currency withdrawals and net outflows in foreign portfolio investments.
  • Metropolitan Bank and Trust Co. (PSE Ticker: MBT) reported a 27.5% increase in earnings to Php28.06 billion in 2019 as the bank showed consistent improvement in its operating revenues. Metrobank's overall deposits grew by 13.2% to P1.5 trillion, as driven by the 11.44% increase in its current account, savings account or CASA.
Local Indices
  • Local equities rose yesterday as the market digested positive earnings releases. The PSEi ended at 7,413.00 (+0.22% DoD). Top gainer for the day was the Metropolitan and Trust Co.(PSE Ticker: MBT) after it reported income grew 27.5% YoY in 2019. Additionally, its Board of Directors  approved yesterday the declaration of a 5% regular cash dividend to be paid on March 20, 2020.
  • Local fixed income yields fell on continued risk-off sentiment from the COVID-19 with cases in South Korea in the spotlight. On average, yields fell 1.22 bps DoD led by the belly of the curve which dropped 1.80 bps, and followed by the short-end which fell 1.37 bps. Meanwhile, the long-end fell 0.23 bps.
  • The Philippine peso slightly weakened on the back of risk-off sentiment as new cases of the coronavirus disease was reported outside China and amid expectations that the US Federal Reserve will hold its policy rate steady. The USD/PHP pair finished at 50.580 (+0.08% DoD).
US and Europe Indices
  • US equities fell amid uncertainty about the impact of coronavirus. The spread of the virus outside China is creating some anxiety despite slowing rate of infections. The DJIA closed at 29,219.98 (-0.44% DoD) and the S&P 500 ended at 3,373.23 (-0.38% DoD).
  • European equities slipped on the back of heightened fears on the COVID-19 impact on China. This was also weighed down by the report from South Korea on the confimed death and increasing cases of the coronavirus. The MSCI Europe closed at 143.94 (-0.87% DoD).
  • US Treasury yields dropped as investors remained concerned about the potential impact of COVIID-19 to global economy. On average, yields closed at 1.5366% (-3.07 bps DoD), with the 10Y closed at 1.5152% (-5.09bps DoD) and the 2Y closed at 1.3892% (-3.27 bps DoD ).
  • The US Dollar contiued to rise on the back of investors flocking to haven assets due to fears over the coronavirus. Also, investors were optimistic following the US Federal Reserve's upbeat US economic outlook. The DXY index closed at 99.8650 (+0.160%).
Asia Pacific Index
  • Asian equities fell amid increasing worries over coronavirus increasing toll of the infected and dead people from Japan, Singapore and Korea. The MSCI APxJ closed at 550.66 (-0.58% DoD).
Sources: BPI, Business World, PDI, Phil Star, Manila Bulletin, Reuters, Briefing, Bloomberg, CNN, Dow Jones, The Wall Street Journal, CNBC , Market Watch

This material, which is strictly for information purposes only, is for your sole use, does not constitute a recommendation or an offer to sell or a solicitation to buy any financial product. Any information is subject to change without notice and BPI is not under any obligation to update or keep current the information contained herein. You are advised to make your own independent judgment with respect to the matter contained in this document. No liability whatsoever is accepted for any loss that may arise (whether direct or consequential) from any use of the information contained herein.

All funds managed by BPI Asset Management and affiliates are Trust and/or Investment Management Funds, which do not carry any guarantee of income or principal, and are NOT covered by the Philippine Deposit Insurance Corporation. Past performance is not a guarantee of future results. BPI Investment Funds are valued daily using the marked-to-market method.

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