THE MORNING VIEW

THE MORNING VIEW


News Briefs
August 22, 2019
Local Key Events
  • Latest data from the Bureau of Treasury (BTr) revealed that the national government's gross borrowing increased 82.5% YoY to Php840.8 billion in the first half of the year as it ramped up both domestic and external borrowings. Local borrowings amounted to Php615.4 billion (+101.8% YoY), or 73% of gross borrowings. On the other hand, offshore borrowings amounted to Php222.5 billion (+44.7% YoY).
     
  • San Miguel Corporation (PSE Ticker: SMC) will issue bonds up to Php10 billion, with a possible tenor of five years, by late September or October this year.This will be the last tranche of SMC's Php60 billion shelf registration filed with SEC in 2017. The proceeds of the bonds will be used to refinance existing debt.
Local Indices
  • Local equities fell last Tuesday, ahead of the Ninoy Aquino holiday,as recession fears and concerns of the US-China trade war lingered. The PSEi closed at 7,886.91 (-0.65% DoD). Consumer companies, Jollibee Foods Corp. (PSE Ticker: JFC) and Universal Robina Corp. (PSE Ticker: URC) were the worst performers on Tuesday, shedding 3.76% DoD and 2.61% DoD, respectively.
     
  • Local fixed income yields continued to be mixed last Tuesday as investors worry over a possible recession and escalation in US-China trade tensions. On average yields went up by 1.17 bps DoD led by the belly which rose 2.82 bps. Investors continued to pick yields at the short-end of the curve which fell 0.78 bps.
     
  • The Philippine Peso strengthened further, driven by investors optimism as the US government decided to give Huawei Technologies Co. Ltd. a 90-day leeway to buy American-made components to service its existing customers. The USD/PHP pair closed at 52.290 (-0.04% DoD).
US and Europe Indices
  • US equities rose on positive earnings releases, and as the US Fed minutes were released, showing a mild willingness to use monetary policy to manage the slowing economy. The DJIA closed at 26,202.73 (0.93% DoD) while the S&P 500 ended at 2,924.43 (0.82% DoD).
     
  • European equities rose as the Italian government moved toward reform, with President Mattarella meeting various party leaders to seek a way out of the current political crisis. The MSCI Europe closed at 126.56 (1.22% DoD).
     
  • US Treasury yields continued to recover with some relief on US-China trade tensions after the US granted Huawei another 90 days to conduct business with American companies. On average, yields rose by 4.21 bps DoD, with the 10Y up 3.38 bps DoD to 1.5893.
     
  • The US Dollar strengthened Wednesday following some relief to the US-China trade war. The DXY index closed at 98.2950 (0.11% DoD).
Asia Pacific Index
  • Asian equities fell Wednesday, following US indexes decline overnight, on the back of recession fears and as investors look forward to Friday's US economic meeting in Jackson Hole, Wyoming. The MSCI APxJ closed at 494.72 (-0.16% DoD).
Sources: BPI, Business World, PDI, Phil Star, Manila Bulletin, Reuters, Briefing, Bloomberg, CNN, Dow Jones, The Wall Street Journal, CNBC
 

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