THE MORNING VIEW

THE MORNING VIEW


News Briefs
January 24, 2020
Local Key Events
  • Data from Phillippine Statistics Agency (PSA) showed that the Philippines grew 6.4% for 4Q 2019, the fastest growth for the year However, full-year GDP reached an 8-year low at 5.9%. This is the lowest growth rate since the country grew 3.7% on 2011 and the first time the Philippines grew under 6% in 7 years. The lackluster GDP growth can be attributed to the three-and-a-half month budget delay and slower global demand.
     
  • Metro Pacific Tollways Corp, a subsidiary of Metro Pacific Investments Corp. (MPIC), finished roughly half of its Php30bn toll bridge project. The Cebu-Cordova Express Link will be biggest infrastructure project of the company and the first massive infrastructure development of MPIC in Visayas. The 8.5km bridge is expected to be completed next year.

     
Local Indices
  • Local equities rose following the release of 4Q2019 GDP. Moving to 2020, the Bangko Sentral ng Pilipinas (BSP) expects a GDP growth of 7% on the back of timely passage of the budget. The PSEi rose 1.98% DoD closing at 7,616.35.
     
  • Local fixed income yields fell amid dampened market sentiments due to  the ongoing coronavirus outbreak. On the local front, 4Q2019 GDP was in-line with market consensus but was not enough to meet the full-year target of the government. Overall, yields fell 4.38 bps DoD, led by the belly of the curve which declined 7.30 bps. 
     
  • The Philippine peso weakened against the greenback as coronavirus outbreak continue to affect market risk appetite. The USD/PHP pair closed at 50.980 (+0.14% DoD).
     
US and Europe Indices
  • US equities closed mixed as markets closely followed the developments on the new coronavirus. Investors also digested corporate earnings reports. The DJIA closed at 29,160.09 (-0.09% DoD) and the S&P 500 ended at 3,325.54 (+0.11% DoD).
     
  • European equities posted losses along with global markets as investors remain cautious amidst the new virus. Investors compare it with the severe acute respiratory syndrome (SARS) epidemic in 2003 that caused deaths of 800 people. The MSCI Europe closed at 141.07 (-0.68% DoD).
     
  • US Treasury yields retreated as China's coronavirus prompted risk-off sentiment. China locked down the Wuhan province, the virus' origin. On average, yields closed at 1.5521% (-1.96 bps DoD), with the 10Y ending at 1.7325% (-3.66 bps DoD) and the 2Y closing at 1.5137% (-1.46 bps DoD).
     
  • The US Dollar  slightly strengthened as investors flock to safe havens with coronavirus spreading. The DXY index closed at 97.6930 (+0.17%).
     
Asia Pacific Index
  • Asian equities erased previous trading day's gains on increasing worries over the virus outbreak. News reported at least 600 cases and 18 fatalities due to the said disease. In response, China has quarantined two cities to contain the situation. The MSCI APxJ closed at 560.10 (-1.05% DoD).

     
Sources: BPI, Business World, PDI, Phil Star, Manila Bulletin, Reuters, Briefing, Bloomberg, CNN, Dow Jones, The Wall Street Journal, CNBC , Market Watch
 

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