October 26, 2020

US equities and European equities fell on the back of the increase in COVID-19 cases. Asian equities gained as China posted positive GDP growth. Global yields rose as investors awaited for developments on the US stimulus package. Global oil prices dropped due to fuel demand setbacks as infections rose. Global Equities  US equities declined as investors remained cautious due to 1.0% 0.77% the surge in the number of COVID-19 cases in the US. This is despite the hopes for an additional fiscal stimulus. The DJIA closed at 28,335.57 (-0.95% WoW), while the S&P 500 closed at 3,465.39 (-0.53% WoW). 0.0%  Asian equities rose as economic recovery accelerated, driven by its Gross Domestic Product (GDP) -0.39% -0.53% growing by 4.9% in July-September from last year, on the -1.0% back of rebound in exports. The MSCI APxJ closed at 585.03 -0.95% (+0.77% WoW). -1.30%  European equities declined following the resurgence of -2.0% COVID-19 cases and reimposition of mobility restrictions. MSCI MSCI MSCI Asia DJIA S&P 500 This was also driven by uncertainties over the Brexit trade World Europe ex-Japan deal. MSCI Europe closed at 120.10 (-1.30% WoW). US Treasuries German Bunds 0.000 2.000 -0.154 16-Oct 23-Oct 16-Oct 23-Oct 1.529 -0.349 1.641 -0.202

-0.500 -0.574 -0.394 1.000 0.746 -0.698 -0.758 -0.773 0.843 -0.622 0.322 -0.674 0.091 0.112 0.143 -0.775 0.377 -0.801 0.000 -1.000 0.107 0.155 0.0863m 6m 2y 5y 10y 30y 1y 2y 5y 10y 20y 30y

 US Treasury yields rose as investors awaited on the COVID-19 stimulus Japanese Government Bonds package. optimism grew following data on the housing market which started to grow by 1.9%. On average, yields rose by 4.44 bps with the 0.500 0.3980 10Y closing at 0.8429% (+9.73 bps WoW).  German bund yields rose for the week driven by the optimism on US 16-Oct 23-Oct stimulus that boosted risk appetite. This is after President Donald Trump 0.300 0.4070 said that he was willing to accept a large aid bill despite opposition. The German bund yields rose by 2.70 bps, and the 10Y yield closed at -0.574 (4.8 0.100 0.0170 bps WoW). -0.087  Japanese bond yields rose as Japanese government bonds dropped in line -0.1450 -0.1410 -0.11 -0.100 0.0360 with US Treasuries driven by the hopes for the US stimulus reaching a deal. On average, yields rose by 1.00 bps with the 10Y yield closing at 0.0360 (1.90 -0.090 -0.10 -0.1330 -0.1330 bps WoW). -0.300  Key events that transpired during the week:  retail sales grew 0.4% to $53.2 billion in August. Building material, -0.500 garden material, and supplies deals rose 4.5%, while food and beverage rose 3m 6m 2y 5y 10y 30y by 0.8%  US jobless claims fell by 55,000, reaching a new pandemic-low of 787,000. The Labor Department alsoCommoditiesrevised its jobless claims two weeks ago to  Global oil declined despite the decrease in the production of oil as 842,000, from the initial 892,000. the surge of COVID-19 cases in the US and in Europe dampened $bbl 23-Oct-2020 % Change sentiment. The rising number of COVID-19 cases are expected to Brent 41.77 -2.70% cause more economic shutdowns, decreasing the demand for fuels derived from oil. Domestic crude oil production fell below 10 million WTI 39.85 -2.52% b/d for the second time in the year, after it averaged 9.9 million b/d BBG Commodity index 73.57 0.25% for the week. Brent oil closed at USD 41.77 (-2.70% WoW) per barrel, while WTI crude closed at USD 39.85 (-2.52% WoW) per barrel.

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October 26, 2020

Local equities finished higher on the back of optimism on economic recovery. Local fixed income yields were mixed as investors awaited developments on the US stimulus and economic recovery. The Philippine peso strengthened amid decline of imports and easing of COVID-19 restrictions.

 Local equities set its best finish since June, ending a week climb at the 6,400 level last Friday. This was driven by net foreign buying as the ban on non-essential tourism was lifted. The PSEi closed at 6,484.06 (+9.93% PSEi Snapshot WoW).  Losses were led by International Container Terminal Services, Inc. (PSE Total Net Foreign Flows (USD Mn) PCOMP ticker: ICT; -1.95% WoW) and Semirara Mining and Power Corporation 50 6,600 (SCC; -0.85%). On the other hand, gains were led by LT Group, Inc. (LTG; +25.58%), Jollibee Foods Corporation (JFC; +21.77%), Alliance Global 6,400 Group, Inc. (AGI; +18.29%), and Metro Pacific Investments Corporation 6,200 (MPI; +0.75%). 0  Key events that transpired during the week: +9.93% WoW; 6,000  Jollibee Foods Corp. (PSE Ticker: JFC) invested approximately Php1.3 Net Foreign Buying: billion to increase its stake in Argon Investments SPC in Titan Dining LP, 5,800 $0.47 Mn the holding entity of the Hong Kong dim sum restaurant chain, Tim Ho -50 5,600 Wan. The deal is set to be finalized by the end of October, making Jollibee ownership in Titan fund to 85% from 65% currently. 10/16 10/19 10/20 10/21 10/22 10/23 The agreement allows JFC to obtain the Tim Ho Wan franchise in the Asia-Pacific region when the tem ends in seven years. PSEi Top/Bottom Performers  The power generation arm of San Miguel Corporation (PSE Ticker: SMC), SMC Global Power raised its 7% senior capital securities issuance to LTG US$400 million from US$300 million as higher demand from 25.58% institutional investors surfaced. The proceeds will be used by the JFC 21.77% company for (1) capital expenditures, (2) investments i n liquefied natural gas resources and other assets, and (3) refinance the existing AGI 18.29% commitments of the corporation. MPI 0.75% SCC -0.85% ICT -1.95%

-5% 0% 5% 10% 15% 20% 25% 30% Local Bond Market Movements  Local fixed income yields were mixed as investors anticipated signs of economic recovery and US monetary policy stimulus negotiations. On average, yields inched down by 0.30 bps. 4.0  Key events that happened during the week: 3.7  The Department of Public Work and Highways (DPWH) signed a Php3.03 3.4 2.891 2.862 2.901 2.924 2.929 2.910 billion contract for the detailed engineering design of the Bataan-Cavite 3.1 Interlink Bridge project. DPWH Secretary Mark Villar mentioned that not only 2.8 will the project cut travel time and ease traffic congestion in the Metro, but it 2.5 is also expected to support development of seaports of the two provinces as 2.2 the premier international shipping gateway to the Philippines. The project will 1.9 be carried out for 15 months starting November 2020 until January 2022. 1.6 2.046 2.033 2.034 2.040 2.049 2.077  The Small Business Corporation (SB Corp.) announced the opening of the 1.3 Bayanihan COVID-19 Assistance to Restart Enterprises (CARES) program on 1.0 October 26, Monday. The program targets to allocate the Php10 billion fund to 10/15 10/16 10/19 10/20 10/21 10/22 50,000 loan approvals for micro, small and medium enterprises, including the tourism industry. SB Corp released guidelines on major loan requirements to 2Y BVAL 10Y BVAL assure a loan.  The Philippine peso strengthened following the relaxation of quarantine restrictions and the decline in Foreign Exchange imports due to subdued global demand. The USD/PHP USD/PHP Previous Close 10/16/20 48.625 pair ended at 48.480 (-0.30% WoW). Closing 10/23/20 48.480  The Euro strengthened amid selloffs in the dollar, EUR/USD Previous Close 10/16/20 1.1718 triggered by fiscal stimulus uncertainty and the US elections. The EUR/USD pair closed at 1.860 (1.21% WoW). Closing 10/23/20 1.1860

Foreign Exchange USD/PHP EUR/USD 1.1822 49.00 1.1769 1.1861 1.1818 1.1860 1.2000 48.75 1.1600 48.50 48.40 48.40 48.40 48.40 48.40 1.1200 48.25 48.00 1.0800 19-Oct 20-Oct 21-Oct 22-Oct 23-Oct

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