Go To Homepage BAIPHIL 23 Apr 2021 MARKET WATCH Legend Improvement / Up Deterioration / Down
Responsive and Sustainable Banking in the New Normal No Movement
FINANCIAL MARKETS AT A GLANCE
Currency Exchange1 Current Previous Domestic Stock Index3 Current Previous USD/PHP 48.4100 48.4500 PSEi 6,415.53 6,439.39 USD/JPY 107.9500 108.0900 Trade Value (Php B) 5.651 5.371 USD/CNY 6.4918 6.4909 Stock Index4 Current Previous EUR/USD 1.2024 1.2039 NIKKEI 225 29,118.17 28,508.55 GBP/USD 1.3857 1.3939 FTSE 100 6,935.24 6,895.29 PHP BVAL DOW JONES 33,815.90 34,137.31 Current Previous Reference Rates2 S&P 500 4,134.89 4,173.42 30-Day 1.2716 1.2544 NASDAQ 13,818.41 13,950.22
91-Day 1.3645 1.3405 Various5/6 Current Previous 180-Day 1.6525 1.6137 Brent Crude (USD/bbl) 65.52 65.15 1-Year 1.8927 1.8957 3-M US Treasury Yield 0.03% 0.03% 3-Year 2.6914 2.7181 5-Y US Treasury Yield 0.81% 0.81% 5-Year 3.2114 3.2046 10-Y US Treasury Yield 1.57% 1.57% 10-Year 4.1773 4.1891 .
PHILIPPINES
Stocks fall further; investors seek opportunities overseas. The local stock market dropped further as investors seek better opportunities in countries that are better at handling the pandemic. The PSEi shed 23.86 points or 0.37 percent to close at 6 ,415.53 as all sub-indices fell across the board. Foreigners were still net sellers, contributing to the market’s decline and that the low trading volume shows that many investors are still staying on the sidelines amid the elevated risks. https://mb.com.ph/2021/04/22/stocks-fall-further-investors-seek-opportunities-overseas/
Peso rebounds vs dollar on oil price correction, gov’t offer of euro bonds. The peso rebounded versus the greenback on Thursday as oil prices corrected and after the government raised €2.1 billion from its offer of euro-denominated bonds. The local unit closed at P48.41 per dollar on Thursday, appreciating by four centavos from its P48.45 finish on Wednesday, based on data published on the Bankers Association of the Philippines’ website. https://www.bworldonline.com/peso-rebounds-vs-dollar-on-oil-price-correction-govt-offer-of-euro-bonds/
Monetary policy remains appropriate — Diokno. The Bangko Sentral ng Pilipinas’ (BSP) accommodative monetary policy stance remains appropriate to support the economy’s recovery, officials said, vowing to keep a close eye on inflation. “Looking ahead, the BSP will continue to look closely in the near term for signs of inflation becoming broader based in order to safeguard the public’s inflation expectations,” BSP Governor Benjamin E. Diokno said at a virtual briefing. The Monetary Board’s next policy-setting meeting is set on May 13. https://www.bworldonline.com/monetary-policy-remains-appropriate-diokno/
BSP: PH on track in digital banking, financial inclusion goals despite pandemic Speaking at an online forum of the Asian Development Bank Institute (ADBI), BSP Governor Benjamin Diokno described his vision for the Philippines as a digital-heavy, cash light society. “Fifty percent or half of all transactions should be digital by 2023 and 70 percent of Filipino adults should have formal bank accounts by 2023,” he told a group led by ADBI Dean Tetsushi Sonobe ahead of the multilateral lender’s annual meeting next month. The BSP role was to enable safe and easily accessible financial products and services for all, Diokno said. Cybersecurity is top of mind for the BSP as it seeks to build public trust in digital banking. Speaking on behalf of the entire BSP, Diokno said the agency “will not allow the pandemic to take away our focus on structural reforms.” https://business.inquirer.net/321559/bsp-ph-on-track-in-digital-banking-financial-inclusion-goals-despite-pandemic
Banks expect strict lending standards in Q2. Lenders are seeing credit rules on loans to businesses and households to become tighter in the second quarter as the country’s economic outlook remain uncertain, according to the Bangko Sentral ng Pilipinas (BSP). Results of
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the central bank’s First Quarter 2020 Senior Bank Loan Officers’ Survey showed that some banks continued to see tighter rules for loans to enterprises and individual borrowers for April to June after it used the diffusion index (DI) approach. They cited “more uncertain outlook on the economy along with deterioration in borrowers’ profiles, and banks’ lower tolerance for risk,” and “less favorable economic outlook as well as expected deterioration in borrowers’ profile” as reasons. On loan demand, DI-based results indicated that lenders anticipated a net increase in overall loan demand from firms and households. https://www.manilatimes.net/2021/04/23/business/business-top/banks-expect-strict-lending-standards-in-q2/866713/
Philippines raises €2.1B from euro-denominated global bond sale. The Philippine government said Thursday it has successfully returned to the international capital markets for the second time this year, raising €2.1 billion from the issuance of euro-denominated global bonds to support the country’s budgetary requirements. The latest offering consists of four-year, 12-year, and 20-year bonds. The four-year bonds have a coupon rate of 0.250%, the 12-year bonds have a 1.200% coupon rate, while the 20-year bonds have a coupon rate of 1.750%. The transaction marks the largest euro-denominated transaction and the first triple-tranche euro-denominated offering from the Philippine government, according to the Bureau of the Treasury. https://www.gmanetwork.com/news/money/economy/784710/philippines-raises-euro-2-1b-from-euro-denominated-global-bond-sale/story/
State bonds to stay most appealing, but equities worth a second look. Government bonds will likely stay appealing to investors as rising inflation and bleak economic outlook drive them to safety, although more risky corporate assets and equities may be worth a look especially with the central bank pledging to keep rates low for the time being. “ROPs will continue to mildly attract investors in search of better returns amidst stable currencies especially considering the robust external position of the country,” analysts at First Metro Investment Corp. (FMIC), an investment bank, and University of Asia & the Pacific (UA&P) said in their monthly joint report released Thursday. https://www.philstar.com/business/2021/04/22/2093011/state-bonds-stay-most-appealing-equities-worth-second-look
ADB sees PH economy to remain in ‘fragile’ state in H1. The Philippine economy is seen to remain in a “fragile” state in the first half of 2021 even as the mass vaccination against COVID-19 and the rollout of massive infrastructure projects would aid rebound in the near term, an official of the Manila-based Asian Development Bank (ADB) said on Wednesday. In an online roundtable discussion, ADB country director for the Philippines Kelly Bird pointed to the uncertainty caused by the pandemic globally and locally, and it did not help that the Philippines had yet to flatten the virus infections curve. Bird said the prolonged quarantine would delay the opening of the economy and its recovery from the pandemic-induced recession. The ADB will release its updated economic forecasts for the Asia-Pacific region next week. https://business.inquirer.net/321505/adb-sees-ph-economy-to-remain-in-fragile-state-in-h1
7 million must be vaccinated in NCR to trigger economic recovery —OCTA. The government needs to vaccinate around seven million residents of the National Capital Region (NCR) to trigger economic recovery, OCTA Research fellow Prof. Guido David said Thursday. In an interview on Balitanghali, David said 30 to 50 percent of Filipinos residing in Metro Manila should get COVID-19 jabs to control transmission and to prevent another outbreak. David also emphasized that the lifting of restrictions should also be calibrated to ensure safety of the people. https://www.gmanetwork.com/news/money/economy/784762/7-million-must-be-vaccinated-in-ncr-to-trigger-economic-recovery-octa/story/
Duterte appoints Karl Chua as NEDA chief. President Rodrigo Duterte has finally appointed Karl Kendrick Chua as the new secretary of the National Economic and Development Authority (NEDA), Malacañang announced on Thursday. Chua’s appointment came a year after the President tapped him in an acting capacity following the resignation of then-NEDA chief Ernesto Pernia. https://www.manilatimes.net/2021/04/22/news/duterte-appoints-karl-chua-as-neda-chief/866568/
Banks still sustain coal financing despite climate change problems, says group. In a statement Thursday, Withdraw from Coal (WFC) said that based on their Coal Divestment Scorecard, overall funding by local banks for coal projects in the country remains on an upward trend. The scorecard is a tool developed by WFC to help Philippine banks and their stakeholders assess their exposure to coal and the accompanying risks and impacts of financing it. The WFC said their April 2021 scorecard is an invitation to Philippine banks for continued engagement with their stakeholders to advance sustainability and climate ambitions and an encouragement to seize opportunities to “fast- track the country’s energy transition.” https://business.inquirer.net/321541/banks-still-sustain-coal-financing-despite-climate-change-problems-says-group
BPI keen on bidding for Citi Philippines business. At a virtual briefing on Thursday, BPI president and Chief Executive Officer Jose Teodoro "TG" Limcaoco said the bank has already received feelers from Citi Philippines. "Most likely we will be interested, to be honest. It's a great business," he added. According to BPI Executive Vice President and Mass Retail Head Marie Josephine Ocampo, Citibank's portfolio is among the factors making it attractive. Limcaoco said there is still no clear picture on the ticket size, but BPI currently has sufficient capital to finance the possible transaction internally, based on the capital ratios. https://www.gmanetwork.com/news/money/companies/784748/bpi-keen-on-bidding-for-citi-philippines-business/story/
BPI net income shrinks 22% to P5 billion in first quarter. Bank of the Philippine Islands posted a 21.7 percent drop in net income to P5.0 billion for the first quarter of 2021 although pre-tax income is higher by 5.1 percent. In a disclosure to the Philippine Stock Exchange, the bank said the drop is due to one-time tax adjustments in connection with previously booked loan provisions because of the effectivity of the CREATE law. https://mb.com.ph/2021/04/22/bpi-net-income-shrinks-22-to-p5-billion-in-first-quarter/
Discovery Group to open combination of hotels and hostels in Palawan, Siargao. Luxury resort developer Discovery Group is set to put up a combination of hostels and hotels which will initially be located in famous tourist destinations across the country—two in Palawan, and another in Siargao. In a regulatory filing, Discovery Hospitality Corp. (DHC) announced the development of its new lifestyle and millennial-focused brand Kip & Kin which combines the hotel and hostel approach in a single property. https://www.gmanetwork.com/news/money/companies/784727/discovery-group-to-open-combination-of-hotels-and-hostels-in-palawan- siargao/story/
Vista Land 2020 net income down 45%. Villar-led Vista Land & Lifescapes Inc. (VLL) on Thursday reported a 45% decline in its bottom line for 2020, reflecting the impact of the COVID-19 pandemic on business. VLL recorded a consolidated net income of P6.4 billion, while
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consolidated total revenues dropped 26% to P32.7 billion. "The past year truly challenged our ability to move forward despite the presence of a global health crisis," VLL chairman Manuel Villar, Jr. said in a regulatory filing. https://www.gmanetwork.com/news/money/companies/784765/vista-land-2020-net-income-down-45/story/
REST OF THE
WORLD
Asia joins global equity rebound; oil weak on COVID-19 worries. Asian stocks rose on Thursday, extending a rebound in global markets following a sharp selloff earlier this week, while oil prices eased again on worries that rising COVID-19 cases in some countries will dampen fuel demand. Asian stocks rose on Thursday, extending a rebound in global markets following a sharp selloff earlier this week, while oil prices eased again on worries that rising COVID-19 cases in some countries will dampen fuel demand. https://www.reuters.com/article/us-global-markets/asia-joins-global-equity-rebound-oil-weak-on-covid-19-worries-idUSKBN2C905B
Dow closes more than 300 points lower following reports of Biden eyeing capital gains tax hike. The Dow Jones Industrial Average dropped 321.41 points, or 1%, to 33,815.90. At its low of the day, the blue-chip benchmark fell 420 points. The S&P 500 erased earlier gains and closed 0.9% lower at 4,134.98, while the Nasdaq Composite slid 0.9% to 13,818.41. Bloomberg News reported Thursday afternoon that Biden is planning a capital gains tax hike to as high as 43.4% for wealthy Americans. The proposal would hike the capital gains rate to 39.6% for those earning $1 million or more, up from 20% currently, according to Bloomberg News, citing people familiar with the matter. Reuters and the New York Times later matched the headlines. https://www.cnbc.com/2021/04/21/stock-market-futures-open-to-close-news.html
European Equities End Firmly. Higher European stock markets closed near record high levels, with the DAX 30 adding 0.8% at 15,321 and other major bourses rising between 0.6% and 1.5%, after the ECB left monetary policy unchanged and maintained its pledge to increase support if needed. President Lagarde said at the press conference that economic activity is seen rebounding firmly in the course of 2021, even as the near-term economic outlook remains uncertain. https://tradingeconomics.com/germany/stock-market
Gold Trades Around 2-Month High. Spot gold was slightly down at $1,790 per ounce on Thursday, but still near a 2-month high reached yesterday, supported by broad dollar weakness and lower Treasury yields. https://tradingeconomics.com/commodity/gold
ECB Leaves Monetary Policy Unchanged. The ECB left monetary policy unchanged during its April meeting, as officials took a wait-and- see approach after last month’s decision to conduct emergency bond purchases at a significantly higher pace over Q2. Interest rates were kept at record-low levels and the PEPP quota was maintained at €1.85 trillion with the buys to run at least until March 2022. President Lagarde said that economic activity is seen rebounding firmly in the course of 2021, but the near-term economic outlook remained uncertain. https://tradingeconomics.com/euro-area/interest-rate
Eurozone Government Budget Gap Nears Record High. The government deficit to GDP ratio in the Euro Area rose to 7.2 percent in 2020 from 0.6 percent in 2019, amid efforts to curb the spread of COVID-19 and support businesses and households hit by the pandemic. It was the largest gap since a record high of 7.3 percent hit in 1995. All Member States, had deficits higher than 3 percent of GDP. The government debt to GDP ratio increased to 98 percent at the end of 2020, from 83.9 percent at the end of 2019 https://tradingeconomics.com/euro-area/government-budget
US Weekly Jobless Claims Fall to New Pandemic Low. The number of Americans filing new claims for unemployment benefits dropped to 547 thousand in the week ending April 17th, the lowest level since March 2020, when mandatory closures of non-essential businesses were enforced across many states to curb the spread of COVID-19. Claims came in also below market expectations of 617 thousand, as continued moves to reopen the economy supported the labor market, helped by the White House's massive $1.9 trillion pandemic rescue package and an acceleration in the pace of COVID-19 vaccinations. https://tradingeconomics.com/united-states/jobless-claims
Compliance to Operational Risk Guidelines – 23 April 2021 Understanding the FIST Law and IRR – 26 April 2021 Related Party Transactions – 29 April 2021 Creative Problem Solving – 10-11 May 2021 Fraud & Forgery Detection and Prevention – 13-14 May 2021 Securing Work-From-Home Setup – 25-26 April 2021 Operational Aspects of the NRPS – 27 May 2021 IT Security in Banking Operations – 15-18 June 2021
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As we celebrate the 80th anniversary of BAIPHIL, our 31st NATIONAL CONVENTION goes VIRTUAL and TECH- POWERED! Register now and join us on May 19-21, 2021, from 2:00 P.M. to 6:00 P.M. as we hear from sevearl speakers on this year’s theme: Responsive & Sustainable Banking in the New Normal.
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For any concerns with registration, please email us at [email protected].
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REFERENCES
1 Reuters: https://www.reuters.com/finance/currencies 2 Philippine Dealing System: http://www.pds.com.ph/ 3 Philippine Stock Exchange: http://www.pse.com.ph/stockMarket/home.html 4 Reuters: https://www.reuters.com/markets/stocks 5 Bloomberg: https://www.bloomberg.com/markets/commodities 6 CNN Money: https://money.cnn.com/data/bonds/
OTHER REFERENCES / EXTERNAL LINKS
Philippine Stock Exchange: http://www.pse.com.ph/stockMarket/home.html CNN Money: http://money.cnn.com/ Philippine Dealing System: http://www.pds.com.ph/ Bangko Sentral ng Pilipinas: http://www.bsp.gov.ph/ GMA News Online: http://www.gmanetwork.com/news/ Bankers Association of the Philippines: http://bap.org.ph/ BPI Asset Management: https://www.bpiassetmanagement.com/ Bureau of Treasury: http://www.treasury.gov.ph/ Business World: http://bworldonline.com/ Philippine Statistics Authority: https://psa.gov.ph/ Philippine Daily Inquirer: http://business.inquirer.net/ Trading Economics: https://tradingeconomics.com/ Philippine Star: https://www.philstar.com/business/ South China Morning Post: http://www.scmp.com/ ABS-CBN News: http://news.abs-cbn.com/business/ Japan Times: https://www.japantimes.co.jp Manila Bulletin: https://mb.com.ph/ The Japan News: http://www.the-japan-news.com Manila Standard: http://manilastandard.net/ Market Watch: https://www.marketwatch.com/ Philippine News Agency: www.pna.gov.ph Asia Nikkei: https://asia.nikkei.com/ AutoIndustriya: https://www.autoindustriya.com/ Straits Times: https://www.straitstimes.com/global The Wall Street Journal: https://www.wsj.com/asia/ Channel News Asia: https://www.channelnewsasia.com/ Reuters: https://www.reuters.com/ CNBC: https://www.cnbc.com/ Bloomberg: https://www.bloomberg.com/markets/ The New York Times: https://www.nytimes.com/ Business Mirror: https://businessmirror.com.ph/ Gulf News: https://gulfnews.com/
COMPILED AND PREPARED BY: RACHELLE A. FAJATIN, Corporate Communications and Information Exchange Committee
DISCLOSURE: The BAIPHIL Market Watch (BMW) is for informational purposes only. The content of the BMW is sourced from third party websites and may be subject to change without notice. Although the information was compiled from sources believed to be reliable, no liability for any error or omission is accepted by BAIPHIL or any of its directors, officers or employees, and BAIPHIL is not under any obligation to update or keep current this information.
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