|Bid||10.81 x 29200|
|Ask||10.86 x 27000|
|Day's Range||10.78 - 10.92|
|52 Week Range||9.22 - 13.77|
|Beta (3Y Monthly)||1.35|
|PE Ratio (TTM)||8.17|
|Forward Dividend & Yield||0.77 (7.25%)|
|1y Target Est||16.00|
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. The Philippine economy is likely to recover in the second half of the year, allowing the central bank to differentiate its policy from peers that are also cutting interest rates, a deputy governor said.While most other economies are slowing, growth in the Philippines is set to pick up as government spending ramps up after a budget standoff was resolved in April, Francis Dakila said in an interview Monday in Manila, his first with foreign media since taking office in July.“I want to differentiate the Philippines compared to other economies on easing cycle,” he said. In many other countries, “their economies are slowing down. In the Philippines what we had is slower-than-expected growth, but there’s an identifiable reason for that, which is the budget delay.”A global slowdown and the U.S.-China trade war have taken a toll on emerging Asia, where many countries depend on exports to drive growth. Central banks across the region have taken advantage of the benign inflation environment to ease monetary policy, including the Bangko Sentral ng Pilipinas, which has cut its benchmark interest rate by 50 basis points so far this year.‘Normalizing’ RatesDakila described the rate cuts as a process of “normalization” to undo some of last year’s tightening, when the BSP raised rates by 175 basis points.The four-month delay in passing the budget dragged Philippine growth to 5.5% in the second quarter, its slowest pace in more than four years. With the impasse now resolved, government spending is expected to accelerate in the second half of the year.“Indications are that for the second half of the year, growth numbers would be better,” Dakila said.Recovering domestic growth means the central bank might not have to provide too much monetary support.“A 25-basis-point key rate cut for the rest of the year would be enough to support the economy,” said Nicholas Mapa, a senior economist at ING Groep NV in Manila. “That also leaves the central bank space to cut further in 2020 if all hell breaks loose.”Policy makers next meet on interest rates Sept. 26. Governor Benjamin Diokno has promised another quarter-point cut by the end of the year, as well as continued reductions in the proportion of deposits banks must hold in reserve, a step designed to push more money into the economy.“Let’s leave it at the forward guidance of the governor,” Dakila said. “I wouldn’t characterize the economy as slowing down. So you can think of that as a signal.”Subdued InflationDakila, 59, became deputy governor in charge of monetary policy when Diwa Guinigundo retired in July. A former assistant governor, Dakila has been at the BSP for 23 years and was part of the team that prepared the bank for its shift to an inflation-targeting regime in 2002.The deputy governor said inflation for the rest of the year will likely come in below the bank’s 2%-4% target, partly due to base effects and lower oil and rice prices. Inflation will remain within the target range throughout 2020, he said.Data due Thursday will likely show consumer prices rose 1.8% in August, according to a Bloomberg survey of economists. That would be the first reading below 2% in nearly three years.Other points Dakila made in the interview:The central bank remains on track to cut banks’ reserve requirement ratio to below 10% by 2023 from 16% now. Further reductions will depend on how low and stable inflation is and whether banks are using funds from previous RRR cuts to boost lending to productive industriesBSP aims to issue its own securities in the second quarter of 2020 as a tool to mop up excess liquidity in the financial system, allowing the bank to better influence market interest rates. It’s considering issuing securities with tenors of one month to one year, with the frequency of sales depending on the money supply(Updates with economist’s comment in ninth paragraph)To contact the reporter on this story: Siegfrid Alegado in Manila at firstname.lastname@example.orgTo contact the editors responsible for this story: Cecilia Yap at email@example.com, ;Nasreen Seria at firstname.lastname@example.org, Michael S. ArnoldFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Since getting burned in the financial crisis, HSBC Holdings Plc has been in sell rather than buy mode. But now that it’s out shopping, the bank is looking to splurge. HSBC is eyeing the Asian assets of struggling British insurer Aviva Plc, which could be worth between $3 billion and $4 billion, Bloomberg reporters Dinesh Nair, Manuel Baigorri and Stefania Spezzati wrote Thursday. That would make it one of the bank’s largest purchases since it bought subprime lender Household International for $15.5 billion in 2003.The London-based lender should be prepared to pay even more: Aviva is sure to have many suitors. While the company had a difficult run in Asia, a buyer with more regional presence could better navigate the regulatory hurdles of a fractured market. The bulk of Aviva’s Asian assets are in Singapore, where a large pool of affluent residents has helped gross written premiums rise 13% per year industry-wide, according to Bain & Co. Aviva has 885,000 customers in the Southeast Asian country and was the sixth-largest insurer in Singapore last year – ahead of HSBC. The company accounted for 4.2% of the city-state’s insurance assets in 2018, says Bloomberg Intelligence analyst Steven Lam.A rare, large asset like Aviva is bound to pique the interest of FWD Group Ltd., which Hong Kong billionaire Richard Li built from the ashes of Dutch insurer ING Groep NV’s Asian businesses. FWD, widely believed to be preparing for an initial public offering, has been busy buying assets: Late last year, it snapped up an 80% stake in Commonwealth Bank of Australia’s Indonesian life insurance arm for A$426 million ($302 million). The Japanese, meanwhile, have been avid acquirers of Southeast Asian insurance assets for years, as low growth and negative bond yields at home crimp the savings of its aging population. Just this week, Japan's Taiyo Life Insurance Co. said it will buy 35% of Myanmar's Capital Life Insurance Ltd. Tokio Marine Holdings Inc. bought the Thai and Indonesian businesses of Sydney-based Insurance Australia Group Ltd. for about A$525 million ($355 million) last year, and has been open about its Southeast Asian ambitions.It makes sense that HSBC is eager to jump in: Its chairman, Mark Tucker, is an insurance supremo, having run AIA Group Ltd. and Prudential Plc previously. The recent protests in Hong Kong are pressuring the bank, which gets more than half of its pretax profit from the former British colony, to diversify, as other firms with big bases in the city have done. On Thursday, HSBC broke its silence and called for a peaceful resolution to the tensions in a newspaper ad.With the midpoint of the $3 billion to $4 billion price range amounting to 22 times Aviva's 2018 adjusted operating profit, these jewels aren’t coming cheap. That’s the same level at which AIA, Asia’s biggest insurer, trades. Bidders should prepare for a price war.To contact the author of this story: Nisha Gopalan at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.The world’s first 30-year bond featuring zero income struggled to find buyers, prompting Germany’s debt agency to admit the sale may have been “too large.”The nation failed to meet a 2-billion-euro target ($2.2 billion) for the auction of notes maturing in 2050, signaling that negative yields across Europe may finally be taking their toll on demand. It’s another sign that the global bond rally may be coming to a halt now that more than $16 trillion of securities have negative yields.“The broader conclusion is that this is an ominous sign for cash bonds,” said Antoine Bouvet, a rates strategist at ING Groep NV, looking ahead to the end of a summer lull in European issuance next month. The jury is still out on whether this is “a turning point in the long-end rates rally, as the fundamental driver of lack of faith in central banks’ ability to reflate the economy is still there.”Dwindling expectations for inflation and growth in coming years has led the European Central Bank to hint at a new wave of monetary stimulus next month, driving a rally across the region’s bond markets. The whole of Germany’s yield curve is now below zero -- among the first major markets exhibiting such a trait -- meaning the government is effectively being paid to borrow out to 30 years.That drew the attention of U.S. President Donald Trump, who used it to launch another push on Twitter for the Federal Reserve to lower U.S. borrowing costs. Markets are waiting for comments by Fed Chair Jerome Powell and other central bankers meeting from Friday to discuss stimulus for the global economy at a gathering in Jackson Hole, Wyoming.The German sale comes as Europe’s largest economy is priming the pumps for extra spending in the event of a crisis. While the nation is confined to strict laws on running a fiscal deficit, Finance Minister Olaf Scholz suggested Germany could muster 50 billion euros ($55 billion) should a recession hit. The economy contracted in the second quarter.The country only sold 824 million euros of the zero coupon bond at a record-low average yield of -0.11%, while the Bundesbank retained nearly two-thirds of the debt on offer. The real subscription rate -- a gauge of demand that accounts for retentions by the Bundesbank -- fell to 0.43 times against 0.86 times at the previous sale of similar maturity bonds on July 17.“This shows that there is less demand for 30-year bonds at negative yields,” said Marco Meijer, a senior fixed-income strategist at BNP Paribas SA. Still, Meijer doesn’t “see yields rising a lot in Europe.”Germany’s debt agency said it was aware that the auction with a zero coupon might fail to drum up large investor interest.“In the current environment it is difficult to issue in large volume a bond of this maturity,” said spokeswoman Alexandra Beust in Frankfurt. The agency “doesn’t view the sale as a failure -- it doesn’t cause us a problem as we can take the remainder on our own books.”Tantrum RiskGerman 30-year bonds erased declines after the comments, with yields steady at -0.15% after having risen three basis points earlier in the day. Those on 10-year securities also steadied at -0.69%, near a record low touched earlier this month.One of the triggers for a German bond selloff in 2015, after benchmark yields first neared 0%, was a poor 10-year auction that highlighted a loss of demand at low yield levels.This time around, Commerzbank AG had expected demand to come from life insurers and macro investors, despite the yield curve flattening in recent weeks to drive down long-dated yields. German 30-year bonds are still attractive for U.S. investors, when hedged for currency swings, offering around a 2.6% yield, relative to around 2% on a 30-year Treasury.“It is technically a failed auction,” said Jens Peter Sorensen, chief analyst at Danske Bank AS. “I am not all worried about this -- as investors can always just buy in the future and do not need to participate in auctions.”(Updates with German debt agency comments.)\--With assistance from James Hirai, Charlotte Ryan and Brian Parkin.To contact the reporter on this story: John Ainger in London at email@example.comTo contact the editors responsible for this story: Ven Ram at firstname.lastname@example.org, Neil ChatterjeeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Moody's Investors Service ("Moody's") has today assigned Baa1 long-term and Prime-2 short-term local and foreign currency issuer ratings to ING Bank Hipoteczny S.A. (ING BH) a mortgage bank which is a fully owned subsidiary of the fifth largest bank in Poland, ING Bank Slaski S.A. (Deposits A2 stable, Baseline Credit Assessment baa2). Concurrently, the rating agency has assigned to the mortgage bank A2(cr) long-term and Prime-1(cr) short-term Counterparty Risk Assessments (CR Assessment) and A2 long-term and Prime-1 short-term Counterparty Risk Ratings (CRRs).
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.At the heart of Chief Executive Officer Christian Sewing’s turnaround plan for Deutsche Bank AG is a contrarian bet: that he can cut spending on technology while gaining ground on the competition.Even with the digital revolution in finance accelerating, Deutsche Bank expects to trim its annual outlays on tech to 2.9 billion euros ($3.3 billion) in 2022 from a peak of 4.2 billion euros this year.“Deutsche Bank would probably love to be spending more on technology, but they need money for other parts of their restructuring,” said Pierre Drach, managing director of Independent Research in Frankfurt. “It’s pretty much impossible for European banks to catch up with the Americans at this stage.”Sewing’s team says it’s made progress in fixing information networks that his predecessor called “antiquated and inadequate.” Years of expansion left it with systems that couldn’t communicate with each other and didn’t adequately track its business. The bank, which has spent almost $18.5 billion on legal settlements and fines since 2008, has also suggested that the past breakdown in controls stemmed in part from weak systems.The 4.2 billion euros Deutsche Bank has budgeted this year to maintain and modernize its systems represents a fraction of the $11.5 billion JPMorgan Chase & Co. shells out. "You have to spend to win" with new technologies, Jamie Dimon, the bank’s CEO, said Tuesday.The gap is set to widen as the German chief executive wants to cut technology costs by almost a quarter. European banks, meanwhile, are forecast to increase tech spending at a 4.8% annual rate through 2022, according to the consulting firm Celent.“We continue to invest in IT to serve clients better, become safer, more efficient and better controlled,” Senthuran Shanmugasivam, a Deutsche Bank spokesman, said in response to questions from Bloomberg. “Despite our smaller footprint, our investment plans in 2019 are broadly unchanged as we reallocate resources to our core businesses.”It’s all part of a retrenchment Sewing announced last week to exit equities sales and trading and eliminate 18,000 jobs. Deutsche Bank aims to cut adjusted costs to 17 billion euros in 2022 from 22.8 billion euros last year; the share of technology expenses would remain stable over that time period.The company can modernize systems while spending less, for example by moving most of its applications to the cloud, according to Frank Kuhnke, who oversees its technology. He said Deutsche Bank has already cut the cost of crunching data by more than 30% since 2016 even as it increased computing capacity by about 12% a year to meet regulatory demands.Still, Deutsche Bank needs “to make a further step change in embracing technology,” Sewing told analysts last week.New HiresThe CEO has brought in new talent to do that. Bernd Leukert, who left the management board of software company SAP SE earlier this year, will start in September. Neal Pawar will join as chief information officer from AQR Capital Management the same month.Hiring outsiders hasn’t been a panacea in the past. Kim Hammonds, a former Boeing Co. executive, spent about four and a half years rebuilding the bank’s systems only to be ousted in 2018 after reportedly calling the bank “the most dysfunctional company” she’d ever worked for.Deutsche Bank expects its retrenchment from businesses to allow it to focus on its core operations. It will also save about 300 million euros by 2022 by shedding almost 5,000 external IT contractors and replacing them with internal staff at a lower cost. The integration of consumer lender Postbank will avoid duplication of expenses.The digital revolution is upending all aspects of finance -- from taking deposits to bond trading, a traditional Deutsche Bank strength. Citigroup Inc. has created a fintech division to invest in debt-market technologies while Spain’s Banco Bilbao Vizcaya Argentaria SA has created a unit to automate trade processes and generate intelligence from data. Dutch bank ING Groep NV has used artificial intelligence to win 20% more bond trades and cut costs.Cutting tech costs is also notoriously difficult.A three-year initiative announced in 2012 failed to stop technology spending from ballooning 44% by 2015. That was the year that then-CEO John Cryan said he would reduce the number of operating systems from 45 to four in 2020. Deutsche Bank still has 26, Sewing told investors in May. He kept the goal of eventually cutting them to four, but says the lender will need to run 10 to 15 systems for the foreseeable future.“Everyone knows that Deutsche Bank’s systems are a mess and I think they will have to end up spending more,” said Drach. “The fact that their new technology head hasn’t come on board yet gives them a good narrative for increasing the ultimate amount.”\--With assistance from Katie Linsell.To contact the reporter on this story: Nicholas Comfort in Frankfurt at email@example.comTo contact the editors responsible for this story: Dale Crofts at firstname.lastname@example.org, James Hertling, Giles TurnerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The market has been volatile in the last 6 months as the Federal Reserve continued its rate hikes and then abruptly reversed its stance and uncertainty looms over trade negotiations with China. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF […]
Rating Action: Moody's downgrades 18 Turkish banks; outlooks remain negative. Global Credit Research- 18 Jun 2019. London, 18 June 2019-- Moody's Investors Service has today downgraded 18 banks in Turkey....
Dutch lender ING Groep has decided against a tie-up with Germany's Commerzbank, German business daily Handelsblatt said in a pre-released report on Monday, citing financial sources. ING's management opted not to pursue the merger a month and a half ago, Handelsblatt reported, after Commerzbank chief executive Martin Zielke and ING boss Ralph Hamers met twice to discuss a potential deal.