The Rizal Commercial Banking Corp. (RCBC) sees that there may be investment opportunities to present itself towards the fourth quarter of 2020, both on the domestic and international markets.
RCBC senior executive vice president and treasurer Horacio E. Cebrero III said that the universal bank expects to see opportunities specifically in the fixed income space. Expected inflation trajectory influencing the movement of domestic rates in the long-end of the interest rate yield curve, coupled with supply driven issues, are continuously being monitored.
“There may be an increase in appetite for fixed income securities in the domestic markets as there will be opportunities opening up this second half of the year,” Cebrero said.
Although inflation will remain benign until the end of the year, inflation expectations for incoming periods are deemed as one of the catalysts in terms of the direction of interest rates.
Likewise, an increase in foreign investments could be undertaken this year relative to the first quarter of 2020 ifa window of opportunity presents itself.
The Yuchengco-led universal bank is also looking for good bets in the Philippine and United States (US) equities market to diversify its investment portfolio.
On the other side of the balance sheet, in terms of the bank’s funding exercise, RCBC will continue to tap the domestic investor market by issuing medium term bonds in line with its liability management strategy. Furthermore, it continues to monitor developments in the international markets to assess the right timing for tapping the US Dollar denominated bond market.
“The planned US dollar senior note that we were looking at for this year has been pushed back primarily due to the high liquidity level that the bank currently maintains, and partly due to the developments in the interest and credit markets as a consequence of the ongoing pandemic. However, if an opportunity presents itself, we will not hesitate to go back to the international bond market for pre-funding our requirements in the coming year,” he said.
RCBC successfully launched a P7-billion bond issue early this year which was more than twice oversubscribed from an anticipated issuance of P3 billion. As of this writing, the bank had just concluded the selling period of its second bond issuance for this year with a tenor of two years which ended up more than 5x oversubscribed with a size of P16.6 billion from the original announcement ofP3 billion.