Dear Valued Clients,

As you may have heard, Republican Donald Trump will be the next President of the United States.

What has been happening to the financial markets?
· Most investors were expecting a Clinton win and markets were priced as such
· The unexpected result has caused an initial knee-jerk reaction in many major markets
· US stock futures first dropped as much as 800 points as investors sold in a panic
· Our own PSEi dropped 2.58% to 7,119.04 yesterday.
· However, once investors calmed down in the US markets, the stock market reversed and the Dow Jones actually ended up 1.4%
· Yield on the 10 Year US Treasury rose 20 bps to 2.06% on concerns that Trump’s fiscal policy can be inflationary as US borrowings will grow to fund Infrastructure projects.

Over the next few weeks, markets will be watching how Trump forms his government.
· Throughout his campaign, Trump has communicated a more protectionist policy.
· The Federal Reserve will also be closely watched. Markets were previously expecting a December rate hike but the chances of this have already gone down.

As always, we ask investors to primarily look at the long-term fundamentals of the Philippines.
· GDP, inflation, and investments will continue to be positive for many years to come but external issues remain the focus.
· Nevertheless, in the short-term, we may see volatility due to all the uncertainty. However, we are already seeing the markets calm down. Investors may use this opportunity to enter at lower levels

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