EastWest Banking Corp., the 13th largest commercial bank in the Philippines in terms of asset size, intends to raise P15 billion by selling peso-denominated long-term negotiable certificates of deposit (LTNCD). The bank said that the issuance will be for diversifying its funding sources for liability management.
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To give you a little background, LTNCD is basically a security that offers higher interest rate compared to that of a regular savings account and government bonds. It is also quite similar to regular time deposits except it offers higher interest rates. While the former can be terminated before its maturity, the latter does not allow so.
It is considered a safe investment and is regulated by the Bangko Sentral ng Pilipinas (BSP). LTNCDs are insured by the Philippine Deposit Insurance Corporation (PDIC) up to P500, 000.00 and interest earned from it is tax-free. Since the security is negotiable, it can be traded in the secondary market before maturity date.
The offering to be made by the bank is still due for regulatory approval by the BSP that’s why no terms of the offering were yet disclosed.
Looking at the chart below, the stock is bearish for the short, mid and long term. The stock has broken all near term support levels that has previously protected the stock from falling. All indicators and parameters are denoting a bearish undertone as of the moment and it would be good to avoid the stock temporarily if you are a quick and position trader. As of this point, we currently don’t have any buy signal for the stock. Should the breakdown continue, the stock could fall to as low as 27 for the short term.