Philippiness Market Insights 2016.12.16


News Highlights: Jollibee Foods (JFC) will sell all of its stake or 80.55% equity for $1.6mn in Chow Fun Holdings LLC. Meanwhile, ICT submitted an unsolicited proposal to the government, stating that it plans to build a common-user barge and roll-on roll-off (ro-ro) terminal in Cavite. DENR announced that it has cancelled the environmental compliance certificates of 6 companies, namely: Century Communities Corp., Austral-Asia Link Mining Corp., Ipilan Nickel Corp., Core Mining Corp., Lebach Mining Corp., and Donggwang Clark. Lastly, remittances sent by overseas Filipinos fell 3% at $2.1bn from $2.16bn a year ago amid the weakening of host countries against the US dollar and stiffer competition in the supply of seafarers.




Mart slumped in the aftermath of Fed hike, PSEi @6,855:
Local bourse joined the global retreat in equities after Fed announced a 25bps rate hike. PSEi lost 73 points to close at 6.855.31, with all sectors ending lower, led by property (-2.29%) and industrial (-1.21%). Among actively-traded shares were: BDO (-P2.50 at P111.40); PIZZA (+P0.84 at P12.10); & SMPH (P0.85 at P27.95), on P8.70bn turnover. Losers overwhelmed gainers at 117-66, with net foreign selling at P1.78bn.

Mart might trade slightly lower:
With the Fed’s hawkish tone on a probable three rate hikes for 2017, investors might stay on the sidelines and reassess their position. The lack of local catalysts as well, could propel the selling of local equities. Immediate support at 6,810, resistance 6,900.

Marts retreat on Fed rate hike:
Bourses across the region were mostly lower after Fed raised interest rate by 25bps. Despite the certainty of a December rate hike, investors are somewhat bothered over the next three projected rate hikes for 2017.

Shares close higher on the back of stronger dollar:
Stocks closed higher as the dollar rallied to its 14-year high. After the Fed raised its interest rates, the dollar index reached 103.12, its highest 2003.

Dow Jones (DJIA) gained 59 points at 19,852
inching closer to the 20,000 level.

Crude down on strengthening dollar: Oil prices fell further as the dollar reached its 14-year high. US Energy Information Administration (EIA) reported a decline in commercial crude inventories of 2.56mn barrels. West Texas Intermediate for January fell $0.14 to close at $50.90/barrel.


JFC to divest stake in US-based restaurant for $1.6m: Jollibee Foods (JFC) unit Jollibee Worldwide Pte will sell its entire stake or 80.55% equity for $1.6mn in Chow Fun Holdings LLC, the developer and owner of US-based restaurant chain Jinja Bar and Bistro. This is in line with JFC's plan to focus its resources on building larger businesses.

ICT to build $30mn Ro-Ro terminal in Cavite: International Container Terminal (ICT) submitted an unsolicited proposal to the government, stating that it plans to build a common-user barge and roll-on roll-off (roro) terminal in Cavite to be located within a 6ha. lot in Tanza, Cavite. The phase 1 is designed to support a total output of 115,000 20ft equivalent units per year, or equivalent to 140,000 fewer truck tips plying city roads yearly. This phase of the project is expected to cost $30mn upwards and is seen to start construction by 1Q17.

BSC's reported status of drilling of geothermal project: Basic Energy (BSC) reported that as of 5 December 2016, a casing (3-1/2") inch string has been successfully installed at a depth of 660m during the on-going drilling works being conducted in Mabini Geothermal Project located at San Teodoro, Mabini, Batangas. This project is a consortium between BSC and Phinma Energy (PHEN).

ALT changed par value at P0.25: Alterra Capital Partners (ALT) was given the approval by the SEC to change its par value of capital stock to P0.25/share from P0.05/share. In effect, total issued and outstanding shares will now be 62,276,060.

ALT entered into an Omnibus Loan and Security Agreement: Alterra Capital (ALT) has entered into a P400mn Omnibus Loan and Security Agreement with Altus Capital Corporation to be repaid within 30 months with interest rate at 15% per annum.


DENR cancelled ECCs of 6 companies: The Environment Department (DENR) announced that it has cancelled the environmental compliance certificates of 6 companies, namely: Century Communities Corp., Austral-Asia Link Mining Corp., Ipilan Nickel Corp., Core Mining Corp., Lebach Mining Corp., and Donggwang Clark. DENR also issued 'show cause' orders to 11 companies, which include mining, cement and manufacturing companies.

Remittance in October -3% at $2.1bn: Remittances sent by overseas Filipinos fell 3% at $2.1bn from $2.16bn a year ago amid the weakening of host countries against the US dollar and stiffer competition in the supply of seafarers. This figure brought the first 10 months remittances to $22.124bn (+4%) from $21.266bn a year ago.