Philipines Market Insights 2018.09.06


News Highlights: August inflation rose to 6.4% vs. July’s 5.7%, due to higher commodity prices while July’s unemployment stood at 5.4% vs. 5.6% in July 2017. Within the corporate loop, NAIA consortium underscored no gov’t guarantee on their airport proposal, while FGEN remains interested in PNOC’s banked gas.





Inflation spike spooked bourse, PSEi @7,752: PSA’s release of higher-than-expected inflation for August (+6.4% vs. July’s 5.7%) created selling pressure Thursday, pulling the PSEi 129 points lower at 7,752 (-1.64%). All sector gauges fell primed by financials (-2.8%) & property (-1.9%). ALI (-P0.80 at P43.40); BDO (-P6.60 at P123.30); SMPH (-P0.95 at P37.75); & AC (-P12 at P973) led decliners among actively-traded shares. Turnover was P5.86bn, with net foreign selling at over P1bn. Negative breadth prevailed, 146-51.
Cautious mood: Participants will heed for possible second-wind reaction to August inflation, given yesterday’s slump. The next page rests on local central bank authorities’ move to reign in on results, ahead of their next policy meeting this month. Meanwhile, some might seize on the latest weakness to position in stocks with commendable stories towards 4Q run-up. Trade a range. Immediate support is 7,700, resistance 7,780-7,800.


Marts dropped: Asian markets ended lower on Wednesday as concerns on emerging market economies added fuel to US’ trade rows with China and Canada.


US shares mixed, tech stocks lower: Sessions were mixed, as wider US trade deficit data for July might prod continuation of trade protection policies. Tech shares were down given congressional interrogation on Facebook & Twitter whether the latter is stifling free exchange of ideas. DJIA +22 points, 25,974 (+0.09%), Nasdaq Comp. -96pts, 7,995 (-1.2%).


Crude weakened: Oil settled lower, as a major storm in the Gulf of Mexico weakened considerably, easing supply disruption concerns. West Texas Intermediate (WTI) dropped $1.15 to $68.72/barrel.


TEL issues statement on reports of notice of strike:

PLDT Inc. (TEL) clarified to the Exchange there is no ‘industrial or labor dispute’ between the firm & Gabay ng Unyon sa Telekomunikasyon ng mga Superbisor (GUTS). TEL also said claims of termination of 12k workers is baseless, untrue & malicious.

PCOR bagged P4bn contract from DND:

Petron Corp. (PCOR) has been awarded by the Dept. of National Defense (DND) P4.416bn petroleum, oil & lubricant contract. Other proponents were disqualified due to failure to comply with requirements.

FGEN remains interested on banked gas of PNOC:

First Gen Corp. (FGEN) said they’re still waiting for PNOC to respond to their earlier offer for banked gas. PNOC earlier valued the contract at P11.9bn & has no word yet if any party submitted an offer.

ACR’s CP float to partly finance hydro project:

Alsons Consolidated Resources, Inc. (ACR)’s planned P1.5bn commercial paper (CP) float will partly finance its P4.25bn, 15MW run-of-river hydro plant in Saranggani. Commercial operation is targeted 2021. ACR also plans to pursue other similar projects in Negros Occidental, Davao Oriental, Zamboanga del Norte & Surigao del Sur, that could bring capacity to more than 145MW.

BCOR buys 1.59% equity in 7-Eleven Malaysia:

Berjaya Philippines Inc. (BCOR) acquired 7-Eleven Malaysia Holdings Bhd (SEM) covering 6.5mn shares bought at the open market of Bursa Malaysia Securities Bhd. 7-Eleven Malaysia has 2,100 stores in the country. Purchase cost was RM9.6mn, or P124.47mn. BCOR’s ownership translates to 1.59% equity interest.


Consumer prices spiked in August:

August inflation rose to 6.4% vs. July’s 5.7%, due to higher commodity prices. This brought 8-month average to 4.75%. Food & nonalcoholic beverages grew 8.5% for the month in review, transport costs +7.8%.

Employment data improves:

July’s unemployment stood at 5.4% vs. 5.6% in July 2017. This brought total employment to 40.7mn, or net generated employment of 488k. Gov’t. aims to provide 900k-1.1mn jobs for 2018.

NAIA Consortium clarified proposal:

Members of NAIA consortium said their P102bn airport proposal does not seek for any gov’t. guarantee. The group’s spokesperson, Jimbo Reverente, said terminal fees provision is included, but this should not be equated to gov’t. guarantee.









Philipines Market Insights 2018.8.31


Philipines Market Insights 2018.09.11