Philipines Market Insights 2018.09.20


News Highlights: BSP said the balance of payment (BoP) swung to $1.272bn surplus in August vs. $455mn deficit in July, after raising funds from the sale of yen bonds. Oil futures meanwhile, rallied on latest inventory weakness. Local corp. headlines were mostly mixed.





Selling prevailed, PSEi @7,221:Wednesday’s trade failed to hold on early gains, as profit-taking ensued with very little local catalysts at home. After moving to an intra-day high of 7,338, the PSEi finished 65 points lower at 7,221 (-0.9%), primed by mining/oil (-2.7%) & financials' (-1.6%) decline. BPI (-P2.60 at P79.50); MBT (-P1.10 at P64.90); AC (-P19 at P886); ALI (-P0.50 at P40); & SM (-P1 at P890) led actively-traded shares, while SMPH (+P0.45 at P36.95); & URC (+P1.10 at P144.10) defied the trend. Turnover was P5.3bn, with gainers-losers scoring 36-153. Net foreign selling stood at P637mn.
Gradual positioning: Players will heed the market’s response on August’s reversal to BoP surplus as well as US equities’ ascent, against some naysayers’ weak view on the market. Funds that were not accepted in the latest TDF auction might also find its way in equities, as others partake on an expected technical rebound. Index stocks battered by the latest sell-off might be highlighted, specifically holdings & property. Immediate support is 7,190-7,200, resistance 7,300.


Marts ended higher: Asian stocks rose Wednesday, as Japan’s bourse boosted from added gains for dollar-yen and bond yields, while Chinese stock markets largely shrugged off new tariffs.


US shares mixed: Banks rose after 10-year Treasury yields rose to a 4-month high, lifting DJIA +158 points at 26,405 (+0.6%). Tech shares fell even as Microsoft raised its quarterly dividend, pulling Nasdaq Comp. -6pts, 7,950 (-0.08%).


Crude gained: U.S. oil futures rose after EIA said inventories fell 2.1mn barrels for the week to Sept. 14 to 394.1 million barrels. West Texas Intermediate (WTI) rose $1.27 to $71.12/barrel.


SECB gets strong order for note issuance:

Security Bank Corp. (SECB) has issued US$300mn of 4.5% Senior Unsecured Fixed Rate Notes due Sept. 2023, from its total $1bn medium-term note plan. Book orders reached $800mn from 68 accounts. Proceeds will extend term liabilities, expand funding base, among others. The notes will be listed at the Singapore Exchange.

CLI progresses with landbank development:

Close to 70% of P2.15bn funds raised since its listing has been deployed by Cebu Landmasters, Inc. (CLI) to boost its landbank to 976,302sqm. Of the total, 43% are in dev’t. stage strategically located in 8 key cities in VisMin: Cebu, Mandate, CDO, Davao, Bacolod, Dumaguete, Iloilo & Bohol.

CLI launches Cebu project, Davao City upcoming:

Cebu Landmasters, Inc. (CLI) launched its P3.6bn Astra Centre mixed-use project in Mandaue City, Cebu. The site is on 1.2ha. lot in A.S. Fortuna St. that covers residential towers, office spaces, mall & Radisson RED. Phase 1 of the project will be completed 4Q 2021. CLI will soon introduce another mixed-use project in Davao City.

High Tribunal ruled in favor of oil firms:

Supreme Court (SC) denied BIR’s petition to compel Pilipinas Shell Petroleum Corp. (SHLPH) & Petron Corp. (PCOR) to pay their delinquent tax liabilities via tax credit certificates (TCCs). BIR claims more than P3bn from SHLPH & PCOR for the alleged unpaid excise tax.

CLC sets P49bn for airport dev’t:

Chelsea Logistics Holdings Corp. (CLC) & Mega7 Construction committed P49bn & P12bn investment for their unsolicited proposal to develop airports in Davao & Kalibo, respectively. Details are being deliberated.

EDC will voluntarily delist in the Exchange on 29 Nov:

Energy Development Corp. (EDC)’s tender offer price for up to 2.04mn remaining common shares is at P7.25 apiece.

ABS temporarily shuts online stores:

ABS-CBN Corp. (ABS) has temporarily taken down ABS-CBN Store & UAAP Store websites due to data breach for online shopping. The incident does not affect however, other ABS digital properties.

DFNN forms JV with Singaporean IT firm:

DFNN, Inc. (DFNN) signed a JV with CYG Pte Ltd. in Singapore. CYG is a software & tech firm with R&D based in Taiwan. The move would optimise DFNN’s tech platform offerings.

ISM clears sale of treasury shares at P1.45 apiece:

ISM Communications Corp. (ISM) shareholders have approved the subscription of Action Common Dev’t. Fund SPC of ISM’s 841.945mn treasury shares at P1.45 apiece. Total consideration is P1.22bn, 25% payable upon purchase, 75% balance no later than end-2018.

MAH prepares rights offer:

Metro Alliance Holdings & Equities Corp. (MAH)’s board approved the plan to call on shareholders to subscribe to the remaining P894mn unissued capital of the firm. The ratio was set at 2.91 shares per share held at P1/share. Proceeds will be used for working capital needs.

PA transforms to a holding concern, authorised capital to be raised to P5bn:

Pacifica, Inc. (PA)’s board approved the change in its primary purpose to reflect a holding concern after revising its name to Pacifica Holdings, Inc. PA will change its par value from P0.005/ to P1/share, without resulting to a change in authorised capital, then raise the amount from P200mn to P5bn.

Tiger owner wants PSE to intervene in ABG backdoor move:

Okada sought for PSE’s intervention in Tiger Resort’ Asias takeover via Asiabest Group International Inc. (ABG). Okada’s legal team said the public must be informed of the ownership issue with Tiger Asia due to corruption-related charges. Okada owns 68% of Univ. Entertainment (UEC) which owns 99.99% of Tiger Asia.

Firm temporarily shelves listing plan:

Cal-Comp Tech. deferred its P6.77bn IPO due to current market conditions. No official new timeline was set. The firm intended to float 378mn shares at P17 apiece.


BoP surplus in August:

BSP said the balance of payment (BoP) swung to $1.272bn surplus in August vs. $455mn deficit in July, after raising funds from the sale of yen bonds. In recap, BTr raised $1.39bn from the sale of Samurai bonds last month. Jan-Aug. BoP deficit stood at $2.44bn (+75%).

Unperturbed outlook from foreign investment bankers:

London-based Barclays & SMBC Nikko Securities of Japan believe foreign investors remain bullish on the Philippine’s growth prospects. Barclays affirmed its 6.5% growth outlook for 2018, underscoring officials such as BSP, remain in control of the inflation situation.









Philipines Market Insights 2018.09.18


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