Philipines Market Insights 2018.09.25


News Highlights: Crude spiked, pulling DJIA to negative terrain. At home, fiscal deficit widened 60% for the first 8 months.





Bourse advances on follow-through buying, PSEi @7,433: Sessions started the week on positive footing, largely on follow-through buying. After moving within 7,362-7,434, the PSEi scored 50 points up at 7,433 (+0.7%) on market-on-close (MOC) boost. Financials (+1.9%) & mining/oil (+1.8%) led the rise, while property retreated (-0.53%). Among actively-traded shares: AEV (+P3.50 at P50.40); BPI (+P4.30 at P88.20); & BDO (+P0.40 at P121) gained, while ALI (-P0.85 at P40.90); MRC (-P0.03 at P0.73); & ICT (-P0.05 at P92.90) slipped. Turnover was light at P3.92bn with gainers-losers at 95-97. Net foreign selling was P563mn.
Frail stance: Sentiment might glide with Wall Street’s retreat & crude futures’ rally above $72/barrel, including reports of wider fiscal gap in August. Others might also anticipate sequel policy stance from the Fed & the local central bank, with attention fixated on the peso’s volatile trend. Immediate support is 7,370-7,400, resistance 7,450.


Mixed trade: Regional bourses were mixed Monday as trade tension returned to kick-off the week which was also dulled by the closure of some markets for holidays.


US equities mixed: Shares fell on renewed trade tensions, while oil prices jumped since OPEC ignored the US’ call to boost supply. DJIA -181 points, 26,562 (-0.7%), Nasdaq Comp. was up 6 notches at 7,993 (+0.08%).


Oil surged: Oil prices jumped to its highest in nearly 4 years, as OPEC declined to commit to increase in supply. US sanctions vs Iran will take effect on 04 Nov. West Texas Intermediate (WTI) climbed $1.30 to $72.08/barrel.


EDC prepares for new geothermal asset auctions:

Energy Development Corp. (EDC) will participate in the auctions for geothermal concessions in Chile & Peru in 2Q19. The potential capacity in Chile is 150MW. Meanwhile, what was awarded to EDC in Indonesia is PSPE rights, a term for prelim. geothermal survey & exploration assignment, equivalent to a renewable energy service contract in the Phils. If all goes well, drilling would take 18-24 months.

ECP gears up for preferred share issuance:

EasyCall Communications Philippines, Inc. (ECP)’s board will issue 150mn preferred shares at P0.01/share par value at an issue price of P0.01/share. The preferred shares will be voting, dividend equal to PDSTR-2 for 10-years, repricing every 10 years, non-participating, non-cumulative & redeemable. The preferred shares shall be offered at 1:1 ratio to common holders on ex-date 02 Oct., offer run 8-12 Oct. 2018. Said shares will not be listed in the Exchange.

PBC will tap on PGOLD network:

Philippine Bank of Communications (PBC) chief Lucio Co, is looking at PGOLD’s branch network for growth & expansion. PGOLD has 1mn members & over 300 Puregold Price Club, Inc. (PGOLD) & S&R branches. PBC operates 89 branches to date.

LSC expands charter fleet tie-up:

Lorenzo Shipping Corp. (LSC) entered a 3-year Charter Agreement with NMC Container Lines (NMCCLI) that would augment LSC’s fleet of 5 container ships by 4 more owned by NMCCLI. The accord will take effect 01 Oct. 2018 & will allow LSC to expand its customer base without need for excessive capital investment.


Wider fiscal gap:

BTr said fiscal deficit was recorded in August at P2.6bn, versing Aug. 2017’s P28.8bn surplus. This brought 8-month deficit to P282bn (+60%).

Senate approves PERPI for energy sector:

Members of the Senate approved on 3rd & final reading SB1574, or the Phil. Energy Research & Policy Institute (PERPI) Act of 2018. PERPI will conduct multidisciplinary energy research technology & will partner with gov’t. for energy policy-making process. Meanwhile, the counter measure is still pending in Congress.









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