Philipines Market Insights 2018.10.2


News Highlights: Wall Street rallied after US & Canada clinched a last-minute deal to save NAFTA even as crude futures jumped above $75/barrel on tight supply concerns. At home, AC unit, HI & IPO merge their education venture for P15.5bn while ICT started its Puerto Cortes expanded terminal. MVP also expressed hisintent to venture into agri.





Bourse weakened, PSEi @7,222: Selling pressure prevailed, pulling the PSEi 54 points lower at 7,222 (-0.75%), as participants opted to wait for September’s inflation this week. Industrials (-1.6%) & holdings (-1.4%) led the decline, while services (+0.5%) bucked the trend. SMPH (-P0.50 at P35.65); SM (-P24 at P880); & URC (-P5 at P139.50) were among those that led actively-traded shares lower. Gainers-losers reached 75-101, although turnover was thin at P3.97bn. Net foreign selling reached P677mn.
Catalyst for advance: Sentiment might glide with the region following Wall Street’s lead, in light of the NAFTA accord headline. This catalyst could inspire fund managers to troop back into equities anew, as trade risk prospects abate in view of world leaders’ pro-active stance to resolve their spats. Large caps in property, financials & holdings might be favoured, specifically shares that were badly bruised by the rout. Immediate support is 7,200, resistance 7,300-7,350.


Marts mixed: Asian stock markets were mixed on Monday following the end of U.S. market’s best quarter in almost five years while worries on global trade tension lingers on.


NAFTA pact aided DJIA higher: Trade-related shares rose, after US & Canada clinched a last-minute deal to save NAFTA, raising hopes for progress of talks with other countries. DJIA +192 points, 26,651 (+0.73%), Nasdaq Comp. -9pts, 8,037 (-0.11%).


Crude rose: U.S. crude prices surged on Monday, as sanctions on Iran are shrinking its crude supplies and progress North American trade deal lessened concerns on demand. West Texas Intermediate (WTI) climbed $2.05 to $75.30/barrel.


URC buys out block for HURC:

Universal Robina Corp. (URC) bought ConAgra Grocer Product Company, LLC’s 50% in Hunt-URC (HURC) for P3.18mn. The transaction covered 1.4mn shares at P2.27/share. URC will continue to produce & sell Swiss Miss under a trademark license accord.

BDO takes in partner for rural unit:

BDO Unibank, Inc. (BDO) approved its accord with Osmanthus Investment Holdings (Singapore), for the latter’s 15% stake in rural bank subsidiary, One Network Bank. Osmanthus will help ONB develop the framework for MSME lending, specifically microfinance. The transaction is subject to regulatory approvals.

MWC prepares staggered rate rebasing:

Manila Water Company, Inc. (MWC) said MWSS approved the firm’s rebasing agreement for 2018-2022. MWC will stagger the implementation of the rate hike over the 5-year stretch. No other data was given.

AC unit, HI & IPO merge education venture for P15.5bn:

House of Investments, Inc. (HI) will merge iPeople (IPO) with AC’s AC Education, Inc. (AEI), with IPO as surviving entity. The transaction is valued at P15.5bn for the combined entity, with 51.3% owned by HI, AC at 33.5%. A special meeting will be called for approval of the MoA between AC, IPO & AEI. HI & IPO sought for voluntary trading suspension from 01 Oct. & will be lifted 9am of 02 Oct. 2018.

AC unit to distribute Maxus vehicles:

SAIC MAXUS Automotive Ltd. appointed Ayala Corp. (AC)’s fully-owned AC Industrial Technology Holdings, as official distributor of Maxus vehicles in the Phils. Maxus has grown its sales to 70,000 vehicles in 2017 & will be the 5th vehicle brand under AC Motors (AC Industrials’ auto & distribution group) aside from Volkswagen & KTM brands.

Aboitiz Construction forms int’l unit for projects:

Aboitiz Construction (ACI) will set up an overseas unit to expand its reach. ACI has been in talks with engineering, procurement & construction firms in China & received requests for quotes from Japan firms.

ICT starts Puerto Cortes expanded terminal:

International Container Terminal Services, Inc. (ICT)’s Operadora Portuaria Centroamericana S.A. de C.V. (OPC) started operations of Pier 6 that was inaugurated by Honduran Pres. Juan Orlando Hernandez. The $145mn project is the initial phase of OPC’s expansion in Puerto Cortes. The cranes raised operational capacity by 50% to 1.4mn TEUs.

MWIDE ventures into P2bn share buyback:

Megawide Construction Corp. (MWIDE) approved a share buyback of up to P2bn over a period of 2 years. No other details were given.

SLI opens credit line, JV project with AFP Retirement:

Sta. Lucia Land, Inc. (SLI)’s board approved last 28 Sept. 2018, the set-up of Sta. Lucia Foundation, & opening of accounts with CHIB. SLI also approved opening P500mn credit line each to SECB & BPI, & activating its dormant account with AUB. SLI will also enter a JV with the Armed Forces of the Phils. Retirement for a 3,484sqm. project in Iloilo City.

PTT asked to pay P500mn SRF to NTC:

NTC wants Philippine Telegraph and Telephone Corp. (PTT) to pay P500mn of unpaid regulatory fees as of 2017, covering supervision & regulatory enforcement (SRF) charges of P330mn (2002-2015) & P114mn (2016-17). The SRF was based on PTT’s paid-up capital of P10.76bn. PTT contested that the amount computed was based on erroneous paid-up capital of the firm.

NOW pays affiliates collateral interest:

Now Corp. (NOW)’s board approved the payment of 3% per annum of the total amount granted by affiliates Velarde, Inc. & Gamboa Holdings, Inc., until the loan being secured by NOW has been fully-paid to local banks. The affiliates provided collateral for said loan in the form of property & shares of stock.


NEDA chief expresses optimism on growth prospects:

Despite the downgrade of economic growth outlook from ADB & Fitch Solutions, NEDA Dir.-Gen. & Economic Planning chief Pernia remained confident on the Philippine’s prospects, stating enough macro fundamentals are in place to weather external risks.

MVP eyes agriculture:

Manuel V. Pangilinan (MVP) is looking at investing in agri to address soaring commodity prices. MVP said they’re eyeing palay, corn, sugar & looking at these items ‘very seriously’. MVP also sits as vice-chair of Roxas Holdings.









Philipines Market Insights 2018.09.27


Philipines Market Insights 2018.10.4