Philipines Market Insights 2018.10.23


News Highlights: PH 9M18 fiscal deficit grew 78%. At the corporate loop, holding firms led headlines: AC Infra plans P1bn investment for logistics JV; FDC unit enters RE tie-up for solar rooftop; COSCO unloaded Liquigaz.





Bourse advances, PSEi @7,236: After moving within 7,125-7,251, optimists carried local equities to higher ground, pushing the PSEi 84 points up at 7,236 (+1.2%). Financials (+1.7%) & holdings (+1.5%) led the ascent. Among actively-traded shares: SMPH (+P0.40 at P34.90); ALI (+P0.25 at P41.15); MBT (+P2.95 at P69) gained, while SEVN (-P2.10 at P109.80); URC (-P0.20 at P145.70); & AP (-P0.45 at P34.70) fell. Turnover remained light at P4.3bn, with gainers-losers at 107-83. Net foreign selling narrowed to P83mn (-62%).
Tight trades: Sessions might go through another limited trading zone, as players heed for 9M earnings guidance from index-based shares. Attention might still be on second-tier & speculative plays, specifically those that are set to unlock good headlines for the remainder this year. Technical breathers might soon be ripe, anchored on wider fiscal gap in 9M18. Balance portfolios by including large caps that have retraced to cheap levels. Immediate support is 7,200, resistance 7,270-7,280.


Marts mostly gained: Most Asian stock markets ended Monday in the green led by Chinese stocks following a proposed personal income tax cuts and reassuring comments from leaders and top regulators.


US shares mixed: DJIA lost 126 points at 25,317 (-0.5%), after financial shares weakened, despite hopes for economic stimulus in China & easing tensions on Italy’s debt. Meanwhile, Nasdaq Comp. was up 19 points at 7,468 (+0.26%).


Crude stepped back: Saudi Arabian concerns continued to pressure sentiment, as oil prices were unable to maintain prior session’s gains. West Texas Intermediate (WTI) shed $0.08 to $69.17/barrel.


AC Infra plans P1bn investment for logistics JV:

Ayala Corporation (AC)'s Infrastructure Holdings launched its 60-40 JV firm, Entrego Fulfillment Solutions, with Brillant 1257 GmbH & Co. Virtue Verwaltungs Kg as partner. The investment is P1bn until 2019. Entrego started as logistics unit of Zalora before its transformation to a JV firm. From 45 distribution hubs, Entrego aims to raise this to 60 by 2019.

FDC unit enters RE tie-up for solar rooftop:

Filinvest Development Corporation (FDC)’s FDC Utilities signed a JV with ENGIE Services (Phils.) for Filinvest-ENGIE Renewable Energy Enterprise (FREE). The JV aims to develop solar energy rooftop for customers. The earlier partnership with ENGIE was the dev’t. of district cooling system in Northgate Cyberzone.

COSCO unloaded Liquigaz:

Cosco Capital Inc. (COSCO) sold last 19 Oct., its shares in Liquigaz & Calor Phils. Holdings to Fernwood Holdings. No exact value was mentioned, but hinted it as less than 12% of COSCO’s P112bn asset.

PAL ferry unit services Boracay route:

PAL Holdings, Inc. (PAL) aims to start its ferry service for Kalibo & Boracay by the last week of October. This will be done via PAL subsidiary, Mabuhay Maritime Express Transport that was set up in Aug. 2016 through new 42-meter catamarans.

IRC to start subway project groundbreaking:

IRC Properties, Inc. (IRC) intends to have its ceremonial ground breaking for the $3.7bn Makati Intra-City Subway project this Nov. or Dec. The project has already been subjected to Swiss challenge & no proposal was submitted. Capacity estimate is 700k passengers daily, with local banks offering to provide financing.


Fiscal gap widened in 9M18:

BTr said 9M fiscal deficit grew to P378bn (+78%), covering 72% of this year’s P524bn deficit ceiling target. September’s budget gap stood at P96bn (+161%).

Energy chief challenges PCOR to offer cheaper diesel straight to consumers:

Energy Sec. Cusi said PCOR should offer low-priced fuel directly to the public, given the latter’s offer to import 50k MT diesel that would be P5/liter cheaper vs. pump prices. No official comment has been given by PCOR on the matter.

PNOC JV partner invite officially out:

PNOC formally invited bidders to become its JV partner for the proposed liquefied natural gas (LNG) in Batangas. Deadline for submission of eligibility is 21 Dec., pre-bidding on 16 Nov.

Solon supports retention of policies for oil & gas exploration:

Sen. Committee on Energy chair Gatchalian said he would push for the retention of privileges granted to oil & gas contractors under TRABAHO bill. The House version of the bill did not repeal perks under Pres. Decree (PD) 87, promoting discovery & dev’t. of petroleum resources, & the Senate has yet to come up with its version.









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