Philipines Market Insights 2018.11.6


News Highlights: October manufacturing gauge improved to 54 from September’s 52, while index heavyweights TEL & MER led headlines: TEL aims for Clark as 5G City; ‘Flattish up’ rate hinted by MER official.





Bourse advances, PSEi @7,213: Monday’s opening trade was generally upbeat, buoyed mainly by Wall Street’s strength plus upcoming leads at the local front & overseas. The PSEi closed 73 points up at 7,213 (+1.02%), with all sectors green led by services (+1.63%) & mining/oil (+1.23%). Gainers among actively-traded shares were: ALI (+P0.35 at P40); JFC (+P4 at P280); AC (+P15 at P935); SM (+P10 at P910); & MBT (+P1.05 at P66.60). Turnover was P7.24bn, with gainers-losers at 100-93. Net foreign selling was P5.76bn, but excluding EDC buyback cross, net foreign buying was P162mn.
Follow-through buying: Sessions may continue to advance, largely on large-cap index stocks, on expectations of improved 3Q results. Part of the boost may stem from improved factory production gauge in Oct., as well as industry advisory on bidding results for telco, Clark int’l. airport O&M, among others. Continue to trade a range. Immediate support is 7,200, resistance 7,300-7,350.


Mostly dropped: Asian stock markets fell Monday following White House adviser Kudlow downplayed Trump’s tweet of a “positive talk” with Chinese pres. Xi Jinping last week as no massive movement currently to deal with the trade.


US equities mixed: ISM non-manufacturing index turned out better-than-expected at 60.3 for October, lifting DJIA 190 points up at 25,461 (+0.76%). Nasdaq Comp. slipped 28pts, 7,328 (-0.38%) as tech shares corrected.


Crude failed to recover: Oil continued its plummet despite sanctions on Iranian oil, as waivers allowed some countries to continue importing oil from Iran. West Texas Intermediate (WTI) slid $0.25 to $62.89/barrel.


TEL aims for Clark as 5G City:

TEL, Smart & Ericsson signed MoU with Clark Dev’t. Corp. (CDC) to turn the freeport zone into the first Smart 5G City. Launching of the service will be within the month. 13 sites are now 5G-ready & the target is to raise this to 25 by mid-2019.

‘Flattish up’ rate hinted by MER official:

MER VP Fernandez said this month’s charges will be ‘flattish up’ given 2 reductions in the past billing months. He said higher Malampaya gas prices may still be offset by improved value of the local currency against the dollar. Also, higher WESM due to transmission congestion may be balanced by higher capacity availability.

MFC to book gain from reinsurance, plans buyback of shares:

MFC will release over C$1bn in capital with the reinsurance of its legacy businesses, including mortality & lapse risk on part of its Canadian universal life policies. The parties include Jackson National Life Insurance, RGA Reinsurance. The move would allow MFC to book C$175mn in after-tax gain for 2018. Also, MFC will acquire up to 40mn of its common shares, subject to regulatory approval, aside from raising its common shares dividend by 14%.

P10bn bond float eyed by VLL:

VLL prepares to float P10bn fixed-retail bonds, with base size of up to P5bn plus P5bn oversubscription option. CHIB Capital will be issue manager for the issuance. Share buyback was also extended to 05 Nov. 2020 for total of 3bn shares.

Romero camp settled spat in MNHPI:

SEC noted the settlement of dispute between the Romero’s ownership dispute & upheld the Oct. 2016 decision dismissing the case filed by Reghis Romero-led Harbour Centre Port Terminal against Michael Romero-led Harbour Port Centre Holdings & PCOR. PCOR has 35% in Manila North Harbour Port, Inc. (MNHPI) after the firm raised its capital stock. In 2017 however, PCOR sold its block to ICT, which raised its block to 50%. MNHPI has the 25-year contract to operate the 53ha. Manila North Habor terminal.

Ex-date 07 Nov. 2018:

ALCPB P1.76145, payable 06 Dec.


Oct. factory gauge improved:

Nikkei Phils. Manufacturing Purchasing Managers’ Index (PMI) was up to 54 in Oct. from Sept.’s 52. Readings above 50 indicate improved business conditions covering new factory orders & employment.

China conglomerate will invest a casino in CEZA:

Shanghai Jucheng Supply Management is set to invest $100mn for an integrated resort with casino in Cagayan Ecozone (CEZA). The MoU was signed last week. Jucheng covers bulk commodity trade, customs clearance, quarantine inspection, manufacturing, logistics, among others. Under RA7922, CEZA is allowed to grant a license to a casino.









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