Philipines Market Insights 2018.12.4


News Highlights: Wall Street rallied (DJIA +287 points, Nasdaq Comp. +110pts), favored by receding US-China trade tension. Locally, Nikkei PMI improved, while regulators called for a rollback in jeepney fares. At the corporate front, AEV’s Apo Agua Infrastructura signed P9bn loan for water treatment project in Davao City with an integrated hydro plant.





Bourse finished green, PSEi @7,532: Optimists lifted the bourse above the 7,500 zone, as US-China agreed to suspend new tariffs for 90 days from Jan. 2019. The PSEi finished 165 points up at 7,532 (+2.24%), with all sectors green led by property (+2.9%) & holdings (+2.8%). Among key index movers were: SM (+P39.50 at P948); SMPH (+P1.80 at P36.50); & JGS (+P2.20 at P50.40), while lead gainers included RLC (P1.30 at P21.75); DMC (+P0.66 at P13); & MEG (+P0.24 at P4.75). Turnover zoomed to P9.25bn, with gainers-losers at 115-73. Net foreign selling reached P123mn (-82%).
Momentum continuation: Local equities might resume its climb, mainly on Wall Street’s optimism (DJIA +287, Nasdaq Comp. +110 points), improving factory production data & jeepney fare rollback at home. Hints from White House economic adviser Kudlow that an agreement to resolve intellectual property (IP) theft might also boost expectations in resolving the US-China trade row. Large caps are seen to take lead & select follow-through buying in second-tiers. Trade a range. Immediate support is 7,500, resistance 7,600-7,650.


Marts gained: Asian stock markets jumped on Monday as US Pres. Trump and Chinese Pres. Xi Jinping agreed for a temporary halt in trade tariffs.


US equities barrelled higher: Wall Street lauded the trade war truce between US-China, pushing gauges to higher territory. DJIA +287 points, 25,826 (+1.13%), Nasdaq Comp. +110pts, 7,441 (+1.51%). Even after Qatar announced plans to leave OPEC group, Nymex crude rose $2.15 at $53.08/barrel (+4.2%), after Saudi Arabia & Russia extended their pact to manage the market.


Crude up: Oil prices rose as OPEC is seen to reduce supply. West Texas Intermediate (WTI) gained $2.02 to $52.95/barrel in Nymex.


PCOR made export shipments:

Petron Corp. (PCOR) made a Nov. cargo diesel shipment to Unipec, the trading arm of China’s state-owned Sinopec. Unnamed sources also said another was made for 17-19 Dec. from Bataan, but it was not clear if this tender has been awarded. No official comment has been given by PCOR, who is used to be a net importer of diesel.

AEV unit signs P9bn loan for Davao water treatment plant:

Aboitiz Equity Ventures, Inc. (AEV)’s Apo Agua Infrastructura, Inc. signed a P9bn loan
agreement with a group of banks for the development, engineering, O&M of the 347MLD water treatment in Davao City & an integrated 2.5MW hydro plant. Lead arranger is BPI Capital.

UBP raised bond float to P11bn:

Union Bank of the Philippines, Inc. (UBP) raised its final bond float from P10.5bn to P11bn due to additional demand from retail investors. The original size was at P5bn.

DMW unit ups authorised capital:

D.M. Wenceslao & Associates, Incorporated (DMW)’s board approved the increase in authorised capital for fully-owned Aseana Holdings, Inc. from P1.5bn, to P4bn. No other details were given.

CIC unit bought into service & repair start-up firm:

Concepcion Industrial Corp. (CIC)’s fully-owned Cortex Technologies Corp., bought majority of Teko.Ph, an after-sales technology startup firm. Keko uses a proprietary platform for real-time access to service & repairs for air conditioners, refrigerators, washing machines & water heaters using self-employed & qualified entrepreneur technicians.

HLCM to raise cement capacity by 30%, dissolves unit:

Holcim Philippines, Inc. (HLCM) will boost cement capacity by 30% to 13mn MT by 2020 with an investment of almost $300mn. Focus will be on Bulacan & Misamis Oriental plants through the installation of new & efficient kilns, mills & waste heat recovery system. Meanwhile, HLCM’s board approved the dissolution of fullyowned unit, Excel Concrete Logistics, Inc. No other data was provided.

MARC plans capital increase:

Marcventures Holdings, Inc. (MARC) will have shareholders approve the planned increased in authorised capital from P4bn to up to P7bn, that would include the creation of a class of up to 100mn non-voting, redeemable preferred shares at P10/share par value, or P1bn. The firm also plans to issue warrants.


Nov. PMI advanced:

Manufacturing improved in Nov. after Nikkey Phils. Manufacturing Purchasing Managers’ Index (PMI) rose to 54.2 from October’s 54. Reading above 50 indicate expansion.

Jeepney fare rollback in place:

LTFRB approved a provisional rollback of public utility jeepney (PUJ) fares in Metro Manila from P10 to P9 for the first 4 km. The new base fare will be effective after publication. The move was prompted by the decline in fuel prices.









Philipines Market Insights 2018.11.27


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