Philipines Market Insights 2018.5.16


News Highlights: Concerns over quickening inflation supported by higher treasury yields pulled U.S. shares down (DJIA -193pts, Nasdaq -59pts) while regional marts mostly enjoyed overnight strength from Wall Street. At the local front, property firms led headlines: CLI leads VisMin space; CPG sees P13bn presales from Batulao Artscapes; ALI signs MoU for Quezon property; FLI prepares for project launches in 2018. Meanwhile, BSP data showed remittances for March fell 9.8% at $2.36bn.





PSEi landed on plus zone at 7,885. Local equities started the 4-day trading week in green, taking its strength from Wall Street’s overnight ascent & 1Q18 earnings lead at home. Property shares were upbeat (+4.8%), as players saw these as good inflation hedge. The PSEi finished 133 points stronger at 7,885 (+1.7%) & touched an intra-day high of 7,906. SMPH (+P2.65 at P38.30); ALI (+P1.25 at P42.25); SM (+P19 at P937); & BDO (+P0.90 at P133.90) led actively-traded gainers. Turnover improved to P7.87bn, with advances-declines at 110-91.

Mixed session. Some players might seize on the mart’s recent strength to take profits, possibly taking their cue from the renewed increase in US Treasury yields. However, declines might be limited by gradual positioning from other investors. Sessions could stay mixed, as equities participants weigh on 1Q18 results. Immediate support is 7,820, resistance 7,950.


Mostly advanced. Regional marts mostly ended higher Tuesday primed by overnight strength from Wall Street, although tech-heavy indexes fell as tech shares struggled.


US equities down. Higher 10-year Treasury yields & April’s retail sales (+0.4%) aided expectations of quickening inflation & weighed on US shares. DJIA -193 points, 24,706 (-0.8%), Nasdaq Comp. -59pts, 7,351 (-0.8%).


Oil settles lower. Oil prices pulled back Tuesday after API reported an unexpected buildup of U.S. crude stockpiles last week, supported by concerns that sanctions on Iran are likely to restrict crude exports from the Middle East. West Texas Intermediate (WTI) slid $0.39 to $70.92/barrel.


CLI leads VisMin mart:

Santos Frank Knight (SFK) ranked Cebu Landmasters, Inc. (CLI) as the leading housing developer in Vis-Min, covering major cities of Cebu, Davao & CDO. SFK accounted for 18% share in house & lot segment & 12% in condo market in Cebu. In Davao, CLI booked 98% absorption rate given its highest take up of 57 units per month & 24% in CDO market. CLI aims to mark its presence in Gen. Santos City, Butuan, Ormoc & Roxas City with the launch of 20 more projects across VisMin.

CPG sees P13bn presales from Batulao Artscapes:

Century Properties Group, Inc. (CPG) leisure, tourism & hospitality unit, sees P13bn presales proceeds with the 2nd phase of Batulao Artscapes in Nasugbu, Batangas. A total of 1,700 residential units will be offered on the 142ha. artventure community. This will comprise 4 villages - Cluster, Commune, Collection & Curated. of 306 homes offered, CPG has pressed 74% for P1.2bn sales value within 6 months of launch.

ALI signs MoU for Quezon property:

Ayala Land, Inc. (ALI) signed MoU with Green Square Properties Corp. (GSPC) & Green Circle Prop. & Resources (GCPRI) last 11 May 2018, for the formation of a JV firm that will own & develop 27,852ha. of lot in Dingalan, Aurora & Gen. Nakar, Quezon. ALI will own 51% of the JV.

FLI prepares project launches:

Filinvest Land, Inc. (FLI) intends to launch P16bn residential projects in 2018 & allotted P23bn in capex. Of the total capex, 41% will be for office dev’t., 34% residential, 11% retail mills, the balance for land banking.

PCOR plans refinery expansion:

Petron Corp. (PCOR) is talking to contractors for its refinery expansion & petrochem project in Bataan. This refers to the firm’s continuous catalytic reforming unit (CCRU) that would produce mixed xylene, toluene & benzene. PCOR’s facility is running at almost full capacity of 180,000bpd. The expansion would raise capacity to 300,000bpd. PCOR has set P15bn capex for 2018 for local & Malaysia operations.

SEVN sets P3.5bn for expansion:

Philippine Seven Corp. (SEVN) has set P3.5bn in capex for 2018 to support is store expansion. SEVN booked 2,329 stores as of March 2018, 78% of which are in Luzon, 14% Visayas, the balance in Mindanao. Of the total, 47% are co.-owned, the rest franchised.

X unit prepares Singapore coin sale:

Xurpas Inc. (X) subsidiary, ODX Pte Ltd., will hold an initial coin offering where utility tokens of up to US$100mn will be sold to institutional & accredited investors as defined under Singapore laws. ODX will allow consumers to access the internet for free via sponsored data packages. The fund raising exercise will help build ODX infrastructure. Meanwhile, the tokens are not available for sale to citizens or residents of the Phils., US or China.

Firm prepares IPO:

SEC cleared Wenceslao & Associates, Inc.’s P15.5bn IPO through the offer of 679.2mn shares at P22.90 apiece. An over allotment option of 101.876mn shares will be in place that could push proceeds to as much as P18bn. Proceeds will be earmarked for its 204ha. Astana City. Offer run is 18-22 June, listing on 29 June. The firm generated P1.56bn net income in 2017 (+30%).


March remittances -9.8%:

Data from BSP showed remittances for March fell 9.8% at $2.36bn, reversing Feb.’s +4.5%. This stemmed from the repatriation of Filipinos from Kuwait & base effect as a result of the sharp increase in remittances in March 2017 at 10.7%.









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