Philipines Market Insights 2018.5.23


News Highlights: U.S. shares took a hit following Trump’s comments on trade talks with China (DJIA -178pts, Nasdaq -15pts), while regional marts mostly slumped despite overnight strength from Wall Street. At the local front, Malacañang voiced openness to suspend fuel excise taxes if int’l oil reaches $80/barrel; LRT operator sought for higher fares; deposit refund on electric bills filed to ERC; SMC issued its P10bn, 2-yr note to be offered at 5.25% pa.





Local shares dipped 11 points at 7,646. Local equities failed to hold onto its 41-point gain in early trades, as profit-taking clipped the bourse’s advance. The PSEi finished 11 notches lower at 7,646 (-0.15%) led by financials (-0.8%) with only industrial shares bucking the trend (+0.5%). SMPH (-P0.55 at P37.25); BLOOM (-P0.44 at P11.80); & MBT (-P0.45 at P81.50) led decliners, while HOUSE (+P0.02 at P7.21); ICT (+P1.20 at P37.25); & ALI (+P0.05 at P41.95) defied the slide. Turnover remained pale at P4.6bn with gainers-losers at 78-110.

Another mixed tone. Shares might go through mixed sessions, depending on the tide if players would heed to overseas trends or headlines at home. Some might cheer the possibility of suspending excise taxes on fuel that could arrest inflation concerns. Meanwhile, turnout might remain thin, unless new catalysts emerge. Immediate support is 7,600, resistance 7,680.


Mostly slipped. Overnight strength from U.S. shares and easing of trade tensions failed to spur rallies in most Asian marts Tuesday as investor confidence remained bleak across the region.


Trump’s remarks weighed on US equities. Pres. Trump said he was not pleased with the latest US-China trade talks & raised doubts on the upcoming North Korea summit. DJIA -178 points, 24,834 (-0.72%), Nasdaq Comp. -15pts, 7,378 (-0.21%).


Oil settled lower. Oil edged lower Tuesday as players weighed the potential influence of Iran and Venezuela developments against prospects for U.S. crude supply, which declined by 1.3mn barrels according to API. West Texas Intermediate (WTI) shed $0.04 to $72.16/barrel.


SMC prepares fixed-rate note to raise P10bn:

San Miguel Corp. (SMC) has issued its 2-year fixed-rate notes worth P10bn. The notes will be offered to qualified buyers at fixed interest of 5.25% per annum & will be listed in PDEx.

AP eyes increased sale to contestable customers:

Aboitiz Power Corp. (AP) aims to raise contracted capacity to contestable customers by at least 100MW for 2018. This covers usage of at least 750kw. AP’s est. contracted capacity in 2017 was 300-400MW out of 3,000MW sellable capacity.

PSB prepares P15bn LTNCTD float:

Philippine Savings Bank (PSB)’s board approved the issuance of P15bn long-term negotiable certificates of time deposits (LTNCTDs) in 2 or more tranches over a period of a year, with tenor of 5.5 years. Proceeds will help PSB expand its consumer banking operations & subject to BSP clearance.


Palace open to fuel excise tax suspension:

Malacañang is open to suspending excise taxes on diesel, LPG, kerosene & bunker fuel if int’l. crude prices reaches $80/barrel. BIR meanwhile, said the tax on oil products brought an extra P4.73bn in 1Q18 in terms of taxes.

LRT1 sought for higher fares:

Light Rail Manila Corp. (LRMC) wants to raise LRT fares by P5-P7 this August from the present P15, P20 & P30, depending on distance traveled. LRMC is comprised of AC Infra Holdings, MPI & Macquarie Infra. The increase was needed due to inflation & enable LRMC to recover P7.5bn to upgrade the existing system.

Electric bill deposit refund filed:

House Makabayan bloc filed a bill to probe MER’s bill deposit program, as it did not go through public consultation. Makabayan also called on ERC to direct MER to refund bill deposits. MER argued, that the deposit goes to other electric coops & distribution utilities.

NAIA group proponent revises rehab offer:

NAIA Consortium revised its offer to rehabilitate NAIA at P106bn & for shorter concession of 15 years, vs. the old P350bn proposal for 35 years. The group is composed of Aboitiz InfraCapital, AC Infra, AGI, Asia’s Emerging Dragon, FDC, JGS & MPC. DoTr sees deciding on the proposal within the month prior to submission to NEDA.

Antonio’s Rev. Precrafted gets Puerto Rico contract:

Group Cacho of Puerto Rico awarded the US$13.5mn contract to Revolution Precrafted Properties for the delivery of 2,000 residential villas. Group Cacho has the option to increase the units depending on demand. Since Hurricane Maria hit the island last Sept. 2017, 70k houses were destroyed while 300k more were damaged.









Philipines Market Insights 2018.5.16


Philipines Market Insights 2018.5.25