Philipines Market Insights 2018.5.28


News Highlights: Energy shares took a hit following a plunge in crude oil futures, but tech shares climbed, leaving U.S. equities mixed (DJIA -58pts, Nasdaq +9pts). Regional marts were likewise left directionless amid trade concerns. Meanwhile at home, BTr will float P30bn RTBs this week, while Ease of Doing Business bill seen to be signed by the President. RCB’s P15bn SRO gets ok’d by the PSE; MER & AP interested in New Clark City project with BCDA; FNI’s P1bn follow-on offer delayed; & DM Wenceslao’s IPO cleared.






Mart settled slightly down @7,647. Sellers seized the local bourse’s climb previously, pulling the PSEi to an intra-day low of 7,606. From its 22-point gain in early trades, gauges closed 5 notches lower at close, to 7,647 (-0.07%). Gains in industrials (+0.7%) & holdings (+0.4%) were offset by financials (-0.6%) & property (-0.5%). SMPH (+P0.10 at P38); SM (+P4 at P867); & MER (+P5 at P335) finished on the plus side, while NOW (- P0.64 at P10.74); AC (-P7 at P935); & BPI (-P2 at P97) settled lower. Turnover remained pale at P4.8bn, with gainers-losers 95-92.

Sideways, up. Sessions might start sideways, possibly with slight upward bias, as participants turn their attention to local headlines. Crude futures’ descent could provide the boost, given Saudi Arabia & Russia’s hint to relax supply restrictions while volume might thin with the US’ long weekend holiday. The market will also digest upcoming float, that includes BTr’s P30bn retail treasury bonds. Continue to trade a range. Immediate support is 7,630, resistance 7,700-7,720.


Regional marts mixed. Trade concerns plus Wall Street’s weak overnight performance led regional marts to trade mix Friday, as cautious sessions were prevalent following Trump’s cancellation of NoKor summit.


US equities mixed. Energy shares fell as crude futures lost 4% at $67.88/barrel, after Saudi & Russia said they’re prepared to relax supply curbs. DJIA -58 points, 24,753 (- 0.24%), while tech stocks climbed, pushing Nasdaq Comp. +9pts, 7,433 (+0.13%). Volume was light ahead of Monday’s emorial Day holiday.


Oil prices plummet. Oil prices plummeted Friday as reports revealed OPEC and Russia considering lifting production to taper supply shortfall from Iran and Venezuela. Rising active U.S. oil rigs, indicating uptick in production, also contributed to the plunge. West Texas Intermediate (WTI) slid $3.44 to $67.27/barrel.


RCB’s P15bn rights offer gets PSE green light:

PSE cleared Rizal Commercial Banking Corp. (RCB)’s P15bn rights offer of 540mn new common shares. Pricing will be determined on 07 June, including entitlement ratio. The offer will run 25-29 June, tentative listing on 03 Aug.

RCB teamed-up with Japanese banks:

Rizal Commercial Banking Corp. (RCB) partnered with Japan’s Kansai Mirai Financial Group for SMEs firms in Japan who are looking to advance their business in the Philippines. Also, Osaka-based Kansai Urban Banking & Kobe-based Minato Bank signed an alliance accord with RCB. Kansai Urban has 138 branches & 17 sub-prances, while Minato Bank has 103 branches. RCB meanwhile, has 508 branches.

Davao project of ACR-ALI puts investment at P20bn:

Alsons Consolidated Resources, Inc. (ACR) said P20bn has been committed for the 27ha. Lanang, Davao City project that will be developed with ALI. ACR will own 60%, 40% for ALI. The investment will also cover infra. The site used to be ACR’s plywood facility & will be a smaller version of BGC.

Property arm of DMC’s landbank at 125ha:

DMCI Holdings, Inc. (DMC) Homes grew its landbank by 41% to 125.22ha., with land value of P6bn. Bulk of the addition are in Metro Manila. For 2018, 8 high-rise projects will be launched in Davao City Las Pinas, Manila, among others, with an expected sales value of P49bn (+53%).

MPI aims for LGU tie-up for waste-to-energy projects:

Metro Pacific Investments Corp. (MPI) is looking at tie-ups with LGUs for waste-to-energy facilities. MPI has submitted an unsolicited proposal for 40MW waste-toenergy in QC that will convert those in Palates dumpsite into energy.

MER, AP, interested in New Clark City dist. project with BCDA:

Manila Electric Company (MER) & Aboitiz Power Corp. (AP) expressed interest to invest via a JV with BCDA for the 9,450ha. New Clark City. MER operates Clark Electric Dist. (CEDC), the sole dist. firm in Clark Special Ecozone. AP is also looking at the scope of partnership through Visayan Electric (VECO).

Solon called MER PSAs as ‘sweetheart deals’:

Bayan Muna Rep. Zarate claimed Manila Electric Company (MER) customers will have to contend
with P1.55/kWh increase in electricity rates once its power supply agreements (PSAs) are awarded to sister firms. This will be on top of price adjustment resulting from TRAIN. Zarate branded the PSAs as ‘sweetheart deals’ as he allegedly claimed MER used ‘deceptive assumptions’ to arrive at the supposed P3.67/kWh average rate in the PSAs.

TUGS bagged barge contract for Cebu-Cordova project:

Harbor Star Shipping Services, Inc. (TUGS) was awarded P118mn contract by Cebu Link JV (CLJV) for 2 specialized barges. The vessel will be used for the construction of the Cebu-Cordova Link Expressway. CLJV is owned by Acciona Construction of Spain, First Balfour of FPH & DMC.

FNI float delayed:

Global Ferronickel Holdings, Inc. (FNI) said its P1bn follow-on offer will be delayed, as papers remain pending with SEC since its filing last 09 May. FNI plans to offer 250mn shares at P4/share.

RCI revisits solar plant plan:

Roxas and Company, Inc. (RCI) might revisit plans for 50MW solar plant this year. It earlier announced plans April 2015 for P1.7bn, but the firm focused in reorganizing its businesses. The plant will be in RCI’s 2,500ha. Nasugbu, Batangas property.

DM Wenceslao IPO cleared:

DM Wenceslao’s P17.8bn IPO got the Exchange’s clearance for its 679.2mn common shares at P22.90/share. An overallotment of 101.876mn shares will also be offered & 70% of total shares will be sold to foreign investors, 30% local. Proceeds will be used for its 204ha. Aseana City project. Offer period runs 18-22 June, listing on 29 June.


Ease of Doing Business bill to be signed:

Pres. Duterte is seen to sign this week the Ease of Doing Business & Efficient Gov’t. Service Delivery Act of 2018. The bill provides periods for issuance of permits/licenses & penalties in case these provisions are not followed.

P30bn RTB float coming:

Treasury bureau (BTr) will float P30bn retail treasury bonds (RTBs) this week, with pricing on 30 May & will be followed by public offering on 08 June. The notes will be issued 13 June & will mature 2021. Retail investors may secure placements in increments of P5k.

E2SAVE launched by DBP for energy projects:

DBP launched DBP Energy Efficiency Savings (E2SAVE) Financing program for public & private firms adopting new technology to advance optimal power consumption in energy-related projects. Eligible projects include replacement of mechanical & electrical eqpt. such as lighting, A/C, motors, chillers, pumps, etc.

S&P sees no overheating for Phil. Economy:

S&P Global Ratings doused fears the local economy is at risk of growing at an unsustainable rate. S&P also said the recent rate hike by BSP will help ease higher inflation expectations.









Philipines Market Insights 2018.5.25


Philipines Market Insights 2018.5.29