Philipines Market Insights 2018.5.3


News Highlights: The US Fed retained its status quo on monetary policy, but US equities weakened on possible restrictions on China’s sale of telco equipment. Within the local front, unnamed sources claimed MPI is firming up plans to buy an initial 40% in Air21 for its logistics foray. MER’s rival in the other hand, filed a case against Ghana’s agency. Factory gauges meanwhile improved in April (Nikkei Phils. Mftg. Purchasing Managers’ Index at 52.7 versus 51.5 in March).





Mid-session selling weighed on PSEi, closes at 7,736: Unable to hold onto its 38-point gain in early trades, the PSEi buckled under selling pressure mid-session, before closing 83 points lower at 7,736 (-1%). Participants digested key headlines, including the signing of EO on contractualization. Holding firms (-1.6%) & services (-1%) were mostly down. Among actively-traded shares, ALI (+P0.05 at P40.85); BDO (+P0.60 at P132.30); & SM (+P7.50 at P947.50) rose, while URC (-P1.50 at P139); AC (-P36 at P930); & JGS (-P3.35 at P60.60) fell. Turnover was modest at P5.54bn, with gainers-losers, 117-87.
Mixed tone: Another mixed session might be seen, as participants weigh whether the market would give credence on the Fed’s status quo or on Wall Street’s renewed weakness over its trade spat with China. Some might also factor-in the impact of provisioning from TRAIN2’s corporate income tax in select listed firms. Second- & third-tier bets may continue to lead, riding on their specific stories. Immediate support is 7,650-7,680, resistance 7,750.


Bourses mixed: Asia-Pacific markets were mixed, ahead of U.S.-China trade negotiations, plus the Fed’s latest policy statement.


Fed retained status quo on interest rates: The US Fed kept interest rates steady & said economic activity had been growing at a moderate pace while hinting of stronger job growth.
Still on US-China trade spat, shares fell: Possible restrictions on China’s sale of telco equipment in the US prompted selling in Wall Street, pulling gauges lower. DJIA -174 points, 23,924 (-0.72%), Nasdaq Comp. -29pts, 7,100 (-0.42%).


Oil ended higher: Oil prices settled higher, as market concerns over Venezuela’s struggling crude production reignited after the International Monetary Fund (IMF)’s threat to expel the nation. West Texas Intermediate (WTI) rose $0.68 to $67.93/barrel.


MPI confirmed talks with Air21, but no details yet:

Unnamed sources claimed Metro Pacific Investments Corp. (MPI) is firming up plans to buy an initial 40% in Air21 for its logistics foray. Sources added, MPI plans to get a controlling block within a 2-year period. MPI clarified to the Exchange that discussions are ongoing, but there are no specific details yet.

MER rival filed case against Ghana agency:

Chinese rival BXC Company Ghana Ltd. filed a court case against Millennium Dev’t. Agency (MiDA) of Ghana, after naming Manila Electric Company (MER) as the preferred bidder for the contract to manage, operate & invest in the Electric Company of Ghana (ECG). BXC alleged, the move was ‘arbitrary & without basis’.

Quezon coal-fired plant construction 84%-complete:

San Buenaventura Power Ltd. (SBPL) encountered 2-3 months delay in the set-up of the 455MW coal-fired power plant in Mauban, Quezon, but completion is still on track mid-2019. The province was affected by tropical depression ‘Maring’ last Sept. & Urduja in Dec. 2017. SBPL is a JV between MGen of Manila Electric Company (MER) & Thailand’s Elec. Gen. Public Co. (EGCO).

BPI completes rights offer:

Bank of the Philippine Islands (BPI) completed its rights offer priced at P89.50 apiece. The shares were offered at 1 rights share for every 7.0594 shares held. This brought BPI’s common equity Tier 1 ratio from 11.84% to 15.63%.

PCOR targets 33% increase in new service stations for 2018:

Petron Corp. (PCOR) confirmed plans to set up as many as 200 service stations for 2018 to improve on its market share. PCOR opened 150 new stations in 2017.

ISM raises P560mn from sale of treasury shares:

ISM Communications Corp. (ISM)’s board approved the sale of 560mn treasury shares to fully-owned subsidiary, ISM Equities Corp. at P1/share. ISM also affirmed plans to pursue investment opportunities & declaration of cash dividend.

ANI plans warrants offer, to issue new shares to Gold Fresh Ltd:

AgriNurture, Inc. (ANI)’s board approved the issuance of 5,772,006 primary shares at P13.86/share to Gold Fresh Ltd. Also, ANI’s board approved the issuance & listing of stock warrants in favor of ANI Foundation. Total warrants is at 10mn shares, at 1:1 entitlement ratio. The warrants may be converted into common shares at P20/share, 5 years from issue date.

Companies goes ex-dividend on 04 May:

SM Prime Holdings, Inc. (SMPH) P0.30 reg., + P0.05 special, payable 23 May. Philippine Savings Bank (PSB) P0.75, payable 23 May


April manufacturing gauge improved:

Nikkei Phils. Mftg. Purchasing Managers’ Index improved to 52.7 in April from 51.5 in March. This was driven by improved demand, with readings above 50 indicating economic expansion.

Online gaming should not be within Pagcor’s jurisdiction:

Anti-Traps Movement of the Phils. filed a petition before the High Tribunal (SC) that restores the right for online gaming franchise to operate in ecozones & hold Pagcor in contempt for usurpation of judicial powers. The group believes Pagcor interpreted the law to include internet/online gaming.

Sen. Chief says LNG grant would create a ‘monopoly’:

Head of the Senate’s Energy Committee, Sen. Gatchalian, warned the Energy bureau (DoE) in creating a ‘monopoly’ in the LNG industry. DoE plans to grant single permit for the LNG project, estimated to cost $2bn. Energy USec. Donato Marcos said this is needed to ensure the commercial viability of the project.










Philipines Market Insights 2018.4.30


Philipines Market Insights 2018.5.9