Philipines Market Insights 2018.6.14
News Highlights: The Fed raised overnight lending 25 basis points (bps) to 2%, affirming its outlook on the strength of the US economy. It also hinted tolerating inflation above its 2% target through 2020, & raising rates at least by 2 more for 2018. On the local front, Bureau of the Treasury (BTr) made a partial award of P7.6bn for the 7-year T-bonds at 5.976% average rate, 11.1 basis points higher than the 5.865 percent recorded in the previous auction.
PSEi slumped to 7,602: Profit-taking marked Wednesday’s trades, with net foreign selling at P1.5bn out of P6.8bn turnover. Some exited to reposition ahead of an expected uptick in US interest rates & results from the ECB meeting. PSEi slumped 168 points at 7,602 (-2%), led by holdings (-3%) & property (-1.5%). SM (-P28 at P900); MBT (-P2.15 at P77.05); AC (-P41 at P937); ALI (-P0.65 at P40.15); & BDO (-P1.50 at P136) led the decline among actively-traded stocks. Gainers-losers scored 66-127.
Cautious watch: Players might remain at bay for now, given yesterday’s sell-off, as they check on local equities’ response to the Fed rate hike. Skeptics are likely to test the PSEi’s staying power above 7,500 vs. the possibility to re-test 7,400. For now, attention will be on the peso’s trend, after moving above P53:$1. Speculative play is seen, as locals punt for intra-week range in select shares. Immediate support is 7,500, resistance 7,600.
Mostly beaten: Asian bourses were mostly lower Wednesday, as eyes were on key decisions from US’s FOMC and Eurozone’s ECB meetings that are expected to adopt stimulative policies that could fuel an economic rebound.
US equities down, Fed raises rates: The Fed raised overnight lending 25 basis points (bps) to 2%, affirming its outlook on the strength of the US economy. It also hinted tolerating inflation above its 2% target through 2020, & raising rates at least by 2 more for 2018. DJIA -119 points, 25,201 (-0.47%), Nasdaq Comp. -8pts, 7,695 (-0.11%).
Oil ended higher: Oil prices ended higher on Wednesday following a massive draw in U.S. crude supplies in the face of an ongoing expansion in output. West Texas Intermediate (WTI) climbed $0.28 to $66.64/barrel.
Opposition on Ghana concession awarding cleared:
The High Court of Accra, Ghana dismissed the case filed by bidder, BXC Co. (Ghana) Ltd., on Millennium Dev’t. Authority (MiDA), after the latter declared Manila Electric Company (MER) as the preferred bidder for the $535mn power concession. No official statement has been released by MER yet on the matter.
Tanduay overtook Bacardi in run market share:
Drinks Int’l. data showed Tanduay outpaced Bacardi after the former sold 19.5mn cases of run in 2017 (+17%) vs. Bacardi’s 16.8mn cases (-3%). Tanduay also secured 25.2% share in the Phils. for distilled spirits, 64% in Vis-Min.
CPG appoints Hallett for tourism & leisure unit:
Century Properties Group, Inc. (CPG) appointed Timothy Hallett as Pres. of its tourism & leisure business. Hallett was previously with Marriott Country Club in Europe & PGA Golf Management in UK & Asia.
ELI launches elite brand units:
Empire East Land Holdings, Inc. (ELI) will launch 1,900 new residential units in The Paddington Place (Mandaluyong) & Kahara Urban Resort Residences (Pasig City) under their elite brand. ELI’s landbank as of 2017 was 404ha.
NOW gets cleared for capital raising:
Now Corp. (NOW) secured SEC’s clearance for its P1bn preferred share float. Around 10mn redeemable, convertible preferred shares will be issued at P100/share. The float will also have 50mn underlying common shares to cover the conversion at P20/share, or 5 common per preferred share. Also, the 10mn preferred shares will go with 10mn detachable warrants to be given free, at 2 detachable subscription warrants for every preferred share.
ANI creates unit for farm technology:
AgriNurture, Inc. (ANI)’s board approved during a special meeting last 13 June, the formation of a fully-owned unit with P100mn authorised capital that would consolidate & focus on post-harvest & farm technology. ANI also approved the issuance & listing of 23mn shares at P13.86 apiece in favor of Takuhiro Kusumi.
VMC sought for regulators’ consent on changes to rehab plan.
Victorias Milling Company, Inc. (VMC) is amending its rehab plan that would include P1.19bn contingent liabilities with creditor banks. The amount covers refined sugar delivery orders (RSDO) & refined sugar queens (RSQ) that were purportedly issued by VMC & used by 51%-owned North Negros Marketing Co.
Companies goes Ex-date on 15 June 2018:
Leisure & Resorts World Corp. (LR) P0.0425, payable 12 July. D&L Industries, Inc. (DNL) P0.205 reg+P0.055 spcl, payable 09 July
7-year T-bonds rate rose to 5.976%.
Bureau of the Treasury (BTr) made a partial award of P7.6bn for the 7-year T-bonds at 5.976% average rate, 11.1 basis points higher than the 5.865 percent recorded in the previous auction. Total tendered amount reached P14.4bn.