Philipines Market Insights 2018.6.11
News Highlights: Ahead of the G7 meeting, U.S. shares ended higher (DJIA +75pts, Nasdaq +10pts). Over the weekend however, Pres. Trump reneged on G7 trade statement. At home, MRT3 proposal to be known by end of 2018; AC Health launched Vigo Health; CTA granted SMH partial tax refund. DM Wenceslao’s IPO price lowered to P12/sh from P22.90/sh, while RCB’s SRO priced at P28/sh.
Bourse takes a breather, PSEi @7,740. Profit-takers seized on the bourse’s recent strength, pulling gauges 62 points lower at 7,740 (-0.8%). Save for services (+0.2%), the decline was precipitated by holdings (-1%) & property (-1%). AC (-P14 at P966.50); MBT (-P2.55 at P80); GTCAP (-P17 at P1,000) were among decliners among actively-traded shares. Turnover receded to P4.8bn, with gainers-losers at 83-116.
Tight trades. Sessions might start soft on a three-day trading week, although profittaking could prevail due to lack of other moving catalysts. Traders would watch the PSEi’s staying power above 7,700, or possible retracement to 7,600. Attention might be sector-specific, with second-tier shares that have good stories, bound to lead. Immediate support is 7,700, secondary at 7,680, resistance 7,750.
Ended in red. Asian bourses were a sea of red Friday led by Chinese marts, as trade tensions ratcheted up ahead of the G7 summit.
US shares up. Wall Street scored higher, ahead of G7 talks on trade & the Fed meeting. Some also expect funds that exited emerging markets to be repositioned in US equities. DJIA +75 points, 25,316 (+0.3%), Nasdaq Comp. +10pts, 7,645 (+0.14%).
US makes U-turn on G7, China-Russia strengthened their pact. Pres. Trump disavowed G7’s joint statement on trade & criticized Canada’s PM Trudeau. The other G7 leaders meanwhile, affirmed to be advocates for rational global politics. Meanwhile, China & Russia expanded the 8-member Shanghai Cooperation Organization, designed to coordinate security policies across Asia & uphold the rules of an open world economy.
Higher rates seen. Market watchers see increased signs for the Fed & ECB to raise interest rates, as economic conditions improve. The Fed is seen raising rates by 25bps by Wed., while ECB might end its 2.55tn euro bond purchase plan on Thursday.
Oil prices drop. Oil prices registered declines Friday as energy investors weighed-in on a potential meeting late in the month against persistent concerns about Iranian and Venezuelan crude oil supply. West Texas Intermediate (WTI) slid $0.42 to $65.53/barrel.
MRT3 proposal to be known by end of 2018:
DoTr said Metro Pacific Investments Corp. (MPI) - Ayala Corp. (AC)’s unsolicited proposal for the rehab & takeover of MRT3 will be addressed by yearend. The consortium comprised also of Macquarie Infra Holdings, aims to invest P20bn for the project for 30-32 years.
Health unit of AC launches Vigos Health:
Ayala Corp. (AC)’s AC Health launched Vigos Health Technologies that would serve as backbone to set up 1,000 Generika pharmacies & 100 FamilyDoc clinics by 2020. The digital solution would cover record & clinic information system & health care management. For 2018, Generika targets 850 branches from 765, FamilyDoc at 54 from 34 branches.
San Miguel Holdings gets partial refund:
Court of Tax Appeals (CTA) granted San Miguel Holdings (SMH) P50.6mn partial tax refund on excess taxes paid. SMH filed for almost P110mn refund covering DST erroneously collected by BIR for 2011.
MEG cash div. yield at 1.3%:
Megaworld Corp. (MEG) declared P0.0622/share cash dividend, with ex-date on 21 June, payable 20 July.Equivalent yield is 1.3%.
CPG declares cash dividend, yield at 4%:
Century Properties Group, Inc.(CPG) will issue a total of P0.0172/share cash dividend to holders as of exdate 21 June, payable on 06 July. This is equivalent to 3.8% dividend yield.
GERI sees P8bn sales from Ortigas condo:
Global-Estate Resorts, Inc. (GERI) is looking at P8bn sales from the 36-storey condo project in Ortigas called The Fifth. Each unit will have balconies. Completion is slated in 2024.
DM Wenceslao IPO price lowered:
DM Wenceslao (DMW) lowered its IPO price from P22.90 to P12/share, to raise P8.15bn. Offer run is 18-22 June, listing 29 June.
BLOOM unit to buy shares for loyal patrons of Solaire:
Bloomberry Resorts Corp. (BLOOM)’s board approved Bloomberry Resorts & Hotels’ (BRHI) purchase of up to 1.5mn common shares of BLOOM at market price. The shares will be given as reward to Solaire’s loyal patrons & part of its marketing program.
RCB rights priced at P28/share:
Rizal Commercial Banking Corp. (RCB) finalized its 1:2.6132 rights offering at P28/share, with offer run set on 25- 29 June. Proceeds will strengthen the bank’s capital ratios & support asset growth.
EW raised initial tranche from LTNCD issuance:
East West Banking Corp. (EW) raised P2.45bn for the initial tranche of its P15bn LTNCD float.The notes will be due 2023 & listed on PDEx.
RTB coupon at 4.875%:
Bureau of Treasury (BTr) raised P122.77bn from its 3-year retail treasury bonds (RTBs) that will become part of the national budget. Coupon was set at 4.875%. Meanwhile, BTr plans to raise another $2bn from yen & $-based notes before yearend.
Wider April trade gap:
Statistics bureau (PSA) said April’s trade deficit widened to $3.62bn from $1.55bn last year. Exports for the month was -8.5%, imports +22%.
Fitch review team visits Manila:
Int’l. credit rating agency Fitch Ratings will visit Manila on 13-15 June to review the Philippine’s credit profile. The meeting will be attended to by DoF, DPWH, DTI & BCDA, among others.
Lower FiT to be filed by TransCo:
TransCo is eyeing lower Feed-in-Tariff (FiT) allowance rate in 2019 before the end-July deadline, because of a lower P4.6bn deficit. TransCo already filed for an increase in 2018 FiT of P0.2932/kWh, which is pending ERC’s approval.
Bidding for fuel marking contract readied:
Gov’t. will select among 5 prospective bidders its fuel marking & field testing system contract that aims to curb smuggling. The price ceiling was pegged at P0.08/liter over a 5-year period. For 2018, 21.9bn liters are seen to enter the country’s ports & sub-ports & is seen to rise to 26.6bn liters by 2022.
Open pit miners asked to change method:
DENR will shut down open pit mining firms unless they shift to acceptable alternative methods by the end of 2018. DENR chief Cimatu also said miners should adopt new technology to maximize mineral ore utilization & environment protection.