Philipines Market Insights 2018.8.1


News Highlights: Renewed trade talks between US and China pushed US gauges higher (DJIA +108pts, Nasdaq +41pts). At the local front, BSP sees higher July inflation at 5.1%-5.8%. 3rd telco player announcement set by DICT, & mining exploration ban lifted by DENR. LNG terminal studied by Manny Pangilinanled MPI-MER, while expansion of hospital units eyed by MPI.





Bourse pauses for technical breather, PSEi @7,672: Tuesday’s session paused for technical breather, allowing gauges to close 101 points down at 7,672 (-1.3%). There was last-minute MOC boost, but was not enough to carry the PSEi back to its 7,773 intraday high. The drop was led by property (-1.7%) & financials (-1.2%). Decliners among actively-traded shares were: ALI (-P1.35 at P40.85); BDO (-P2 at P132); AC (-P14 at P999); & SMPH (-P0.25 at P37.75). Turnover improved to P6.85bn, as decliners beat winners, 130-65. Net foreign buying was maintained, albeit at a lesser pace, at P256mn.

Zeal resumption: Local equities may resume a modest climb, taking its cue from Wall Street’s strength from expectations the Fed would retain their benchmark rate, & catalysts to expedite approval of the tax reform plan at home. Key sector news may also provide the boost, specifically for telco, mining & energy. For now, local gauges might build a firmer base within the current zone, to support sturdier rises. Most might keep a close tab on turnover improvement, plus continuity of net foreign buying. Immediate support is 7,630, resistance 7,750.


Mixed tone: Asian marts took mixed ways Tuesday as investors took cue from Bank of Japan’s decision to keep monetary policy stead, but gains were pared by weak Wall Street overnight performance.


US shares up: Reports of renewed trade talks between US-China aided industrials’ advance & lifted gauges higher. The Commerce bureau also said consumer spending was up 0.4% in June from +0.5% in May. US GDP was +4.1% in 2Q from 1Q’s +2.2%. DJIA +108 points, 25,415 (+0.43%), Nasdaq Comp. +41pts, 7,671 (+0.55%).


Oil sharply down: Oil prices ended the month with a sharp decline following survey reports that OPEC output has hit YTD high in July by 70,000 barrels per day (bpd) to 32.64 million bpd. West Texas Intermediate (WTI) shed $1.71 to $68.42/barrel.


MPI-MER studies LNG terminal:

Metro Pacific Investments Corp. (MPI) chair Manny Pangilinan, is studying its participation in building LNG import terminal using Manila Electric Company (MER) & MPI. He underscored the importance of evaluating capacity based on 15- 16,000MW power demand. Next is cost of production since an efficient fuel source should be acceptable to consumers.

Hospital arm of MPI sees expansion:

Metro Pacific Investments Corp. (MPI)’s majority-owned Dr. Jesus C. Delgado Memorial Hospital aims to raise the number of beds to 100 by 2022. The firm is talking to buy lots beside the hospital & coming up with satellite clinics.

CEB targets China routes:

Cebu Air, Inc. (CEB) chief Lance Gokongwei said the delivery of 10 planes in 2019 will be primarily used for int’l. flights, specifically in Chengdu & Xi An, China. CEB has maintained its target of 22mn passengers for 2018.

DMW soon to complete office project:

D.M. Wenceslao & Associates, Inc. (DMW)’s office building, 8912 Asean Ave. (formerly Aseana Four) started in 1H18 & will be completed in 2021. This would provide 68,980sqm. leasable GFA. DMW’s residential condo project, Pixel Residences, will also be completed in 2019. The firm’s total GFA as of 1H was 89,914sqm. (+52%).

FOOD debuts affordable luxury premium tuna:

Alliance Select Foods International, Inc. (FOOD) launched its new premium line, Bay of Gold Select Tuna, made from 100% prime & select cuts of belly fillet. The item will have 5 variants, among which includes olive & chill add-on; manuka wood chips. Selling price is at P99.75-P215.

PHA enters MoU with Korean firm, plans listing by introduction for limestone unit:

Premiere Horizon Alliance Corp. (PHA) signed MoU with Korean firm, D-Eco Energy Ltd., to actively explore JVs in infra, tourism & power sectors. PHA will have its limestone unit, Redstone Construction & Dev’t. conduct a listing by way of introduction within 2018, subject to regulatory approvals. PHA is also developing a tourism estate in Puerto Princesa through West Palawan Premiere subsidiary.

PBC prepares P5bn LTNCD float:

Philippine Bank of Communications (PBC) got approval from BSP to issue P5bn long-term negotiable cert. of time deposits (LTNCDs) in one or more tranches with max. tenor of 5 years & 1 day, to 7 years. No further details were given.

PTT rehab plans covers debt-equity conversion:

Philippine Telegraph and Telephone Corp. (PTT) requested Makati City’s RTC a petition to exit from rehabilitation based on terms of its approved rehab plan. Part of this covers holding a shareholders’ meeting to raise PTT’s authorised capital to cover its debt-equity conversion. No other data was given.


BSP sees higher July inflation:

From June’s 5.2%, BSP sees inflation for July at 5.1%-5.8%. Drivers will be higher electricity cost, water rate adjustments, local gas & LPG prices, jeepney fares, among others. Official results will be released 07 Aug.

DoF targets revenue from tax reform sequel:

DoF sees P181.4bn in revenues for 2019 from the tax reform (TRAIN) package 1B. Total fiscal revenue is seen at P3.2tn (+13%). 1B covers tax amnesty & adjustments in excise taxes on vehicles, among others.

3rd telco player announcement set:

DICT chief Rio said the 3rd telco player will be announced first week of December. He also said settlement is seen to be made on 3G frequencies.

Mining exploration ban lifted:

DENR Sec. Cimatu lifted its 2-year moratorium in approving mining exploration permits although the ban on new mining operation is still in place. DENR USec. The said only those with existing MPSAs can proceed with exploration. The panel also said 23 out of 27 mines passed an initial review for compliance with regulations.









Philipines Market Insights 2018.7.27


Philipines Market Insights 2018.8.3