Philipines Market Insights 2018.8.17
News Highlights: Set trade talks between US & China soon into the month sent US benchmarks sharply higher (DJIA +396pts, Nasdaq +32pts). At the local front, PRRD and economic managers to meet today for 2019 budget discussion. MWC unit enters JV for Bulacan concession; DMC mining unit reports good 1H18 shipment.
Trade tariff gridlock weighed on sentiment, PSEi @7,517: Participants gave more weight to overseas headlines, specifically on Turkey’s retaliation against the US & sequels to China’s move to seek WTO’s aid on the legality of US trade policies. The PSEi fell 23 points at 7,517 (-0.31%), after falling to an intra-day low of 7,479. Industrials fell most (-0.98%) while financials gained (+0.15%). PGOLD (-P0.10 at P44); SMPH (-P0.30 at P35.40); & BLOOM (-P0.20 at P9.50) led decliners among actively-traded shares. Turnover remained listless at P4.22bn, with gainers-losers scoring 91-108. Net foreign selling widened 37% to P884mn.
Anchored on hope: Local investors might take heart on US equities’ sharp incline (DJIA +396 points), anchoring on efforts to resolve the trade discord between China & the US. Skeptics meanwhile, may continue to stay on guard with volume turnout to verify momentum gauges. Selective play is seen, with select shares on headlines likely to corner local traders’ interest. Immediate support is 7,500, resistance 7,600-7,650.
Mostly retreated: Asian bourses mostly slipped Thursday, though paring losses intraday as trade tensions between the U.S. and China easing slightly after both agreed to hold lower-level talks later this month.
US equities up on trade talk resumption: Beijing’s move to send a delegation to the US on 22-23 August to resolve the trade conflict sent US equities higher. DJIA +396 points, 25,558 (+1.6%), Nasdaq Comp. +32 pts, 7,806 (+0.42%).
Crude slightly recovered: Oil futures ended higher Thursday shrugging off a surprise rise in U.S. crude inventories a day before while founding support from the prospects of revived US - China trade talks. West Texas Intermediate (WTI) climbed $0.47 to $65.36/barrel.
MWC unit enters JV for Bulacan concession:
Manila Water Company, Inc. (MWC)’s fully-owned Manila Water Phil. Ventures, through Obando Water Consortium Holdings (OWCHC), will own 90% of the JV firm with Bulacan Water District (BWD) for the construction, rehab, maintenance & operation of the water supply system & sanitation of BWD. The concession will be for 25 years.
DMC mining unit reports good 1H18 shipment:
DMCI Holdings, Inc. (DMC)’s DMCI Mining booked 482,762WMT shipments in 1H18 (+88%). These came from the old stockpile of Berong Nickel Corp. (BNC), covering 430k WMT, the balance from Zambales Diversified Metals. DENR allowed suspending mining firms to ship out their stockpiles to limit silt accumulation. However, DMCI Mining sees drastic drop in nickel shipment in 2H as the old stockpile is nearly depleted.
Firms buys into ISM for P1.45/share:
ISM Communications Corp. (ISM)’s Execom approved the purchase of 883.73mn unissued ISM shares at P1.45/share by Dennison Holdings Corp., a firm owned by Dennis A. Uy. 25% of the P1.28bn purchase will be paid upon subscription, 75% no later than end of 2018. Dennison will own 45.13% of the outstanding capital of ISM.
DFNN expands revenue stream, buys into Kirshner Games Int’l:
DFNN, Inc. (DFNN)’s board approved the set up of 3 subsidiaries that will be engaged in software dev’t., new gaming technology & IT services. These units will create new revenue stream for DFNN. Also, DFNN bought 100% of Kirshner Games Int’l, Inc., a service provider for Phil. Offshore Gaming Operators (POGO).
ANI submits original proponent proposal to NFA:
AgriNurture, Inc. (ANI) notified the Exchange that the National Food Authority (NFA) has considered ANI’s proposal on original proponent status for a project involving a joint venture (JV) for the rice supply requirements of NFA. The project will now proceed with the technical & legal processes under NEDA’s terms & procedures, on JV between government & private entities.
TUGS gets stake in tugboat operator:
Harbor Star Shipping Services, Inc. (TUGS) bought 30% of High Energy Marine Services (HEMSI), a dominant tugboat operator in Manila South Harbor. The move would allow TUGS to assist operations in Manila South Harbor, aside from MICT. HEMSI also operates in Bataan.
RCI plans capital hike, act as co-obligor for unit’s term loan:
Roxas and Company, Inc. (RCI) will hold a special meeting on 10 Sept. to approve the increase in its authorised capital stock & creation of preferred shares. The board will also seek approval for RCI to act as comaker/surety of Roxaco Land for the latter’s P250mn term loan & pledge RCI treasury shares as security. No other data was given.
MAH prepares share reclassification:
Metro Alliance Holdings & Equities Corp. (MAH)’s board approved the reclassification of the firm’s A & B shares into a single class of common share, with no changes to rights & privileges. No other data was given.
Ex-date 20 Aug. 2018:
GLO P22.75, payable 06 Sept.; PERC P0.05, payable 20 Sept.
Meeting on budget set:
Economic managers will meet Pres. Duterte today to discuss a compromise on 2019’s budget & a ‘hybrid’ system that would include funds that can be disbursed for more than a year. The House is also poised to resume work despite their 17-27 Aug. break.