Philipines Market Insights 2018.8.29


News Highlights: Upward momentum was maintained in US equities (DJIA +14pts, Nasdaq +12pts), riding on easing trade fears heralded by US-Mexico talks. At the local front, BSP chief Espenilla sees 2019 inflation to settle at 2-4%, while Atty. Alexis Lumbatan appointed as ERC member by PRRD. AEV’s banking arm and 3rd telco candidates led headlines: UBP sets rights offer at P62.97/share; PTT ups authorized capital; ISM sells treasury shares.





Bourse scored higher, PSEi @7,844: Participants cheered the latest US-Mexico accord, which could pave the way for a renegotiated NAFTA deal. After moving within 7,7707,862, the PSEi closed 78 points up at 7,844 (+1%) with property (+0.8%) & holdings (+0.9%) among sector winners. Gainers among actively-traded shares were: ALI (+P0.10 at P44); ICT (+P2.65 at P95.15); SMPH (+P0.50 at P39); SM (+P22 at P970); & BDO (+P2.80 at P130.80). Advances-declines fared 112-94, on P7bn turnover. Net foreign buying stood at P474mn.
Subdued trades: Relatively soft session is expected, as some fund managers adjust their responses to the latest US-Mexico trade deal. Some might opt to take profits from the latest ascent, after DoF highlighted challenges in getting the sequel corporate tax reform measure (TRABAHO) passed. Specific stock plays might be highlighted, partly energytied, given the latest appointee in ERC that would help resume PSA approval. Others include telco (upcoming bid for 3rd telco slot) & upstream petroleum sector (int’l. roadshows). Immediate support is 7,800, resistance 7,850-7,880.


Higher on easing trade anxiety: Asian marts ended mostly higher Tuesday, drawing strength from Wall Street’s ascent, lifted by easing global trade fears due to recent USMexico trade talks.


US shares slightly up: US equities scored on the plus side, but with very little movement, post US-Mexico trade deal. DJIA +14 points, 26,064 (+0.05%), Nasdaq Comp. +12pts, 8,030 (+0.15%).


Upcoming inventory report pushed retreat: Oil slipped Tuesday, breaking another winning streak, as investors positioned ahead of US crude inventory data report Wednesday. Intraday losses were however capped by expectations of further receding output. West Texas Intermediate (WTI) shed $0.31 to $68.56/barrel.


UBP sets rights offer at P62.97/share:

Union Bank of the Philippines, Inc. (UBP) has set P62.97/share as offer price for its 1:6.6644 rights offer. Ex-date will be 29 Aug., offer run 10-21 Sept. 2018. Proceeds will be used for continued growth of assets of the bank (adjusted ex-rights at P72.60).

Tollway unit of MPI open to staggered & gradual tariff increase:

Metro Pacific Investments Corp. (MPI)’s tollways unit, MPTC, is open to settling its toll adjustment issue with DoTr. Transportation Sec. Tugade said they’ve asked for gradual adjustment that can be implemented on staggered basis. MPTC earlier said foregone revenues from tariff already exceeded P8bn.

PTT ups authorized capital to P15.6bn:

Philippine Telegraph and Telephone Corp. (PTT) will hold its shareholders’ meeting on 14 Sept. to approve: (1) the increase in authorized capital from P3.8bn (1.5bn common at P1 par, 230mn convertible, redeemable preferred shares at P10/share) to P15.6bn (3bn common at P1/share par; Series A convertible, redeemable preferred of 6.75bn shares at P1/; Series B convertible, redeemable preferred of 1.8bn shares at P1/share par value; Series C 250mn shares at P1/share par value). It will also have a debt-equity conversion of P8.8bn & waiver of rights offer.

ISM sells treasury shares at P1.45/share:

ISM Communications Corp. (ISM)’s Execom approved the purchase by Accion Common Dev’t. Fund SPC of 841.945mn treasury shares at P1.45 apiece. The P1.22bn will be settled 25% upon purchase, 75% no later than end of 2018. Accion is a Singapore-based fund management firm.

New IR appointments for ABG & LIHC:

Asiabest Group International Inc. (ABG)’s new IR is Mr. Richard N. Palou effective 24 August 2018. Meanwhile, Lodestar Investment Holdings Corp. (LIHC)s’ new IR effective same date is Ms. Venus Gregorio.

UPM granted EP for mining claims:

United Paragon Mining Corp. (UPM) received from MGB its exploration permit (EP) for Camarines Minerals, Inc.’s (CMI) mining lease contracts covering an amended 580.272ha. The contracts were applied for conversion to MPSA covering 56 mining claims.


Settled inflation seen in 2019:

BSP chief Espenilla, Jr. sees inflation would remain elevated in 2018, but settle within 2%-4% in 2019. Among the measures that would cap further price increases would be rice tariffication, allowing imported round scad (galunggong), temporary suspension of Special Safeguard Measures for chicken meat imports & close monitoring of importation of min. access volume (MAV) for pork.

New ERC member appointed:

Pres. Duterte appointed Davao-based Atty. Alexis Lumbatan as ERC member, replacing Gloria Victoria Taruc who retired last 10 July.









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