Philipines Market Insights 2019.1.3
News Highlights: US shares scored higher (DJIA +18pts, Nasdaq +30pts) as bargain shopping continued. At home, PMI gauge for Dec slowed to 53.2 in Dec. vs. Nov.’s 54.2. Energy-related news lead headlines: Bataan coal plant from SMC & MGen; AC Energy to focus on RES.
PSEi kicks-off 2019 with gains, at 7,489: Rebound in US equities inspired early advances, though sessions gyrated as some seized on rallies to exit. The PSEi managed to close 23 points higher at 7,489 (+0.31%) with gains in property (+2.37%) and mining & oil (+1.78%) countered by financials (-0.65%) & holding firms (-0.33%). SMPH (+P1.20 at P37); AC (+P6 at P906); & ALI (+P0.70 at P41.30) primed index movers higher, while SM (-P2 at P915.50); & BDO (-P3.80 at P127) fell. Participation was thin at P3.2bn as gainers beat losers 96-85. Foreigners were net sellers, albeit low at P4.6mn.
Limited zone: Trades might attempt to scale higher on US equities’ lead, although movements would likely stay limited as fund managers digest prospects for 2019. Specifically, participants would want to see if enough catalysts are in place to warrant increased appetite for equities investing. Trading opportunities are in store for sectors that lagged in 2018, alongside second- & third-tier plays. Continue to monitor momentum build-up, as participants shake-off the holiday blues. Immediate support is 7,450, resistance 7,500-7,530.
Mixed trades, but mostly lower: Asian bourses erased early gains from Wall Street’s recovery as traders zoomed-in on a contraction in manufacturing output from China, stoking fears of a global growth slowdown.
US equities scored up: Continued bargain shopping aided Wall Street’s advance with gauges ending slightly higher. DJIA +18 points, 23,346 (+0.08%), Nasdaq Comp. +30pts, 6,665 (+0.46%).
Crude sharply recovered: Oil posted broad gains Wednesday after reports detailing a 5mn decline in Saudi Arabian crude exports in December. West Texas Intermediate (WTI) rose $1.13 to $46.54/barrel.
Bataan coal plant from SMC & MGen:
San Miguel Corp. (SMC) Global Power & MGen of Manila Electric Company (MER) plans to spend P99bn for 1,200MW coal facility in Mariveles, Bataan on 150ha. lot within Mariveles Ecozone. The plant will use Indonesian coal & local sources from Daguma & SCC. Completion is slated in 2022 upon approval of permits. It will supply 528MW to MER pending approval of PSA from ERC.
AC Energy to focus on RES:
Ayala Corp. (AC) Energy aims to build long-term relationship via its real electricity supply (RES) business. The firm’s CEO, Eric T. Francia, is looking at 100MW as a good size for this market. RES is governed by retail competition & open access (RCOA).
DD upbeat on 2019 sales prospects:
DoubleDragon Properties Corp. (DD) sees P10.52bn rental income for 2019 from CitiMall, office, warehouse & hotel projects. It is also set to generate P6bn in sales from five Hotel101 projects from units in Davao, Boracay, Bohol & Palawan.
AEV allots funds for new feeds unit:
Aboitiz Equity Ventures, Inc. (AEV) plans to make extra investment in newly-acquired feeds unit, Gold Coin, but no firm plans have been made yet. AEV’s CFO Manuel Lozano said focus will be on Gold Coin’s integration in Pilmico Food within the next 2-3 years. AEV remains open to other acquisition opportunities in similar fields (animal feeds) or similar locations, like Vietnam, where a Pilmico unit already operates.
ANI prepares rights offer:
AgriNurture, Inc. (ANI)’s board approved 1:5 rights offer (1 for every 5 shares held) covering 153.7mn shares at P1/share. Proceeds will support the firm’s capital requirement & expansion. No other details were given.
ANI ups capital to cover private placement:
AgriNurture, Inc. (ANI) obtained SEC’s clearance to raise its authorized capital from P1bn to P2bn (at P1/share par value). The move would accommodate Earthlight Holdings’ subscription to 250k shares at P1/share par value, raising its issued & outstanding shares to 1bn shares. Also, ANI’s board approved the listing of total of 27.566mn shares for Mr. Chaohua Xia & Jiecheng Li at P18.16/share. Xia is GM of Jiangsu Lunyiang Construction in China while Li is engaged in property management in Guangzhou, China.
NOW prepares equity restructuring plan:
Now Corp. (NOW)’s board will reduce its par value from P1 to P0.70/share, to wipe-out its deficit. The move would reduce the firm’s authorized capital from P2.12bn to P1.442bn, pending SEC’s clearance.
VUL assigns mining interest to UPM, on top of donated properties to employees:
Vulcan Industrial & Mining Corp. (VUL) signed a deed of donation worth P87k of real properties in Roxas, Palawan in favor of former employees of the firm who live or used to live in the said area. VUL also assigned MPSA 092-97-VI & 113-98-VI in Negros Occidental, to UPM.
EG divests internet cafes:
IP E-Game Ventures, Inc. (EG) is divesting its Netopia internet cafe venture as consumers shift to mobile devices & places with free Wi-Fi. EG will assign P63mn worth of shares in Netopia operator Digital Paradise, to Y-Fi Business Solutions.
Slower PMI gauge for Dec:
Nikkei Phils. Manufacturing Purchasing Managers’ Index (PMI) slowed to 53.2 in Dec. vs. Nov.’s 54.2. PMI reading above 50 connotes improved business conditions, while a score below 50 indicates deterioration.
SSS eyes property sale:
SSS is preparing to bid 8 units in Pryce Centre Condominium in Makati for min. bid price of P51.6mn & 1 condo at Renaissance Tower 1000 in Pasig City for P27.9mn. Pre-bid conference is set on 29 Jan.