News Highlights: Megaworld Corporation (MEG) is set to open 4 new hotels this year. Meanwhile, debt watcher S&P Global Ratings (S&P) and the World Bank raised growth forecasts for the Philippines. S&P expects our country to grow above 6% until 2019, but a credit rating upgrade is unlikely for the next two years.
Mart took a breather, PSEi @7,321: Local equities took a breather, opting to take profits from the 6‐day winning streak. PSEi scored 42 points lower to 7,321 (‐0.58% day‐on‐day), with most sectors in the red. Actively‐traded shares were: SMPH (‐ P0.30 at P30); AC (+P3 at P796); and SM (‐P10 at P680). Volume reached P7.1bn, with loser outpacing gainers, 99‐88, and net foreign inflows recorded at P455mn.
Might want to look for more cues: Mart might be going for some tepid gains on the back of Donald Trump’s press conference last night. Investors might want to opt for more clues before repositioning themselves once Trump assumes office by 20 January. Immediate support 7,280 resistance 7,370.
Marts mixed ahead of Trump presscon: Markets were mixed amid the impending press conference of US President‐elect Donald Trump on Wednesday. However, gainers for the day were backed by encouraging economic data and optimism on Trump's stimulus program.
Rallied on Trump conference: Equities rallied on Wednesday amid Donald Trump's first news conference. Market will now have to wait upon the translation of his pronouncements into actions and policies once he assumes office starting 20 January.
Oil gains on optimism: Oil futures scored gains on the back of signs of Saudi Arabia’s compliance on the output cut agreement and expectations from Donald Trump’s plans to boost the economy that could help lift energy demand. Moreover, investors seemed to have shrugged off the recent US data report on a weekly increase in crude stockpiles. February West Texas Intermediate rose $1.43 to $52.25/barrel.
MEG targets to open 4 hotels this 2017: Megaworld Corporation (MEG) is set to open 4 new hotels this year. These are Marriott Courtyard in Iloilo Business Park, Savoy Hotel Boracay, Savoy Newport and Hotel Lucky Chinatown in Binondo. MEG sees tourism as a potential growth driver. To date, it owns 3 homegrown hotel brands – Richmonde, Belmont and Savoy.
AC's AC Energy ties up with UPC Renewables Indonesia: Ayala Corporation's (AC) AC Energy Holdings, Inc. has signed investment agreements with UPC Renewables Indonesia Ltd. for the development and operation of a wind farm in Sidrap, South Sulawesi. It costs $150mn and is the first greenfield offshore investment of AC Energy.
RCB thrift banking arm to expand outside Metro Manila: RCBC Savings Bank, the thrift banking arm of Rizal Commercial Banking Corp. (RCB) looks to expand its branch network outside Metro Manila. Currently, the bank has around half of its branches in Metro Manila and plans to lower the figure as soon as the expansion in the provincial areas commence. The savings bank had a branch network of 152 as of end‐June 2016.
S&P, World Bank pick Philippines as AP growth leader: Debt watcher S&P Global Ratings (S&P) and the World Bank raised growth forecasts for the Philippines. S&P expects our country to grow above 6% until 2019, but a credit rating upgrade is unlikely for the next two years. On the other hand, the World Bank projected GDP growth of 6.9%, 7.0% and 6.7% for 2017, 2018 and 2019, respectively. The World Bank also predicted that the Philippines will outperform its Asian neighbors even China, but will trail behind Cambodia, Laos, Myanmar and India.
TD yields decline amid normal liquidity demand: Both the 7‐day and 28‐ day term deposits were oversubscribed as funds return to the banking system after the holidays. The 7‐day tenor received P49.21bn bids for its P30bn volume, while the 28‐day tenor received P172.05 bids for the P150bn volume. Average rate declined to 3.0465% for the 7‐day term deposits, lower than the previous week's 3.0722%. The 28‐day rates averaged 3.357% from the 3.3778% of the previous week.
Duterte approves up to $2bn fund raising from overseas debt market: According to the treasury, President Duterte has approved the plan to raise up to $2bn from the overseas debt market to help fund this year’s budget and pay off liabilities. Discussions with banking partners on the timing of the issuance are already ongoing. Recall that in February 2016, the Philippines sold $2bn worth of 25‐year dollar‐denominated bonds, priced at a coupon of 3.7%.
Vehicle sales increase by 24.6% in 2016: Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) reported a 24.6% increase in vehicle sales for 2016, exceeding their 329,300‐unit target. Vehicle sales reached 359,572 units, higher from the 288,609 set in 2015. For the month of December, vehicle sales reached 34,104 units or 27.8% increase YoY. Toyota Motors Philippines Corp. remained the market leader in automobiles with 44.14% market share or 158,728 units, followed by Mitsubishi Motor Philippines Corp. and Ford Motor Co.
DENR to issue transport permit to SMC unit to remove ash: The Department of Environment and Natural Resources (DENR) said it will immediately grant the transport permit to SMC Consolidated Power Corp. to remove the limestone powder ash from its Limay power plant once the company files an application. San Miguel Corp. (SMC) president Ramon Ang said that the stockpiles of limestone powder ash is used for the company's cement production, contrary to earlier reports that those were coal residue.