Philippines Market Insights 2017.10.30


News Highlights:  The Department  of Transportation (DoTr) confirmed  original proponent  status for San Miguel Corp (SMC)'s P700bn Bulacan  international  airport. Manila Electric Company (MER) 9M17 core net income at P15.4bn (+3% y‐o­‐y)  on higher sales volume and higher customer base. On the economic front, The country’s outstanding  debt reached a new record high of P6.444tn at the end of September,  +5.9% y­‐o­‐y, as per data from the Bureau of the Treasury. Meanwhile,the Bankgo  Sentral  ng  Pilipinas  (BSP)  approved   excluding   loans  guaranteed   by  multilateral   financial  institutions   (MFIs)  from  regulatory   limits  on  banks'  loans  to subsidiaries or affiliates.





Mart rebounds  upon close, PSEi @ 8,296: Mart offsets losses from early trading hours as it rebounds upon market-­‐on-­‐close. All sectors ended in green except Holdings, with Financials (+0.86%) and Property (+0.55%) bagging the most gains. Among actively traded shares were:  ALI  (+P0.55 at  P43.35), SM  (‐P12.00  at  P935.00), BDO  (+P3.00 at  P138.00), AC (+P12.00 at P1,030.00), and ICT (+P1.00 at P104.00), on 4.6bn turnover. Market breadth was neutral, 95-­‐95, with net foreign selling at P531.73mn.   

Soft  trading  ahead  of  holidays:  Trading  might  be  somewhat  soft  today  as  investors  are likely   to  continue   prior   session's   last  minute   bargain-­hunting   on  upbeat   Wall   Street performance,  while  also  balancing  pressure  to  take  profits  ahead  of  the  2-­day  holidays. Immediate support 8,200, resistance 8,370.


Marts mostly up: Japan stocks led gains in the Asian region boosted by a decline of the yen against the dollar, while the Hong Kong benchmark rose after underperforming


Nasdaq ends at records: The tech­‐stacked Nasdaq index stellarly outperformed the Dow at +144pts,  a  first  since  2002,  on  the  back  of  better‐than-­‐expected  quarterly  results.  US markets also cheered 3Q17 GDP which grew 3% vs. the estimated 2.5%.


Oil prices up on extended  supply cut: Oil prices rose after Saudi Arabia & Russia supported to extend OPEC's supply cut deal by another 9 months, from March 2018.   OPEC's next policy meeting is Nov. 30. West Texas Intermediate (WTI) climbed $1.26 to $53.90/barrel.


SMC orig. proponent for P700bn international airport:

The Department of Transportation (DoTr) confirmed original proponent status for San Miguel Corp (SMC)'s P700bn Bulacan international airport. Project will have 4 parallel runways with capacity of 100mn pax/year (vs. NAIA's 30mn pax capacity).

MER 9M17 net income +3% yo­‐y:

Manila Electric Company (MER) 9M17 core   net  income   at  P15.4bn   (+3%   y‐o­‐y)   on  higher   sales   volume   at 31,401GWh (+4%) and higher customer base to 6.25mn accounts (+4.6%).

MER’s  MGen  urges  ERC  to  act  on  pending  PSAs:

 Meralco   PowerGen (MGen)   wants  the  Energy  Regulatory   Commission   (ERC)  to  act  on  its pending  power supply agreements  (PSA) with MER to ensure the security of supply in Luzon.   MER said its 455MW San Buenaventura coal-­‐fired plant in Mauban, Quezon (SBPL) is more than 50%-­‐complete  & will start operations mid-­‐2019. SBPL is a joint venture between MGen & New Growth  BV,  a  subsidiary  of  the  Electricity  Generating Public  Co.  Ltd. (EGCO) Group of Thailand.  Redondo Peninsula Energy (RP Energy), where MGen has 47% stake, remains pending before the ERC

PCOR files graft case vs. PNOC chief:

Petron Corp. (PCOR) filed a case before the Ombudsman against the Philippine National Oil Company (PNOC) chief Reuben Lista for an alleged 'unexplained wealth'. This is on top of the earlier case filed for breach of its compulsory sale-­‐leaseback contract with PNOC

PAL books  losses  with P6bn  payment  to gov’t:  

Philippine  Airlines  (PAL) sees losses for 2017 with its P6bn payment to gov't for unpaid navigational fees & the firm plans to secure loans from local banks. Despite this, PAL plans  to submit  its unsolicited  proposal  for  NAIA-­‐2  expansion  by end  of 2017, with planned  spending  at $350mn-­‐$450mn. PAL is also scouting  for a partner that would take 25%-­‐30% equity. PAL is also looking for possible partners for airport operations,  possibly within the Lucio Tan Group (LTG)

BPI launches LTNCD offer:  

Bank of the Philippine Islands (BPI) launched its P5bn, 5-­‐1/2 year long term negotiable certificates of time deposit LTNCD (from P30bn plan), offer rub: 26 Oct-­‐16 Nov 2017, listing date Nov 24. Indicative rate: 3.625%-­‐3.75%

UBP sees double­‐digit growth:

Union Bank of the Phil. (UBP) sees double-­‐ digit growth in net income for 2017 from P10.1bn in 2016 (+67% y­‐o-­y) on strong  lending  &  credit  line  extension  to  retail  clients  and  SMEs.  UBP booked 1H17 earnings of P4.4bn (+11%)

RCB clarifies it is not for sale:

 Rizal Commercial Banking Corp. (RCB) is not in talks with BDO or BPI Banks on rumored sale of the bank.

ARA to develop 140ha  in Caloocan:

Araneta Properties (ARA) plans to transform 140­‐ha. in Caloocan into a central business district and funding options  are  being  reviewed.  This  project  is  on  top  of  its  340ha.  lot  in Bulacan called Colinas Verdas in joint venture with Sta. Lucia Land, Inc. (SLI)

HLCM 9M17 net income 58% yoy:

Holcim Philippines  Inc. (HLCM) 9M17 net income at P2.3bn (-­58%), 3Q17 at P337mn (-­81%).

CIC simulated 9M17 at P752mn:

Concepcion  Industrial Corp. (CIC)’s 3Q PATAMI (Profit after tax and minority interests) at P182mn (+12% y‐o­‐y), simulated 9M17 at P752mn (+9% y-­o­‐y)

BRN ties up  with Rebisco on  hydropower:  

A  Brown  Company  (BRN) confirmed hydropower projects that will be undertaken via subsidiary, Hydro Link Projects Corp., through a tie-­‐up with Rebisco Group.

PA  changes  primary  purpose: 

 Pacifica  Inc.  (PA)'s  board  approved   the change in primary purpose to a holding firm + inclusion of 'power to guarantee' as part of its secondary purpose. Par value to be raised from P0.005 to P1/share, then increasing authorized capital from P200mn to P5bn.

BSC acquisitions  abroad:

Basic Energy Corp. (BSC) will acquire: 49% of VO Net Biodiesel Asia Co. Ltd that operates 1.2MW in Kalisin, Thailand; 10% of HK-­‐based Solmax Power Ltd's 14MW solar plant & 10% in 25MW biomass power in Japan   subj. to due diligence; 12.5% in Vintage Eng'g Ltd that owns 220MW solar plant in Minbu, Myanmar.

CHP 9M17 net income 63%  yoy:

Cemex  Holdings  Phil. (CHP) 9M17 net income  at  P688mn  (-­‐63%  y-­o-­y),  3Q  at  P202mn  (­79%  q-­o­‐q),  on  lower cement volume and prices due to 3Q’s rainy season.


PH debt hits P6.444tn in 9M17:

The country’s outstanding debt reached a new record high of P6.444tn at the end of September,  +5.9% y‐o­‐y, as per data from the Bureau of the Treasury.

BSP excludes MFI loans from regulatory limits:

The Bankgo Sentral ng Pilipinas (BSP) approved excluding loans guaranteed by multilateral financial institutions (MFIs) from regulatory limits on banks' loans to subsidiaries or affiliates. This would free­‐up funds for lending in large-­‐ ticket projects that entice MFI guarantees.

No trading suspension on Nov 1315:

 BSP will not suspend clearing and settlement  on Nov. 13­‐15, but no clear announcement was given whether foreign exchange (forex), bond trading and open market will go on regular operations  for the said dates.

BOI approves P35bn worth RE projects:

The Board of Investments (BOI) has approved 4 Renewable Energy (RE) projects worth P35bn. 3 of these projects were of Currimao Solar Energy Corp., while the other project was that of VS Gripal Power Corp.

PH  selfsufficiency  in  rice  up  7%:  

Based  on  data  from  the  Philippine Statistics Authority (PSA), the Philippines’ self-­sufficiency in rice improved to 95% from last year’s 88.9%









Philippines Market Insights 2017.10.20


Philippines Market Insights 2017.11.03