News Highlights: No sanctions will be imposed by the Bangko Sentral ng Pilipinas (BSP) on BDO Unibank, Inc. (BDO) following June’s card skimming issue, as the BSP said BDO remains compliant. Ayala Corp. (AC) via unit AC Industrial Tech. Holdings, will export 300 KTM motorcycles to Thailand this Dec. Manila Electric Co. (MER), through wholly-‐owned MSERV, and Mitsubishi Motors Philippines Corp. are teaming up to put up more electric vehicle (EV) charging stations in selected offices of the Department of Trade and Industry (DTI) and Department of Environment and Natural Resources (DENR). Meanwhile, BSP issued Circular 979, assigning lower risk weight of 20% (from the present 75%) on performing loans to micro small & medium enterprises (MSME) as long as these are guaranteed by a qualified credit surety fund (CSF) cooperative
Mart recedes after record-‐high, PSEi @ 8,376: Investors bucked the rally after the mart tipped as high as 8,605 intra-‐day, ending slighly below the 8,400 mark. All sectors ended in red except Mining and Oil (+0.60%), while Holdings (-‐2.12%) and Services (-‐2.02%) took the brunt. Among actively traded shares were: SM (-‐P13.00 at P967.00), AC (-‐P29.00 at P1,061.00), ALI (unch. at P44.00), BDO (unch. at P144.00), and URC (-‐P1.00 at P142.00), on 9.79bn turnover. Losers edged out gainers, 77-‐108, with net foreign buying at P620.44mn.
Earnings in focus: Mart could use prior session's run down as a buying window, with focus on 9M17 or Q3 earnings disclosures as they come. Downward pressure might come from some who would opt to cash in on their gains as they reposition their portfolio this week. Immediate support 8,300, resistance 8,475.
Shares mixed: Shares ended mixed on Friday as bourses struggled for direction following a lack of movement from US shares. South Korea and Hong Kong led gains in the region.
Shares gained on jobs growth: US shares gained on Friday as US jobs data for October added the most workers in a year and jobless rate fell to its lowest since 2000 -‐ a rebound from September's slowdown amid hurricanes Harvey and Irma.
Oil prices continue to soar: Crude oil prices continued to climb after Baker Hughes reported that the number of oil rigs in the US fell by 11 rigs, the largest decline in the number of oil rigs this year. West Texas Intermediate (WTI) climbed $1.10 to $55.64/barrel.
AC to export motorcycles to Thailand:
Ayala Corp. (AC) via unit AC Industrial Tech. Holdings, will export 300 KTM motorcycles to Thailand this Dec. Exports to China will start Feb 2018. The firm targets to sell 4k units locally next year, plus export 4k overseas.
BDO escapes sanction on card skimming issue:
No sanctions will be imposed by the Bangko Sentral ng Pilipinas (BSP) on BDO Unibank, Inc. (BDO) following June’s card skimming issue, as the BSP said BDO remains compliant.
MER partners with Mitsubishi on EV charging:
Manila Electric Co. (MER), through wholly-‐owned MSERV, and Mitsubishi Motors Philippines Corp. are teaming up to put up more electric vehicle (EV) charging stations in selected offices of the Department of Trade and Industry (DTI) and Department of Environment and Natural Resources (DENR).
MER cautions of higher electricity rates:
MER cautioned of higher average electricity rates due to rising international fuel prices. 9M17 generation charge was +5% at P4.30/kWh. MER cited: (1) coal/MT at $83.71/MT (+48%); (2) natural gas at $7.11/GJ (+15%); (3) crude prices at $51.09/barrel (+31%).
ICT supports waiving off accreditation fee:
International Container Terminal Services, Inc. (ICT) unit, Subic Bay Int’l Terminal (SBIT), supported the Subic Bay Metropolitan Authority (SBMA)’s termination of $200 accreditation fee for new logistic firms that will transact & conduct business in the freeport zone. SBIT sees increased volumes from the move.
CEB might remove hedging policy:
Cebu Air (CEB) is reviewing its fuel hedging policy, with the possibility of moving completely away from it, taking cue from American and Chinese airlines who did better without it historically. CEB also lost roughly $40mn a few years back on a bad hedge.
PAL to launch direct flights on Dec:
Philippine Airlines, Inc. (PAL) set to launch direct flights from Cebu this Dec. covering Cebu to Siargao, Camiguin, Ozamiz & Legazpi, plus Cebu‐Bangkok (BKK). Cebu-‐Beijing flights will start this month. PAL aims to ferry 16.5-‐17mn pax in 2018 on strong China tourist demand. The target is faster than 2016’s +12%.
ABS & GMA contest TV ratings leadership:
ABS‐CBN Corp. (ABS) and GMA Network contest their leadership in TV ratings, with ABS maintaining leadership in nationwide ratings and GMA in urban households. ABS claims it had an average national audience share of 46% in October vs. GMA’s 33%. On the other hand, GMA said it had a higher average total day audience share of 41.7% in October, vs. ABS’s 38.1%
ANS’s AG&P bags $200mn LNG terminal in India:
Atlantic, Gulf and Pacific Company (AG&P), 27%‐owned by A. Soriano Corporation (ANS), bagged the set-‐up of $200mn liquefied natural gas (LNG) import terminal on India’s Karaikal Port. This sea‐to‐land structure is set for completion mid-2019, and AG&P will secure an initial supply of 1mn tons of LNG per year vs. total capacity of 10mn.
CAL shareholders ask reconsideration on delisting:
Austrian trader Alfred Reiterer, who represents about 14% voting rights for small shareholders of Calata Corp. (CAL), is asking the Exchange (PSE) to reconsider its plan to delist the agricultural products distributor so they could gain control and hire a new management.
BSP assigns lower risk weight for MSMEs:
BSP issued Circular 979, assigning lower risk weight of 20% (from the present 75%) on performing loans to micro small & medium enterprises (MSME) as long as these are guaranteed by a qualified credit surety fund (CSF) cooperative. This should improve credit line to MSMEs. (Note: Overall impact on NPL & provisioning minimal, with MSME share to total lending (net of exclusions), at 7% or P529bn)
NEDA pushes single window approach for businesses:
The National Economic and Development Authority (NEDA) is pushing for the implementation of a single window approach in the processing of business permits to enhance ease doing business in the country.
DOF proposes flat tax for the self-‐employed:
The Department of Finance (DoF) proposed a flat 8% tax on self-‐employed individuals & professionals on gross sales, or schedular personal income tax with allowable deduction. Meanwhile, VAT threshold for this category will also be raised from P1.9mn to P3mn, exempting small businesses with total annual sales of P3mn & below from paying VAT.
SSS reviews possibility of unemployment insurance:
SSS is studying the feasibiity of offering unemployment insurance based on their pending reform act. The plan is to do this via a tie-‐up w/ private insurance firms, on the condition the unemployed has no fault on their own. This is in anticipation of the rising use of AI or artificial intelligence to perform human functions.
SEC fast-‐tracking IOSCO membership:
SEC submitted for congressional approval proposed changes to the Securities Regulation Code (SRC) to fast-‐track its full membership in IOSCO, a global association of securities & futures market regulators. Instead of changing the bank secrecy law however, SEC proposed to look into bank accounts only if there’s an ongoing probe.