Philippines Market Insights 2017.12.18


News Highlights:   : Starting Jan 2018, Maynilad’s  water rate will rise by P0.97/cubic  meter (cu.m.) to P34.51, to cover its CPI adjustment.   This covers 2.8% of the P34.51/cu.m. average basic charge in 2017. Aboitiz Equity Ventures (AEV) plans P40bn-­‐P50bn capex for 2018, P13bn of which will finance the Apo-­‐Agua full renewable energy-­‐powered water treatment project. On the economic front, the Department of Finance (DOF) expects Congress to approve early next year additional provisions to be included in the tax reform bill, which will plug the shortfall in revenues to be generated by the recently ratified tax measure.





Mart retreats post­‐TRAIN passage, PSEi @ 8,337: The rally after the passage of the TRAIN was short-­‐lived  as the market retreated 124 pts. All sectors ended on red, with Mining and Oil (-­3.62%)  and Property  (­‐2.78%)  taking the brunt. Among actively  traded shares were: ALI (­‐P0.90  at P42.40),  SMPH  (­‐P1.80  at P36.00),  SM (­‐P22.50  at P974.50),  AC (­‐ P9.00 at P1,006.00),  and SCC (­‐P1.90  at P35.10), on 10.73bn  turnover.  Losers outpaced gainers, 81‐123, with net foreign selling at P1.10bn.

Mart might recover: Mart might recover from prior session's sell­‐off as inventors could use this opportunity to look for bargains, especially on stocks likely to benefit from the TRAIN  and  the  massive  infrastructure  program.  Immediate  support  8,300,  resistance 8,450.


Asia shares lower: Thursday’s lower close on Wall Street dragged down markets in Asia-­ Pacific on Friday. With doubts on Senate passing the all-­important tax reform bill, global markets were generally lower on Friday morning.


US shares bounced back: US shares gained Friday, primed by consumer staples, after the tax overhaul plan cut corporate taces from 35% to 21%.


Oil prices mixed: Oil prices settled on a mixed note Friday, indicating a third-­ consecutive weekly loss over rising U.S. crude production.  U.S. benchmark crude, however, climbed for the session, buoyed in part by a fall in the weekly U.S. oil-­rig count, which offers a peek at drilling activity. West Texas Intermediate (WTI) rose $0.26 to $57.30/barrel.


MWC’s water rate to rise by P0.97/ cu.m. to P34.51:

Starting  Jan 2018, Maynilad’s  water rate will rise by P0.97/cubic  meter (cu.m.) to P34.51, to cover  its CPI adjustment.    This  covers  2.8%  of the P34.51/cu.m.  average basic charge in 2017. Manila Water Company (MWC) meanwhile, will raise rates by P0.16 to P35.13/cu.m. for foreign currency differential adjustment (FCDA).

AEV allots P40bnP50bn capex for 2018:

Aboitiz Equity Ventures (AEV) plans P40bn­‐P50bn capex for 2018, P13bn of which will finance the Apo­‐ Agua full renewable energy-­‐powered water treatment project.   This will supply 300mn liters:day potable bulk water from Tamugan River to Davao City  Water   District,   with   construction   slated   at  the  start   of  2017   & completion  in 2020.   Also, AEV’s cement plant expansion  is targeted 2018 or  2019,  &  expressed  its  interest  to  join  the  P108.2bn  regional  airport project through its JV firm, Maya Consortium,  with Vinci Airports of France.

MGen in discussion with ESB International to be the operations and management partner:

Meralco Powergen (MGen) is discussing with ESB International, a wholly-­owned firm by the Electricity Supply Board of Ireland, to become its operations & management (O&M) partner for the Atimonan  One  Energy  (A1E)  plant.The  P135bn  project’s  completion  is targeted late 2021, with financing component  at 70%, 30% equity.

CEB renews insurance with Pioneer Insurance:

Cebu Air (CEB) has renewed its insurance cover with Pioneer Insurance.   Pioneer meanwhile, has appointed the UK arm of Marsh, as its reinsurance broker.

MAC’s CPCS declares P85mn cash dividend:

MacroAsia (MAC)’s 40%-­ owned Cebu Pacific Catering Services (CPCS) declared P85mn cash dividend, payable  on 29 Dec. 2017.   The other  owners  are Cathay  Pacific  Catering (40%) & MGO Pacific Resources (20%).  CPCS is the only full service airline catering firm that operates at Mactan-­‐Cebu International Airport.

SLF’s current president will be appointed as EVP:

Sun Life Financial (SLF)’s current  president,  Kevin  Dougherty,  will  be  EVP  for  Innovation  & Partnerships  in the field of digital health solutions,  insurance  research lab, external innovation, data analytics & reinsurance.   Meanwhile, Jacques Goblet will be appointed president of Sun Life Financial Canada.

CHP granted ECC by DENR:

Department of Environment and Natural Resources (DENR) granted the Environmental Compliance Certificate (ECC) of Solid Cement, a unit of Cemex Holdings Philippines (CHP). The ECC covers additional capacity of 1.5mn MT per year.

CGCC will invest P6bn to develop Clark Freeport:

Udenna’s affiliate, Clark Global  City  (CGCC),  will  initially  invest  P6bn  to  develop  177ha.  in  Clark Freeport Zone into a new central business district.  Of the 177ha., 47ha. was developed by previous owner, Global Gateway Development.

Udenna  plans to list Lapu­‐lapu  Leisure  Mactan:  

Udenna  plans  to list its leisure arm, Lapu-­‐Lapu Leisure Mactan, in the future, to finance its $341mn integrated resort & casino venture in Cebu.   This project covers 12.5ha. beach‐front  lot in Mactan Island.  There are plans to engage Enderun as management  partner

PPC   to  increase   authorized   capital   from   P2bn   to  P2.098bn

Pryce Corporation  (PPC)   will   increase   its   authorised   capital   from   P2bn   to P2.098bn,  to cover  the  subscription  of  Josefina  Multi-­‐Ventures  Corp.  of 24.5mn shares at P5/share.

MJIC appoints Evora as new COO:

MJC Investments Corporation (MJIC) appointed Jeffrey Rodrigo L. Evora as its new COO effective 14 Dec. 2017. Evora has over 20 years experience in mega-­resort casino operations in the US & Phils.  He was previously  the Dir. of Gaming Marketing  at RWM prior to his appointment.


Higher FDI & hot money inflows in 2018:

The Bangko Sentral ng Pilipinas (BSP) expects sustained growth in foreign direct investment (FDI) inflows as well as lower outflow of foreign portfolio investments in 2018 on the back of the country’s  strong macroeconomic fundamentals  and the ramp up of infrastructure  investments.  The BSP specifically  eyes FDI inflows inching up 2.5% to $8.2bn in 2018.

Package 1B under TRAIN to be passed 2018:

The Department  of Finance (DOF) expects Congress to approve early next year additional provisions to be included  in the tax reform bill, which will plug the shortfall  in revenues to be generated by the recently ratified tax measure. The Tax Reform for Acceleration and Inclusion (TRAIN) Act has been divided by the Congress into  package  1A  and  1B,  the  latter  of  which  will  be  discussed  in  1Q18. Package 1A constitutes the measures ratified by both chambers of Congress,   while  the  remaining   Package   1B  involves   the  proposed   tax amnesty program, adjustments in the Motor Vehicle Users Charge, and amendments  to the Bank Secrecy Law.

PSE buoyant to SEC for Pdex merger:

The Exchange is hoping that the SEC will finally allow it to merge with the fixed income bourse by the 1Q18, or even before the end of 2017. PSE’s compliance with the 20% ownership cap is   one   of   the   conditions    imposed   by   the   Securities   and   Exchange Commission  before allowing it to acquire PDS Holdings Corporation  and its merger with the Philippine Dealing and Exchange Corporation, the country’s fixed income bourse.

Mining industry will adopt Canadian practices:

The Chamber of Mines of the Philippines  and its members tomorrow  will ink an agreement  with the Mining Association of Canada.

ADB raises funds for its microfinance guarantee:

Asian Development Bank (ADB) has raised the funding for its microfinance guarantee and risk-­‐sharing program by an additional $100 million. Under the program, ADB selects partner finance institutions that provide wholesale local currency loans to ADB-­‐approved MFIs. ADB then assumes up to 50 percent of the default risk arising under loans made by these financial institutions to MFIs, having a maximum tenor of three years.









Philippines Market Insights 2017.12.14


Philippines Market Insights 2017.12.19