Philippines Market Insights 2017.2.13


News Highlights: San Miguel Corp. (SMC) will issue its P20bn fixed rate bonds on a later date of 28 Feb, from initial 02 Feb. Semirara and Mining Power Corp. (SCC) is expecting to increase production by 10% following the expansion of its Antique mine site. Meanwhile, Global bank Deutsche Bank might see credit revisions for the Philippine economy.





Mart took profits, PSEi @7,235: Market opted to profit-take amid lack of catalysts. PSEi lost 17 points at 7,235 (-0.24% day-on-day), with sectors ending mixed. Among actively traded shares were: BPI (+P0.70 at P93); MBT (+P0.30 at P77.30); and CHP (-P1.08 at P10.10). Turnover reached P7.2bn, with market favoring bears, 114-81. Net foreign outflows registered at P166mn.

Mart on the sidelines: With no market catalysts to spur prices to trade higher, we might expect the market to trade sideways today as investors are keen to wait upon local and global headlines for cues on market direction. Moreover, investors might gauge 2017 expectations on the full year’s corporate results, with more firms set to report in the coming weeks. Trade cautiously and within range, for now. Immediate support, 7,200, resistance at 7,300.


Mart spillover gains: Most bourses got spillover from Wall Street gains on Friday, taking into account positive expectations from US President Trump’s pronouncements on tax reform measures.


Trump policies fuel market: Political remarks from US President Trump continued to fuel market's momentum to close in record highs. Meanwhile, company earnings results might also drive the sentiment for US equities.


Crude up on better forecast: Crude futures managed to eke out gains as the International Energy Agency (IEA) upgraded its 2017 forecast for demand growth to 1.4mn barrels a day, from the previous 1.3mn barrels. This was on account of OPEC's compliance on curbing output production, despite some notable increases in US production. West Texas Intermediate gained $0.86 to $53.86/barrel.


SMC to defer P20bn bond issuance: San Miguel Corp. (SMC) will issue its P20bn fixed rate bonds on a later date of 28 Feb, from initial 02 Feb. The conglomerate has moved its offer date to 14-20 Feb instead of 13-17 Feb. The SEC has already approved the bond offer of the initial tranche of P60bn program under its shelf registration facility. Proceeds from the offer will be used to refinance existing dollar denominated loans from various banks.

SCC increase output by 10% for 2017: Semirara and Mining Power Corp. (SCC) is expecting to increase production by 10% following the expansion of its Antique mine site. Coal production is expected to reach 13mn MT, but would be dependent on favorable weather conditions.

PSE to delist UW: The Phil. Stock Exchange (PSE) had initiated involuntary delisting proceedings against Uniwide Holdings (UW) due to its defunct dissolution and persistent violation of disclosure rules. PSE said that UW failed to submit annual reports from 2013-2015 as well as Q1-Q3 reports for the years ended 2014-2016 and also failed to submit on time the reports on the shareholder numbers in 2014 and 2015, foreign ownership in 2014 and 2015, and others.

WAV eyes P2.7bn IPO by March: AudioWav Media (WAV) plans to pursue its P2.66bn initial public offering (IPO) by March this year, with 900mn shares to offer between P1.77 and P2.96 per share. The proceeds would be used for its regional expansion plan, particularly in China, Indonesia, Thailand, and Vietnam.


PH might get credit revisions --Deutsche Bank: Global bank Deutsche Bank might see credit revisions for the Philippine economy. The bank based its forecast from the manufacturing PMI, where it dropped to 52.7 in Jan., the slowest in 13 months. Deutsche Bank also hinted of a slower pace of growth in 2017, but presented an upside on consumer spending on the back of pension hike for the Social Security System (SSS) beneficiaries.

FDI reached $7bn as of end-Nov: The Bangko Sentral ng Pilipinas (BSP) reported $756mn in foreign direct investments (FDI) in Nov 2016, 59.4% higher than the $474mn recorded in Nov 2015. For the Nov inflows, the bulk was in the form of debt instruments, comprising of $544mn. Most of the foreign inflows came from Hong Kong, United States and Taiwan, among others. FDI increased by 25.4% on a YoY basis to $7bn mainly due to the confidence of investors in our macroeconomic fundamentals and growth potential.

Trade deficit widened to $24.9bn: The gap between net exports and net imports doubled for FY2016. Trade deficit reached $24.93bn for 2016, 104% higher from the $12.24bn recorded in 2015. Net exports for 2016 dropped 4% to $56.2bn, while net imports stood at $81.2bn, 14% higher for the year. Imports expanded faster mainly due to the larger demand for capital and consumer goods, also in raw materials.

EO no. 13 signed to strengthen fight against illegal gambling: Pres. Duterte signed executive order (EO) no. 13 in a bid to strengthen the government’s fight against illegal gambling, ordering various law enforcement agencies like Phil. National Police (PNP), National Bureau of Investigation (NBI), the Department of Justice (DoJ), among others to intensify the fight. This also mandated the Phil. Amusement and Gaming (Pagcor), Cagayan Economic Zone Authority (Ceza), Authority of the Freeport Area of Bataan (Afab), Aurora Pacific Economic Zone and Freeport (Apeco) and other entities to submit a report on the progress of their fight against illegal gambling within 6 months and every 6 months thereafter.

15 business groups supports tax reform bill: 15 foreign and local business groups, specifically from the Phil. Business Groups-Joint Foreign Chambers (PBG-JFC) expressed support for the Department of Finance’s proposed tax reform bill, believing that the comprehensive tax reform program and other economic reform measures are in line with the 10-point socioeconomic agenda of the current administration. Among the 15 business groups were: Alyansa Agrikultura, American Chamber of Commerce of the Phils., Australia-New Zealand Chamber of Commerce.









Philippines Market Insights 2017.2.9


Philippines Market Insights 2017.2.17