Philippines Market Insights 2017.3.1


News Highlights: Energy Development Corporation (EDC) posted consolidated revenues of P34.2bn and recurring net income attributable to equity holders of P9.2bn for 2016.Arthaland Corp. (ALCO) has purchased two parcels of land within Arca South, the mixed-use development of Ayala Land, Inc. (ALI) in Taguig City, for P1.05bn. Meanwhile, data from the Bangko Sentral ng Pilipinas (BSP) showed that domestic liquidity (M3) reached P9.4tn (+12.4% YoY) in January 2017.





Mart declined ahead of Trump’s speech: Local mart pared early losses, ending the day lower by 20 points at 7,212 (-0.28% day-on-day). PSEi fell amid risk aversion ahead of US President Donald Trump’s speech in Congress. Most of the sectors ended in red, primed by financials (-1.33%) and industrial (-0.90%). Among activelytraded shares were: MPI (-P0.05 at P6.80); ALI (-P0.70 at P35.30); and URC (-P2.50 at P160.00), on P8.0 turnover. Market breadth was negative at 116-62, with net foreign selling at P771.07mn.

To take cue from US Pres. Trump’s speech: Mart is expected to take cue from US President Donald Trump’s speech later at 10am. Any concrete details on the tax reform package, fiscal spending, and other plans that could prop up the US economy and could help sustain the recent market rally is expected to bolster investors’ sentiment. Immediate support at 7,150, resistance 7,260.


Bourses mixed in anticipation of Trump’s speech: Marts ended mixed as investors wait on the sidelines ahead of US President Donald Trump’s speech in Congress.


Equities down amid cautiousness: Shares finished lower as investors remained cautious ahead of President Donald Trump’s speech in Congress.


Crude fell on higher crude inventories: Oil prices closed lower after American Petroleum Institute (API) reported an increase of 2.5mn barrels last week. West Texas Intermediate (WTI) for April fell $0.04 to settle at $54.01/barrel.


consolidated revenues of P34.2bn and recurring net income attributable to equity holders of P9.2bn for 2016. The 4% growth in RNIA was on top of improved performance and lower operating expenses of the Negros Island and First Gen hydro business. EDC continues its efforts on the asset reliability program as it targets to finish the retrofitting of the Tongonan power plant and other generating units in Leyte.

ALCO buys land in ALI’s Arca South: Arthaland Corp. (ALCO) has purchased two parcels of land within Arca South, the mixed-use development of Ayala Land, Inc. (ALI) in Taguig City, for P1.05bn. This is done through ALCO’s newly incorporated subsidiary Savya Land Development Corp. ALCO has set a total capex of about P30bn until year 2022, P20bn of which is for the development of properties in Cebu, Taguig, Laguna, Makati and south of Manila, P6bn for land acquisitions and P4bn for three unannounced projects. It plans to expand its portfolio of office and residential projects to 520,000 sqm GFA from 110,000 sqm over six years.

ICT subsidiary in Oregon to terminate lease agreement: ICTSI Oregon, Inc., wholly-owned subsidiary of International Container Services, Inc. will terminate its 25-year lease agreement with the Port of Portland's Terminal 6. The effective date for the termination of lease will be on 31 March 2017 upon approval of the Port Commission. In return, the Port will receive $11.45mn in compensation to revuild businesses and additional container
handling equipment.

PX reported core income +83% at P1.66bn: Philex Mining (PX) recorded 83% increase in net income for 2016 at P1.66bn, with revenues improving 12% at P10.27bn. The stellar performance was attributed to better copper output (73,107 DMT), higher metal prices and favorable exchange rates (P47.80/US$1 vs. P45.31/US$1). Breaking down the revenues, copper contributed P3.98bn (+15%), while gold accounted for P6.21bn (+10%).
PXP slightly lower loss at P36.4mn, and hopes to resume discussion on exploration project: PXP Energy Corp. (PXP) reported its consolidated net loss for 2016 at P36.4mn, lower than its 2015 loss of P144mn. This was attributable to the 75.7% reduction in overhead cost, recovery of impairment loss and net of lower petroleum revenues contributed  by subsidiary, Forum Energy Ltd. Meanwhile, PXP chair Manuel V. Pangilinan expressed its intent to resume discussions between Forum Energy Ltd. and China National Offshore Oil Corp. (CNOOC) over the joint exploration of an area in the West Philippine Sea for potential natural gas reserves.

SHLPH doubled net income in 2016 at P7.4bn: Pilipinas Shell doubled its net income for 2016 at P7.4bn versus 2015’s P3.6bn on the back of increased premium fuel penetration (27% vs. 23%), strong retail volume growth (+4%), successful marketing campaigns and logistics cost savings. These drivers helped offset the impact of lower commercial sales and extended refinery downtime in Q4.

PSPC signed contracts for Phase 2 expansion: Phoenix Semiconductor (PSPC) officially signed a contract with Welcron Hantec Phils. (WHP) for the construction works and services for the Phase 2 Main Process Building, power utility building, and an over bridge structure. Under this contract, PSPC shall pay the lump-sum contract fee of KRW 1.90bn (US$1.67mn). PSPC also signed a contract with the parent company of WHP, Welcron Hantec Co. (WHC) for the supply of the construction equipment and materials in connection with the construction of the Phase 2 expansion project. In addition to these two contracts, PSPC signed a purchase agreement with WHC for the supply of the water demineralization and waste water treatment systems for the Phase 2 production facility.

BLFI reported P570mn net income for 2016: BDO leasing & Finance, Inc. (BLFI) posted a net income of P570mn, 2.5% higher from the P556mn recorded in 2015, on the back of steady growth in business volumes. Gross revenue was 10% higher at P2.9bn, while net lease and loan portfolio stood at P31bn.


M3 increased by 12% to P9.4tn in Jan 2017: Data from the Bangko Sentral ng Pilipinas (BSP) showed that domestic liquidity (M3) reached P9.4tn (+12.4% YoY) in January 2017. The demand for credit is still the principal driver of money supply growth, especially in the private sector. Bank loans expanded as well coming from the strong lending activity on the sectors of property,wholesale and retail trade, automotive, financial and  insurance, electricity, among others. The growth in M3 is in line with the BSP's outlook for inflation.

ADB to commit $4.22bn for infra dev't: The Asian Development Bank (ADB) will commit $4.22bn to the Philippines for infrastructure development and technical assistance. ADB's country operations and business plan (COBP) will focus on the areas of sustainable and climateresilient infrastructure, good governance and finances, inclusive employment and education, and regional integration. ADB has recommended to develop the capital markets which can help turn the Asia Pacific region's savings into productive infra investment.

SSS revenues reached P160bn as of end-Nov 2016: Social Security System (SSS) reported P160bn in revenues during the first eleven months of 2016, 8.3% higher from the same period in 2015. Revenues inched upwards due to higher contributions from its members at P131.28bn and the appreciation of investments at P28.74bn. Meanwhile, the pension fund's expenditures for retirement reached P72.56bn, death at P36.21bn lastly, disability at P4.17bn. Assets of SSS stood at P473bn, liabilities were at P13.54bn and with its reserves at P460.09bn.









Philippines Market Insights 2017.2.27


Philippines Market Insights 2017.3.3