Philippines Market Insights 2017.3.23



News Highlights: San Miguel Corp. (SMC) is looking to reduce its water consumption by as much as 50% across its businesses by 2025. Meanwhile, BDO Unibank, Inc. (BDO) opened its 1,000th branch in Buhangin, one of the most populated areas in Davao City last 20 March.





Mart slid following Wall Street’s drop, PSEi @7,254: Local mart mirrored Wall Street’s decline as the latter failed appease investors on anxiety over their health care vote. PSEi closed 68 points lower at 7,254 (-0.93% day-on-day), with all sectors taking losses. Among actively-traded shares were: ALI (-P0.45 at P35.55), MPI (-P0.20 at P6.00), and SMPH (unch. at P28.50), on P7.73bn turnover. Losers decimated gainers at 127-57. Net foreign selling reached P958.84mn.

BSP and global events in focus: We might see our local bourse trading sideways as investors await for further development in the Monetary Board’s (MB) policy meeting today; however, forecasts favor the BSP keeping its policy rate steady at 3%. The terrorist attack in London which happened overnight and the upcoming Republican health care vote in the US Congress might also keep investors on the sidelines. Immediate support at 7,210, resistance 7,300.


Marts down following Wall Street selloff: Bourses in the region traded lower following Wall Street’s biggest drop in 2017. Nikkei declined the most as yen strengthens against the dollar.


Equities rebound ahead of health-care vote: Shares rebound coming from the worst decline since the start of 2017. S&P 500 and Nasdaq inched higher a day before the Congress is set to vote for the Republican health-care bill.


Crude dipped further on rising US stockpiles: Oil prices continued its descent as US Energy Information Administration (EIA) reported that US stockpiles ballooned to 533.1mn barrels last week. West Texas Intermediate declined by $0.20 to settle at $48.04/barrel.


SMC to reduce water use by 50%: San Miguel Corp. (SMC) is looking to reduce its water consumption by as much as 50% across its businesses by 2025. SMC will roll out an integrated water management system, where water from ground sources will be minimized and rainwater will be harvested.

BDO opens 1,000th branch in Davao: BDO Unibank, Inc. (BDO) opened its 1,000th branch in Buhangin, one of the most populated areas in Davao City last 20 March. BDO’s milestone reaffirmed its commitment to make banking reachable to Filipinos whether they are in the metro or far flung areas. For the year, BDO plans to add 60 more branches, which would increase its network to 1,042 by year-end.

DMC’s infra unit bags P9bn worth of projects YTD: D.M. Consunji, Inc., a 100%-owned subsidiary of DMCI Holdings, Inc. (DMC), has secured new contracts for tollway, power and water projects worth P9bn since January 2017. Earlier this month, the Company got a P7.2b worth of contract from MPI’s (Metro Pacific Investments) MPCALA Holdings to build the 18-km Laguna portion of the Cavite-Laguna Expressway project, which is expected to be completed in 2.5 years. Recall that in January, D.M. Consunji was also awarded with P1.3bn contract for portions of the Tarlac-Pangasinan-La Union Expressway.

ALI teams up with Uber in newest mall: Ayala Land’s (ALI) newest community mall, Ayala Malls The 30th, teamed up with Uber for additional means of transportation via uberHOP service. With the uberHOP service, shoppers can easily get to and from Ayala Malls The 30th and other central business districts like Makati and Bonifacio Global City for a flat fare of P70.

Enough water supply in dry months – MWC: Manila Water (MWC) assured its East Zone customers that there will be enough supply in the summer months. Angat Dam, the main source of water supply in Metro Manila and surrounding provinces, is seen to have its water level at 204m, higher by 6m a year ago. Looking at this indication, MWC’s outlook for the summer will be better. Meanwhile, the current allocation for MWC is 46 cubic meters per second.

RLC formalizes lease agreement with APEX: Robinsons Land Corporation (RLC) has signed a lease agreement with APEX for its upcoming office building called Zeta Tower, a 20-storey green building located within its mixed-use complex Bridgetowne along C-5 Road, Ugong Norte, Quezon City. APEX is a leading facilities management, serviced office and fit-out service provider in the Philippines.

PHEN books P1.4bn net income for 2016: Phinma Energy (PHEN) posted a 53% increase in its 2016 net income to P1.4bn brought by the addition of its new power plants’ commercial operations. Electricity sales climbed to 2,947GWh, 33% higher, while revenue from the sale of electricity was up 15% to P15.5bn. This year, PHEN is looking forward to higher capacity from the commercial operation of power barge 103 and the second line expansion of 12MW of Maibara Geothermal by 2H17.

MBT to establish MTN Programme: Metropolitan Bank & Trust (MBT)’s board approved the establishment of a Medium Term Note Programme in the total amount of up to US$2bn or its equivalent in other currencies. This is to be established to afford MBT’s maximum flexibility in accessing markets and maximizing opportunities to raise funding.

MG acquires stake in Phil. Hotel 101 and Vietnamese seafood: Millennium Global Holdings (MG)’s board approved the acquisition of 49% stake in Philippine 101 Hotel, Inc. and 49% stake in a Vietnamese seafood company after MG’s Chair and President, Yang Chi Jen, infused capital by subscribing to 365,785,000 unissued shares of the company at P0.20/share for a total of P73.16bn. This represents a 34% discount to MG’s closing price at P0.305 on 22 March.

D.M. Wenceslao rules out stock market debut: D.M. Wenceslao & Associates, Inc., a property and construction firm, deferred its plans to debut in the local market this year after it raised P4bn via bank borrowings to finance its development of an emerging central business district in Metro Manila. Late last year, the firm also said that it would evaluate the effect of the anti-outsourcing policies of US President Donald Trump on the expansion of business process outsourcing (BPO) sector.


Term deposits undersubscribed: The term deposit facility (TDF) of the Bangko Sentral ng Pilipinas (BSP) were undersubscribed as the P180bn offering only received P179.95bn tenders. The 28-day term deposits (TDs) fetched P140.76bn tenders, below its P150bn offering. The 7-day TDs fetched P39.19bn for the P30bn offering. Rates for the 28-day TDs had a lower yield of 3.3028%, from the 3.3249% set in the previous week. Yields for the 7-day TDs settled at 2.9896% from last week's 2.9823%.

SEC warns public from investing in South Korea-based firm: SEC issued an advisory warning against South Korea-based firm, BrainMax Holdings and Trading, Inc., as it is allegedly engaged in fraudulent investment activities in the Philippines. Brainmax Holdings is not authorized to solicit investments from the public as it has not secured the necessary license or permit from the SEC as required under Sec. 8 of the Securities Regulation Code (SRC). Furthermore, the authorized purposes of the firm do not include investment-taking activities.

SEC suspends 84 lending firms: SEC suspended 84 lending companies on the back of its crackdown on ‘5-6’ money lenders. This was in line with the current administration’s stance against the proliferation of ‘5-6’ money lenders that charges exorbitant interest rates on loans extended to borrowers. In its advisory, SEC suspended the certificates of registration of 66 lending corporations and 18 lending partnerships. Suspended firms were All State Loans Corp., Cambridge Credit Corp., First Binondo Credit Corp., Uni-Loans Lending Co., among others.









Philippines Market Insights 2017.3.22


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