News Highlights: Emperador Inc. (EMP) posted a net income of P7.7bn in 2016, 11% higher from the P7bn recorded in 2015, while Golden Haven Memorial Park, Inc. (HVN) reported a net income of P180mn for full year 2016. Meanwhile, forecast from the Bangko Sentral ng Pilipinas (BSP) shows that headline inflation could settle between 3% and 3.8% for the month of March mainly due to the higher electricity rates.
Dampened sentiment over US healthcare news: With no local leads to spur market growth, local marts ended on a bearish note on Monday. Moreover, foreign outflows was imminent amid uncertainties as to whether US President Trump can back up his policies for reform through Congress. PSEi closed 23 points lower to 7,245 (-0.33% day-on-day), with sectors ended mixed. Actively-traded shares were: MBT (+P2.40 at P75.05); ALI (-P0.50 at P34); and MPI (-P0.01 at P6.02). Turnover reached P7.7bn, with losers-gainers, 90-81. Net foreign selling stood at P523mn.
Global issues sway local sentiment: Market might still end on weak tone, as investors continued to feed on global issues with the lack of local leads stirring up any market movement. Meantime, investors would opt to take a defensive stance as they wait on any global indications from UK’s plan to ‘trigger’ Article 50 to the EU this week. Immediate support is 7,200, resistance at 7,300.
Marts jittered over healthcare repeal: Regional markets ended bearish after its disappointment on US Pres. Trump’s first policy initiative on repealing and replacing Obamacare. Japan’s Nikkei led decliners (-1.44%), followed by Hong Kong (Hang Seng, -0.68%) and South Korea (KOSPI, -0.61%).
US stocks still ended lower: Equities continued its losing streak as investors reassessed Pres. Trump’s ability to push bills through Congress after their proposal to repeal and replace the healthcare act failed to secure enough votes last week.
Rising oil rig may undermine OPEC’s efforts: Oil finished lower as rising US oil rig count continued to hamper OPEC’s efforts to resolve the global supply glut. It raises concerns over whether they can stick to their output agreement if it would extend until 2H17. West Texas Intermediate (WTI) slipped $0.24 to $47.73/barrel.
EMP profit reached P7.7bn in 2016:
Emperador Inc. (EMP) posted a net income of P7.7bn in 2016, 11% higher from the P7bn recorded in 2015. Brandy and whiskey labels contributed P41bn in revenues, -6% lower from 2015. For 4Q16, EMP recorded P2.8bn in earnings, a 23% jump compared to 4Q15. The acquisition of Bodegas Fundador and Whyte & Mackay through its subsidiary Emperador Distillers Inc. makes EMP the world's largest brandy company.
HVN’s 2016 profit, up 19%:
Golden Haven Memorial Park, Inc. (HVN) reported a net income of P180mn for full year 2016. This was 19% higher YoY. Real estate sales rose 19% to P772mn driven by columbarium vaults and memorial lots. Recall that early this month, HVN unveiled its maiden memorial chapel and crematorium facility.
PSPC nets $6.42mn in 2016:
Phoenix Semiconductor Philippines Corp. (PSPC) reported $6.42mn in income after taxes for 2016, 52% drop from the $13.46mn recorded in 2015. The global slowdown of semiconductor industry in 2016 attributed to lower income and revenues of PSPC. Revenues were at $171.82mn, 18.4% lower from 2015. Also, PSPC migrated to the production of DDR4 technology, from the previous DDR3 which accounted for the lower production volumes registered in 2016. Outlook for 2017 has significantly improved with the commencement of the 18,000sqm Phase 2 expansion project.
Conglomerates see potential in logistics:
Conglomerates are optimistic on the potential of less regulated logistics industries. Metro Pacific Investments Corp. (MPI) recently made investments in logistics through MetroPac Movers Inc. (MMI) with the acquisition of Basic Logistics Inc. and Ace Logistics Inc. for a combined price of P2.48bn. Also, Dennis Uy of Phoenix Petroleum (PNX) has forayed into logistics through his minority stake in 2GO Group, Inc. (2GO). Conglomerates prefer adding logistics business into their portfolio as it is less regulated compared to other industries.
MPI discloses agreement with QC:
Metro Pacific Investments Corporation (MPI) announced that its consortium has been granted Original Proponent Status by the local government of Quezon City to design, construct, finance, and operate an Integrated Solid Waste Management facility. The facility would be capable to process and convert up to 3,000 metric tons per day of the city’s municipal solid waste into 42MWe of renewable energy, enough to power 60,000-90,000 households. If the consortium gets awarded for the project, development and construction would take 3-4 years. The said project would be funded via combination of debt and equity.
EDC announced tender offer for Noteholders:
Energy Development Corporation (EDC) issued an invitation to the Noteholders of its $300mn notes due 2021 to tender Notes up to an aggregate principal amount of $100mn for purchase by EDC for cash. The Notes are listed on the Singapore Exchange Securities Trading Ltd. (SGX-ST). The move would enable EDC to better anage its currency risks and optimize its debt maturity profile. EDC has yet to announce whether it will accept valid tenders of Notes pursuant to the Offer and, if so accepted, the final aggregate nominal amount of Notes accepted for purchase and the final aggregate nominal amount of Notes which remain outstanding as soon as reasonably practicable on or around 5 April. The announcement will also specify the expected Settlement Date.
March inflation seen at 3% to 3.8%:
Forecast from the Bangko Sentral ng Pilipinas (BSP) shows that headline inflation could settle between 3% and 3.8% for the month of March mainly due to the higher electricity rates. However, lower fuel and food prices could provide downward price pressures. BSP forecasts inflation for 2017 at 3.4%, within the 2% to 4% target of the central bank. The inflation data for March will be released on 05 April.
BoC missed February collection target:
The Bureau of Customs (BoC) collected P30.76bn in February, 13.8% higher YoY. However, BoC failed to deliver its target collection of P33.41bn. Lower collections is cyclical on February as a result of the lower imports from China, following the Chinese New Year.