Philippines Market Insights 2017.3.7

フィリピン株式ニュースハイライト

News Highlights: The Energy Regulatory Commission (ERC) trimmed Manila Electric’s (MER) planned power rate adjustment as a result of the Malampaya maintenance shutdown. Meanwhile, PLDT (TEL) unit, Smart Communications has complied with the listing obligation in relation to its legislative franchise renewal. On the economic front, The central bank (BSP) is confident that the country’s current monetary policy remains appropriate, stating that the market may have already priced in the March Fed move.

マーケットモニター

各国市場モニター

フィリピン株式市場動向

PHILIPPINES

Mart shrugged off Fed worries: Local equities seemed to shrug off its concerns from the hawkish comments from Fed Reserve members on a March rate hike. PSEi gained 66 points to 7,313 (+0.92% day-on-day), with all sectors in positive territory, saved for industrial (-0.16%). Among actively-traded shares were: ALI (+P0.20 at P36); MBT (-P0.30 at P81.20); PGOLD (-P0.45 at P45.05), on P7.6bn turnover. Market favored bulls, 107-75, on net inflows of P760mn.

Might be into correction, with TEL earnings on a side note: Local market might be in for some correction as we lack strong catalysts to push prices higher. On a side note, investors would likely take cues from PLDT, Inc. (TEL) earnings announcement for any indications or prospects for the year. Sentiments from TEL’s earnings might also be evident on the latter part of the day, with TEL having 4.59% weighting on the index composition. Immediate support 7,230, resistance 7,340.

ASIA

Marts mostly up: The regional markets merely brushed aside the news of North Korea’s missile test launches, to end the day slightly higher as most focused on local factors to drive market sentiment. Japan was among the pool of decliners after reports that some of the missiles fell within Japan’s Exclusive Economic Zone.

WALL STREET

US markets lose steam: Equities closed lower as the market refocused its attention to geopolitical tensions, following North Korea, which tested its 4 ballistic missiles off its east coast on an early Monday (Seoul time). Investors opted to take profits as the market reached record highs for the past months. With most of the proposed policies by the current administration factored into the market, investors are now delving into which of these proposals could really drive economic growth.

COMMODITIES

Oil down: Crude prices declined as signs of further growth in US shale production and a likely interest rate increase added to investors’ worries over the supply glut. Moreover, news of China’s downbeat GDP forecast also raised concern in terms of demand. April West Texas Intermediate fell $0.13 to $53.20/barrel.

フィリピン国内各企業動向

ERC trims power rate adjustment of MER: The Energy Regulatory Commission (ERC) trimmed Manila Electric’s (MER) planned power rate adjustment as a result of the Malampaya maintenance shutdown. ERC approved a fuel cost recovery of P0.66/kWh translating to P1.7bn, lower than the proposed P0.92/kWh or P2.4bn. Moreover, the implementation of the fuel cost recovery to 3-month installments was approved, equivalent to P0.2211/kWh for March, April and May.

TEL’s unit, Smart complied with listing obligation: PLDT (TEL) unit, Smart Communications has complied with the listing obligation in relation to its legislative franchise renewal. In a disclosure, TEL said that Smart has complied when TEL acquired 100% of Smart in March 2000. As such, Smart is effectively owned by TEL shareholders. To recap, The Senate required Smart must undertake a public offering of 30% of its authorized capital stock, unless the grantee is wholly owned by a publicly listed company.

SMPH to raise P20bn via bond issue: SM Prime Holdings (SMPH) is planning to raise P20bn in April through bond issuance (P15bn with an oversubscription option of P5bn), the second tranche of its P60bn shelf offering. The proceeds will be used to help cover its P55bn capex budget. Philippine Rating Services Corp. (PhilRatings) assigned the highest rating of ‘PRS Aaa’ with a ‘stable’ outlook on the proposed debt papers. Recall that in July 2016, SMPH listed the first tranche worth P10bn.
SMC to revive Laiban Dam project: San Miguel Corporation (SMC) is still interested in Laiban Dam in Tanay, Rizal, however, they are still waiting for the government to act on it. SMC's proposal would entail a joint venture with MWSS under the public-private partnership scheme. The project would include dam construction and headworks, water treatment plant, pumping stations and storage facilities among others.

ICT to spend $80mn for Manila terminal expansion: International Container Terminal Services, Inc. (ICT) will allot $80mn for the expansion of its Manila International Container Terminal (MICT). ICT will purchase five post-Panamax quay cranes, twenty rubber tired gantry cranes and construct new berth. Currently, the MICT has six berths, and the new equipment could increase MICT's capacity by 13,000 twenty-foot equivalent units (TEUs), which could propel MICT's annual capacity to 2.75mn TEUs.

ATI recorded 18% growth in Batangas terminal: Asian Terminals, Inc. (ATI) improved its operations for its Batangas Container Terminal. ATI posted 18% growth to 160,000 TEUs due to its higher foreign container throughput. Also, the Batangas terminal paced at a very efficient level of 29 gross moves per crane per hour (gmph). ATI is looking towards an aggressive expansion for 2018 by adding four quay cranes, eight rubber-tired gantry cranes and an extended quay of 600m.

フィリピン経済指標

BSP firm on current monetary policy: The central bank (BSP) is confident that the country’s current monetary policy remains appropriate, stating that the market may have already priced in the March Fed move. BSP added that it will take into consideration latest and expected developments in its assessment and will remain data dependent. BSP will hold its meeting on 23 March.

PCC deepens probe on cement industry: The Philippine Competition Commission (PCC) is set to deepen its investigation of alleged violations of competitive practices in the local cement industry as it found reasonable grounds for possible violations of Section 14 and 15 of the Phil. Competition Act (PCA). This is in response to the affidavit-complaint filed by Victorio Dimagiba, President of Laban Konsyumer, which states that the Cement Manufacturers Association of the Phils. (CeMAP) violated the provisions of PCA by engaging in anti-competitive agreements.

Palace gives green light to 2017 IPP: President Duterte approved the 2017 Investment Priorities Plan (IPP), under Memorandum Order No. 12, all gov't agencies are required to regulate the implementation of IPP to sustain inclusive growth and generate more jobs. The Board of Investments (BoI) chairman shall submit an annual report to the President regarding the accomplishments of the IPP. The IPP will focus on activities such as agri-processing, infra and logistics, innovations services and environment related projects.

Approval of personal income tax alone could be costly – DoF: The Department of Finance (DoF) said that the approval by Congress of reducing personal income tax alone without the corresponding tax enhancing measures could cost the government P30bn in additional borrowing costs annually and may lead to huge deficits for the government.

DENR Sec. Gina Lopez faces graft charges: Department of Environment and Natural Resources (DENR) Secretary Gina Lopez is facing graft charges for allegedly covering the anomalous project worth P1bn. The case has been filed in the Office of the Ombudsman regarding the substandard, overpriced and nonworking air monitor. Leo Jasareno, and DENR officials Jean Rosete and Teresita Peralta were also among the accused. The said case could be a ground for the cancellation of Lopez's confirmation by the Commission on Appointments.

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