Philippines Market Insights 2017.5.23



News Highlights: PLDT (TEL) unit, SPi Global is set to be acquired by Partners Group, the global private markets investment manager with over Euro 54bn in assets under management, while ssGT Capital (GTCAP) is keen to increase stake in Metro Pacific Investments (MPI) infrastructure unit as it scouts for other new businesses outside the group.





Upbeat sentiment lifts PH shares, PSEi @7,806: Local equities ended the Monday higher as investors heeded for trading opportunities after prior week’s dips. PSEi climbed 38 points at 7,806 (+0.50% day-on-day), with all sectors in green, saved for mining/oil (-0.05%). Among actively-traded shares were: ALI (+P0.70 at P38.10); MEG (+P0.11 at P4.35); and MBT (+P1 at P90). Turnover reached P12bn, including a block sale from PNX @P12 worth P3.2bn. Market favored bears, 96-92, while net foreign inflows were recorded at P268mn.
Mart to continue positive momentum: Market might continue with its upbeat sentiment, with spillover gains from US overnight performance. Market might also re-test its strength to stay above 7,800 level as it scouts for good entry points. Take advantage of the dips, and be on the lookout for beaten-down stocks with good fundamentals. Immediate support, 7,750, resistance at 7,850.


Markets up after US political worries: Most marts ended positively as worries over US President Trump eased as he travels in the Middle East and Europe. Hong Kong index led gainers on Monday as investors sought for opportunities after a swirl of political news surrounded the White House last week.


Equities recover: US equities climbed, starting to recover its prior week’s losses. As the bulk of the earnings already been accounted for, focus would now be more on the political news that could trigger any market movement, moving forward.


Optimism sustained: Oil futures continued its winning streak in anticipation of OPEC members agreeing for an extension on the output cut agreement. Major oil producers are set to discuss the extension this week in Vienna. West Texas Intermediate (WTI) for June delivery expired at $50.73/barrel (+$0.40 or +0.8%), while July delivery settled $0.46 higher at $51.13/barrel.


TEL's SPI to be acquired by Partners Group:

PLDT (TEL) unit, SPi Global is set to be acquired by Partners Group, the global private markets investment manager with over Euro 54bn in assets under management. SPi is being acquired from companies controlled by CVC Capital Partners Asia and PLDT Global Investments, with a transaction value of $330mn.

GTCAP eyes raising interest on MPI infra unit:

GT Capital (GTCAP) is keen to increase stake in Metro Pacific Investments (MPI) infrastructure unit as it scouts for other new businesses outside the group. The firm added that after raising GTCAP’s interest in Metrobank (MBT) and infusing fresh equity into Toyota Financial Services, there would likely be no more acquisitions involving other Ty group member firms.

GTCAP's unit Toyota allots P3.8bn for 2017 capex:

GT Capital (GTCAP) unit, Toyota Motor Philippines (TMP) has earmarked P3.8bn for capital expenditures this year. The amount will be used for model upgrades and logistics expansion.

SMC chief offers jet to Pres. Duterte:

San Miguel (SMC) chief Ramon Ang offered to buy Pres. Duterte a Gulfstream jet, worth $21mn-$65mn, upon learning that the president still takes commercial flights on his travels. The President, however, declined the offer, and suggested to use the money to buy land and houses for the people. The foundation, Biyaya ng Pagbabago Housing Project, he suggested, was put up by his late mother.

PNX eyes to buy Enderun:

Phoenix Petroleum (PNX) plans to acquire Enderun Colleges Inc., potentially gaining foothold in education sector. Reports say that PNX chief Dennis Uy gave an attractive offer to buy the existing shareholders’ shares. Enderun offers 4-year bachelor’s degrees in International Hospitality Management, with majors in hotel administration and culinary arts and business management. It also offers short courses and certificate programs in baking, pastry and culinary foundation, customized hospitality and language classes.

Dennis Uy sells 25% stake in PNX:

Udenna Group's Chair Dennuis Uy sold 25% stake in Phoenix Petroleum Philippines (PNX) to ES Consultancy Group for P4bn as the company raises funds to develop a $300mn integrated resort and casino project in Cebu. PNX said Udenna Management & Resources Corp. (UMRC) sold 264,841,348 shares, representing a 19.49% stake, at P12 each or a total of P3.17bn. Udenna Corp., on the other hand, sold 75,429,610 PNX shares or a 5.55% stake for a total of P905.15mn. Proceeds of the sale will be used to partially finance Udenna Development Corp. (UDEVCO)’s Lapu-Lapu Leisure Mactan.

Chelsea earmarks P4bn for acquisitions:

Chelsea Logistics would likely spend around P4bn for acquisitions to drive future growth following its initial public offering (IPO) plan. Chelsea which would be offered probably in the 1H17, offers 546mn new shares or 30% of the company to the public. Maximum offer price is pegged at P14.63/share.


T-bills fetched lower rates:

Treasury bills fetched lower rates across the board during yesterday’s auction, with investors swarming yesterday’s P15bn offering with tenders reaching P55.12bn. The benchmark 91-day T-bills fetched a rate of 2.148%, 5.7 bps lower than the 2.205% yield recorded last 8 May. The yield of the 182-day securities fell 10.8 bps to 2.494% from 2.602% during the last auction. Lastly, the longest-dated T-bills saw an average rate of 2.835%, 13.1 bps lower than the previous rate of 2.966%.

Tax eyed on rent, remittances:

The current administration is set to impose tax on apartment and housing rentals and money remittances like pera padala. Dwelling rentals and remittances will be covered by the 12-percent value added tax (VAT) under the so-called tax reform bill the House of Representatives will tackle in plenary session this week. As for the money remittance VAT, it would mean higher fees to be paid by workers, including those based abroad, in sending money to their families.









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