News Highlights: Manila Electric Company (MER) chief Oscar Reyes said electricity sales grew 4.9% in 2017, slower than 2016’s 8.1%. MER is also preparing $800mn capex for 2 wind farm projects that would produce 300MW. Metro Pacific Investments Corporation (MPI)’s North Luzon Expressway (NLEx) estimates P19bn capex for 2018 for Harbor Link segment 10 & connector road between NLEx & SLEx. In other news, the Bureau of Internal Revenue (BIR) aims to finish the implementing rules & regulation (IRR) for the tax reform program (TRAIN) by end of Jan. BIR has identified about 10 rev. regulations (RR) with 4 already up for public consultations: income tax; sugar‐sweetened beverage excise tax; VAT & cosmetic procedure tax.
Mart corrects, PSEi @ 8,813: Mart saw a correction in yesterday's trade, going as low as -107pts on profit‐taking and rising bond yields that investors risk appetite on equities. All sectors declined save for Mining & Oil (+0.29%), while Property (-1.90%) took the brunt. Among actively traded shares were: ALI (‐P1.30 at P44.35), SM (-P22.00 at P1,024.00), BDO (+P0.20 at P165.00), MBT (+P0.20 at P108.00), and URC (-P4.50 at P167.50), on 7.74bn turnover. Losers edged out gainers, 88‐120, with net foreign selling at P878.96mn.
Might book modest gains: Mart might see some modest gains today following yesterday’s correction as some investors would opt to position on beaten up stocks and take cue from Wall Street’s strength. Immediate support 8,750, resistance 8,900.
Shares broadly lower: Asian stocks were broadly down on Thursday for a 2nd straight session, continuing a global pullback from recent record and multiyear highs, with some markets pressured by stronger local currencies.
Shares rally to records: Energy shares led US equities higher Thursday, given crude’s rise as a result of the latest decline in inventories & production.
Oil prices ease: Oil prices ease from 3‐year highs, after seeing prices rise about 15% over the last month. Prices have been supported by stronger‐than‐expected demand fueled by worldwide economic growth, ongoing output limits by OPEC and Russia and a series of global events that have stoked geopolitical tension. West Texas Intermediate (WTI) dipped $0.02 to $63.55/barrel.
MER electricity sales +4.9% in 2017, slower than 2016’s 8.1%:
Manila Electric Company (MER) chief Oscar Reyes said electricity sales grew 4.9% in 2017, slower than 2016’s 8.1%. MER sees 2.5%‐4% electricity sales growth in 1H18, with supply seen adequate to meet demand. Reyes also highlighted approval to MER’s pending power supply agreements (PSAs) having an impact to future supply.
MER programs $800mn capex for 2 wind farms that could generate 300MW:
MER is preparing $800mn capex for 2 wind farm projects that would produce 300MW. Of the total, 150MW will be within MER’s franchise area, 150MW in Ilocos Norte. MER’s Oscar Reyes said it would take 24 months to complete the projects with debt-‐equity on 70-‐30 mix. The wind projects will be under MER’s Spectrum unit, while MGen will focus on large‐scale, baseload coal power plants.
MPI’s NLEx eyes P19bn capex for 2018 for Habor Link 10 & NLEx / SLEx connector:
Metro Pacific Investments Corporation (MPI)’s North Luzon Expressway (NLEx) estimates P19bn capex for 2018 for Harbor Link segment 10 & connector road between NLEx & SLEx. This however, depends on resolution of tariff adjustments with government.
MPI to complete technical due diligence on MRT-3 this month:
MPI aims to complete its technical due diligence on MRT‐3 this Jan. 2018, before the project is endorsed by DoTr to NEDA. MPI offered to invest P12.5bn for the rehabilitation of the train system & not to raise fares for at least 2 years.
PIZZA to open 20 stores in 2018:
Shakey's Pizza Asia Ventures, Inc. (PIZZA) will open 20 stores for 2018, bringing its network to 228 by yearend. Around 24 new stores were opened in 2017, higher than its target of 20. PIZZA aims to have 500 stores in 2022.
VLL to get note holders’ consent on $425mn guaranteed notes due 2022:
Vista Land & Lifescapes, Inc. (VLL)’s fully‐owned VLL International will get note holders’ consent for its $425mn, 7.375/5 outstanding senior guaranteed notes due 2022. The notes are guaranteed by the firm & subsidiaries, Brittany Corp., Camella Homes, Crown Asia Properties, Communities Phils, among others.
Big Boss Cement to open cement facility in Pampanga:
Henry Sy, Jr.- chaired, Big Boss Cement, Inc. (BBCI) is building a cement facility in Porac, Pampanga that would produce 1.5mn bags/month. Commercial operations will start in March. BBCI intends to get 3% market share, with existing players able to accommodate 20‐22mn MT of current demand. Sy owns 95% of BBCI, Anthony Almeda at 4.88%.
BIR to finish IRR for TRAIN by end‐Jan:
The Bureau of Internal Revenue (BIR) aims to finish the implementing rules & regulation (IRR) for the tax reform program (TRAIN) by end of Jan. BIR has identified about 10 rev. regulations (RR) with 4 already up for public consultations: income tax; sugar‐sweetened beverage excise tax; VAT & cosmetic procedure tax. Meanwhile, the other 4 submitted to DoF include excise tax on vehicle, tobacco, petroleum & DST.
DENR to audit 104 firms granted with IFMAs:
The DENR will audit 104 firms granted with Integrated Forest Management Agreements (IFMAs). DENR chief Cimatu cited the need for compliance & performance evaluation of IFMA sites, including Dacon Group of Companies following the shut down of South Davao Dev’t. (SODACO) & Sirawai Plywood & Lumber Corp. (SPLC).