Philippines Market Insights 2018.1.15
News Highlights: SSS & Megawide Construction Corporation (MWIDE) plan to form a joint venture to bid for the redevelopment of NAIA & other infra projects. SSS also plans to get more PSE & TECH shares to get a seat in these firms. SM Prime Holdings, Inc. (SMPH) has 8 new malls lined‐up for 2018 to bring it closer to 10.5mn sqm. from 9.3mn sqm. in 2017. Manila Electric Company (MER) is looking into electric vehicle (EV) production, apart from charging stations. Meanwhile, the Finance bureau (DoF) is confident package 1B of the tax reform program (TRAIN) will be approved 1Q18.
Mart ends the week flat, PSEi @ 8,814: Mart failed to sustain modest gains intra‐day, ending the week on a flat note after a healthy correction was seen from the previous session. Sectors ended mixed, with a significant pull from Mining & Oil (‐1.22%) stocks. Among actively traded shares were: SECB (+P1.20 at P255.40), ALI (unch. at P44.35), BDO (‐P0.10 at P164.90), AEV (‐P1.70 at P73.70), and AC (+P15.00 at P1,065.00), on 7.95bn turnover. Losers outpaced gainers, 96-103, with net foreign buying at P141.94mn.
Might trade higher: Mart might see some gains today following record performance from Wall Street and optimism that Package 1B of TRAIN may be passed 1Q18. Immediate support 8,750, resistance 8,900.
Asian marts rebound: Most Asia‐Pacific markets rebound on Friday, with Hong Kong stocks marking their 14th straight win, following fresh records from US indexes.
Shares breach records anew: US equities breached record closing highs Friday, with positive indications on 4Q17 earnings from banks & retailers. Core US inflation rose 1.8% in 2017, with December results +0.3%. Economists anticipated 0.2% increase, with full year at 1.7%. The rise was due to gains in rent & healthcare.
Oil prices continue to push higher: Oil prices pushed higher as OPEC stays on course to reduce supply in 2018. West Texas Intermediate (WTI) inched up $0.75 to $64.30/barrel.
SSS & MWIDE to JV for the bid to redevelop NAIA & other infra projects:
SSS & Megawide Construction Corporation (MWIDE) plan to form a joint venture to bid for the redevelopment of NAIA & other infra projects. SSS’ move would help boost the pension fund’s recurring income.
SSS aims to get a seat in PSE & TECH:
SSS plans to get more PSE & TECH shares to get a seat in these firms. SSS has more than P100bn investible funds for equities, or 23% of its total portfolio. PSE aims to raise P3.16bn via a rights offer of 11.5mn common shares next month at P275/share. SSS has P400mn worth of TECH shares acquired from the open market.
SMPH has 8 new malls lined-up for 2018:
SM Prime Holdings, Inc. (SMPH) has 8 new malls lined-up for 2018 to bring it closer to 10.5mn sqm. from 9.3mn sqm. in 2017. The new locations are in Imus, Cavity; Legazpi, Albay; Urdaneta, Pangasinan; San Fernando, Pampanga; Moonwalk, Paranaque; Cabuyao, Laguna, among others.
MER eyes EV production, apart from charging stations:
Manila Electric Company (MER) is looking into electric vehicle (EV) production, apart from charging stations. MER has identified EV concepts, part of which is being discussed with Mandaluyong LGU for 3,000‐4,000 e‐trikes.
MPI signs P8bn, 10 & 15 year syndicated term loan:
Metro Pacific Investments Corporation (MPI) signed P8bn, 10-‐year & 15-‐year syndicated term loan, proceeds from which will be used to partly finance the redemption of outstanding debt of fully-‐owned Beacon Electric Asset Holdings & general corp. requirement.
RLC gets PSE approval on rights offer to raise P20bn:
Robinsons Land Corporation (RLC) obtained PSE board’s approval for its rights offer to raise up to P20bn. Preliminary indicative terms are: 1:3.7 or 4.3 common shares held at P18‐P21/share. Pricing will be on 24 Jan., ex‐rights on 26 Jan. Offer will run 02-‐08 Feb.
AGI’s subsidiary’s McDonalds accepts cashless payments in 42 outlets following PayMaya partnership:
Cashless payments are now accepted in 42 outlets of McDonald’s following PayMaya Phils partnership with McDonald’s Phils. PayMaya’s quit response (QR) code payments would also be accepted at McCafe BGC in Taguig & Calamba stores.
UBP says purchase of preferred shares in PR Savings Bank still under negotiation:
Union Bank of the Philippines, Inc. (UBP) said the purchase of preferred shares owned by World Bank’s (WB) Int’l Finance Corp. (IFC) in PR Savings Bank is still under negotiation. Reports came out IFC is unloading is block in the Isabela thrift bank & that UBP’s City Savings will spend P890mn to purchase the said preferred shares. UBP also said the purchase cost of common shares of the ROPALI Group in PR Savings is P6.127bn.
TEL & GLO urges public to give attention on frequency allocation with regards to new telco player:
PLDT Inc. (TEL) & Globe Telecom, Inc. (GLO) believe the public should give ‘careful attention’s on frequency reallocation, as the 700MHz frequency is already extensively used. PCC earlier estimated only 12.8% of the spectrum will be available for a 3rd player in the industry.
LG Corp. of So.Kor wants to partner with PTT to challenge Smart & Globe:
Communications chief Martin Andanar said LG Corp. of South Korea wants to partner with Philippine Telegraph and Telephone Corporation (PTT) to challenge Smart & GLO. No official comment has been made by PTT on the matter.
ROCK to launch ‘The Arton’ in Katipunan, QC:
Rockwell Land Corporation (ROCK) is set to launch ‘The Arton’ in Katipunan, Quezon City, in JV with Mitsui Fudosan Co. Ltd. Of the 1.9ha. lot, 80% will be dedicated for open spaces & 3 towers will be built. Arton West (launched July 2017) will be ready for turnover in 2021. The North & East Arton towers will be completed within a 6-‐year period.
Dennis Uy to lease 4‐ha. near Mactan Cebu Int’l Airport from MWIDE for hotel casino:
Dennis Uy plans to lease 4ha. near Mactan Cebu Int’l. Airport from Megawide Construction Corporation (MWIDE), which will be developed to a world class hotel with casino. Unnamed sources claimed both are seen to sign a long-term lease agreement this week which will compete with Waterfront Hotel & Casino. This plan is on top of Uy’s $341mn, 12.5ha. Emerald Casino that will be built on a beachfront in Mactan Island. Designer will be Arch. Paul Steelman of Solaire.
ECP continues VSAT tech to bring data comm. to provincial areas:
EasyCall Communications Philippines, Inc. (ECP) continues with its Very Small Aperture Terminal (VSAT) technology to bring data communications to provincial areas. The firm is now run by Daki Delgado. ECP is currently setting up VSATs in Zambales, Negros Occidental, Cavite, Bicol, Isabela, Iloilo & Cebu, after serving communities in Samar, Quezon, Iloilo, Bulacan, Nueva Ecija, Isabela, Leyte & Antique.
DOF confident on TRAIN Package 1B passage in 1Q18:
The Finance bureau (DoF) is confident package 1B of the tax reform program (TRAIN) will be approved 1Q18. Finance USec. Karl Kendrick Chua said once the Senate resumes on 15 Jan., the committee report will include estate tax amnesty; general amnesty; bank secrecy relaxation; & automatic exchange of information. The passage of 1B will provide P38.9bn, bringing the first phase of TRAIN revenues to P128.8bn.
ZTE Corp. among 5 who pledged $2bn for microcell towers investment:
Shenzhen-based ZTE Corp. is among 5 members of a group that has pledged up to $2bn investment via TierOne Comm International. ZTE proposed to set up 50,000 microcell towers in the next 5 years, with each microcell having a signal radius of 38km. The initial phase will cover Mindanao. The other members of TierOne include Nokia & New Hampshire-based Parallel Wireless (PW). ZTE was earlier involved in the 2007 National Broadband Network deal issue.