Philippines Market Insights 2018.1.8


News Highlights:  Metro Pacific Investments  Corporation  (MPI) will spend P10bn this year, mostly for its Cavite-­Laguna Expressway  (Calax) & C5 South Link projects. MGen of Manila Electric Company (MER) is holding talks with Irish firm ESB Int’l for a 10-­year operations & management (O&M) agreement for Atimonan One Energy (A1E).  Meanwhile,  The Finance  bureau  has set 15 Jan. as submission  date for package  2 of the tax reform  program  (CTRP).  DoF wants  corporate  income  tax rate lowered to 25% from 30%. December’s inflation was 3.3%, bringing 2017’s full year average to 3.2% (from 2016’s 3.17%).





Mart  continues  to  soar,  PSEi  @  8,770: Mart continued to soar to record-­‐highs  throughout the day, flirting around the 8,800 level intra-day before closing 30pts below the mark. Bullishness on the economy's growth continues to bolster investors' risk appetite. Industrial (+1.37%) and Property  (+1.04%)  sectors  led  gains.  Among  actively  traded  shares  were:  SECB  (-­P3.80  at P246.00), SM (­‐P30.00 at P1,020.00), BDO (unch. at P160.00), URC (+P7.90 at P163.90), and AC (+P25.00 at P1,065.00), on 10.57bn turnover. Gainers outperformed losers, 126‐87,  with net foreign buying at P892.18mn.    

Optimism  on  next  tax  reform  package: Mart might trade higher as investors cheer ahead the submission of the next tax reform package which might propose to reduce the corporate income tax rate from 30% to 25% within the year, in addition to the expected steady inflation within 2%-­4% target. Immediate support 8,700, resistance 8,850.


Shares higher: South Korea stock market bounced higher again on Friday, one session after it had ended the four-­day  winning streak.   Meanwhile, Asian markets were positive, despite weaker than expected jobs data from the U.S. and a drop in crude oil prices.


Shares continue to rally: Wall Street continued to rally Friday, as lower‐than­‐expected rise in jobs data might prompt the Fed to stick to its gradual interest rate hike in 2018.


Oil  settles  lower:  Oil futures settled lower on Friday, losing a grip on the highest levels in three years, but prices still scored a third weekly gain a row on the back of a seventh-­straight drop in U.S. crude supplies and ongoing concerns over unrest in Iran. West Texas Intermediate  (WTI) dipped $0.57 to $61.44/barrel.


MER’s MGen in talks with Irish firm for A1E:

MGen of Manila Electric Company (MER) is holding talks with Irish firm ESB Int’l for a 10­‐year operations & management (O&M) agreement for Atimonan One Energy (A1E).  MGen is evaluating bids from 3 suppliers for engineering, procurement  & construction  (EPC).  Project completion  is slated late 2021.

MPI to spend P10bn capex this year:

Metro Pacific Investments Corporation (MPI) will spend P10bn this year, mostly for its Cavite-­Laguna Expressway  (Calax) & C5 South Link projects.   Calax is set to open in 2020 or early 2021.   The firm is also waiting for the grant of original proponent status from the DPWH for the Cavite-­‐Tagaytay-Batangas Expressway.

PSE to raise P3.16bn thru rights offer:

The Philippine  Stock Exchange,  Inc. (PSE) intends to raise P3.16bn through a rights offer of 11.5mn shares at P275/share.  Proceeds will settle debt & finance capex.  Offer run will be 5-­9 Feb., listing on 23 Feb.

FGEN confirms submitting proposal to PNOon shore storage regasification:  

 First   Gen   Corporation   (FGEN)   confirmed   submitting   a proposal  to  PNOC  to  participate  in  FGEN’s  onshore  storage  & regasification terminal within the First Gen Energy Complex in Batangas City.  The terminal will have 5mn tons per annum (mtpa) capacity.  FGEN started development work for the LNG terminal as early as 2012 & is positioned  to be ready for operations  prior to the termination  of the Gas Sale & Purchase Agreements.

DTI’s  P3  partners  with  TEL  for  MSME  financing: 

DTI’s  P3  (Pondo   sa Pagbabago at Pag-­‐asenso)  partnered with PLDT Inc. (TEL) for the latter’s digital lending platform, ‘Lendr’, to make financing accessible to micro SMEs.   Lendr is a product of FINTQ, the financial  technology  arm of TEL & Smart’s Voyager Innovations.   The solution allows mobile users to select a loan product, fill up an application form, submit their requirements & get approval notification  via mobile.

GLO maintains capex at  $850mn:

Globe  Telecom, Inc.  (GLO)’s  board approved $850mn capex for 2018, consistent with 2017’s figure.  Capex-­‐ to-­‐revenue for 2017 was at 34%.  A good portion of the capex will be used to deploy massive MIMO technology to expand & enhance GLO’s LTE network.

GLO says P300+ prepaid load to carry oneyear expiration:

GLO said prepaid  load with P300 denomination & up will carry one-­year expiration from the present 120 days.  Meanwhile,  prepaid load of P1 to below P300 expires  3-75 days.   GLO still needs to address  expansion  capacity,  system tests & new number series.

ICT’s board approves  issuance  of new perpetual  notes by Royal Capital BV:

International Container Terminal Services, Inc. (ICT)’s board approved the   issuance  by   Royal  Capital  BV   of   new   senior  perpetual  notes guaranteed by ICT. Terms of the float will be announced later.

PNX gets approval from PCC on purchase of FamilyMart:

Phoenix Petroleum Philippines, Inc. (PNX) obtained a decision from the Phil. Competition Commission (PCC) approving the purchase of 100% of Phil. FamilyMart CVS from SIAL CVS Retailers, FamilyMart Co. Ltd. & Itochu Corp.  PNX is also evaluating the viability of gas stations where it would put up FamilyMart units. PNX had 523 service stations as of Sept. 2017.

Lush Group to do IPO in 1H18:

Lester Yu’s Lush Group plans to do an IPO in 1H18 to finance  its expansion  plan.   The firm offers fresh fruit juices & shares under Fruitas brand.  Details will be announced  soon.


DOF sets 15­‐Jan as submission for package 2 of CTRP:

The Finance bureau has set 15 Jan. as submission  date for package 2 of the tax reform program (CTRP). DoF wants corporate income tax rate lowered to 25% from 30%.

Dec inflation at 3.3%, fullyear average at 3.2%:

December’s  inflation was 3.3, bringing 2017’s full year average to 3.2% (from 2016’s 3.17%). Economic Planning chief Pernia said the results would allow government to maintain its inflation target of 2%-­4% for the year.

DOF hires experts from Dev’t Academy of the Phil. for MICC:

The Department  of Finance  (DOF)  hired  experts  from  the  Dev’t.  Academy  of the Phils. to form part of the 5 technical review team formed by the Interagency   Mining  Industry  Coordinating   Council  (MICC)  to  review  26 mining operations  that were ordered closed or suspended  by DENR during Lopez’s term. The review will take place this week.










Philippines Market Insights 2017.12.29


Philippines Market Insights 2018.1.10