Philippiness Market Insights 2016.12.29


News  Highlights:  On  the  corporate  front,  Metro  Pacific  (MPI)  through  Metro  Pacific  Tollways  Development  Corp.,  raises  its  stake  in  Tollways Management Corp., the operator of North Luzon Expressway, Subic-Clark-Tarlac Expressway and Manila-Cavite Expressway. Meanwhile, government deficit in November surged to P19.1bn as expenditures jumped 33%, which outpaced the 18% growth in revenue collection.





Rate %








28 Dec


Abs. Chg.


% Chg





91-day 1.484 +20.3 8.0 Gold Spot (USD) 1,141.67 2.89 +0.25 Close 49.82
182-day 1.809 +30.4 6.0 Copper (USD/lb) 250.05 (1.50) (0.60) High 49.84
364-day - N.A. 6.0 WTI Crude (USD/bbl) 54.06 0.16 +0.30 Low 49.77
                Ave 49.81
Total     20.0         Vol (US$mn) 288.30





Mart sustained rally, PSEi @6,846: Local mart continued its rally, tracking US gainsdespite the thinly-traded session as New Year holiday approaches. PSEi rose by 188points to close at 6,846.44 (+2.83% day-on-day), with all sectors posting gains, led by holding (+3.09%). Among actively-traded shares were: ALI (+P1.55 at P31.70); AC (+22.00 at P732.00); and MPI  (+P0.12 at P6.50), on P3.45bn turnover. Gainers outnumbered  losers at  119-58, with net foreign buying at P269mn.

Mart might trade higher: Local bourse will try to continue rally in an attempt to pare losses for 2016. Despite the slim chance, PSEi will try to break even and must add 106 points to avoid closing for the second straight  year on a loss. Immediate support at 6,720, resistance 6,950.


Most marts higher after tracking US gains: Bourses across the region ended mixed, with most marts inching higher amid US overnight gains.


Equities  lower  on  the  lack  of  leads:  Equities  declined  on  the  absence  of  market catalysts. Dow Jones shed 111 points, its second triple digit loss since the election.


Crude up on output cut optimism: Oil futures extended gains for the fourth consecutive  session as market awaits the 01 January 2017 output  cut  agreement  to take  effect.  West  Texas  Intermediate  for  February  added  $0.16  to  close  at $54.06/barrel.


MPI  unit  hikes  stake  in  tollway   operator   firm:     Metro  Pacific   (MPI) through   Metro  Pacific  Tollways   Development   Corp.,  raises  its  stake  in Tollways  Management   Corp.,  the  operator  of  North  Luzon  Expressway, Subic-Clark-Tarlac Expressway and Manila-Cavite Expressway. MPTDC acquired   53,200   common   shares   from   Egis   Road   Operation   S.A., translating to 14% of the total issued purchase price and outstanding capital  stock of TMC.   Prior to the transaction,  MPTDC  already  owns  46% of TMC shares.  The price for the acquired shares was paid in cash.

SM  received   18  awards   for  energy   efficiency:   SM  Investments   (SM) received 18 awards for its energy efficiency initiatives from the Energy Department's Don Emilio Abello Energy Efficiency Awards for 2016. SM awardees included Cyber Makati 1 (hall of fame) and SM City Iloilo, SM City North EDSA (Annex), The Podium, Mall of Asia and Cyber Makati 1 (outstanding  awards).

MER  in talks  with  Japanese  firm  for billing  system:    Manila  Electric  Co. (MER)  is in talks  with  a Japanese  firm  for  its  potential  reinforcing  of its billing  systems.     Japanese  firm  initially   eyes  minority   equity  in  MER’s corporate vehicle handling its Bayad Center or its bills payment system. Reports hinted that it is Densan Co. Ltd., a leading integrat ed payment solution provider in Japan.   However, the prospective Japanese partner would   still   have  to  go  back   to  its  board   to  secure   approval   before advancing into firmer partnership deal with MER.

JFC unit won against BIR's tax assessment:  Jollibee Foods (JFC) unit Fresh N' Famous was granted by the CTA Third Division on its petition to reverse the BIR's decision dated 17 August 2010 regarding the company's tax deficiency amounting to P125mn for the taxable year 2000. The breakdown of BIR's assessments are as follows: income tax deficiency of P97.10mn, VAT deficiency of P2.46mn, EWT deficiency of P20.55mn, documentary stamp  tax  deficiency  of  P4.28mn and  P460k,  and compromise   penalty  of  P41k.  The  CTA  concluded  that  BIR  has  no  valid notice of assessment sent to JFC, including the assessment against the petitioner for its alleged tax liabilities for taxable year 2000.


Deficit reached P19.1bn in November:  Government deficit in November surged to P19.1bn as expenditures  jumped 33%, which outpaced  the 18% growth in revenue collection.   Spending surged 33% to P228.357bn, marking the biggest monthly expenditure, so far, this year versus the revenue collection amounting to P209.212bn. This brought the total budget shortfall  in the first 11 months  to P235.2bn.   Recall that under the Duterte  administration’s economic  blueprint,  GDP  growth  is  targeted  to speed up to 7%-8% annually from 2018-2022 from 6.5%-7.5% in 2017 and from  6%-7%  this  year,  helping  to trim  poverty  rate to 13%-17%  in 2022 from 2015’s actual 21.6%.

Term deposit facility undersubscribed:   The P180bn term deposit facility was undersubscribed amid seasonality and cautiousness from market players according  to the central  bank (BSP).   Total tenders for the weekly volume of P180bn reached just P148.839bn.  The month-term auction attracted only P111.0333bn  against the P150bn allotment,  while the 7 -day term, however, was oversubscribed, with total tenders of P37.806bn.

3% unemployment rate target by 2022:  The government targets cutting unemployment rate to 3% within the Duterte administration.  Labor Force Survey  conducted  by  PSA  showed  that  annual  unemployment  rate dropped to 5.5% from 2015’s 6.3%, translating to about 2.39mn Filipinos unemployed for the year 2016.    Therefore, the government needs to generate  at  least  12mn  jobs  before  2022  to  achieve  the  employment target.

BoI approves  housing  project:   The Board  of Investments  (BoI) approved the application of Schmidt Konstruktion Systems Corp. as a new domestic producer of modular housing components amid its compliance to the requirements under the current Investment Priorities Plan (IPP). The P13.7mn project covers the development of economic and low-cost housing and the manufacture  of modular housing components.









Philippiness Market Insights 2016.12.23


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