Philippiness Market Insights 2017.1.4


News Highlights: Megaworld Corp. (MEG) is interested in bidding for the P74.6bn PPP project to upgrade the Ninoy Aquino International Airport (NAIA). BDO Unibank (BDO) finalizes the terms for its P60bn stock rights offering (SRO) of up to 716.4mn common shares to shareholders as of 10 January 2017 record date.

Security Bank Corporation (SECB) is positive on attaining its 2016 outlook, on the back of strong 9M16 results. According to Alfonso Salcedo, Jr., president and CEO of SECB, loan growth is expected to be within 22% - 29% by end of the year, driven by the bank's strategic expansion.





Mart up amid upbeat China PMI, PSEi@6,861: Local benchmark rose on thin volume after data showed China manufacturing PMI climbed in December. PSEi inched 20 points up at 6,861 (+0.30% day-on-day), with all sectors ending in green except services (-0.10%). Among actively-traded shares were: GLO (+P5.00 at P1,514.00); AC (-P3.50 at P727.00); and TEL (+P5.00 at P1,370.00), on low turnover at P2.68bn.
Gainers outnumbered losers at 89-79, with net foreign buying at P319mn.

Mart to move higher on positive sentiment: Local mart is seen to end this session with firm gains, following the last minute run-up in yesterday’s session. Upbeat data from US and recovery in oil prices are expected to boost investors’ sentiment today and could help them gauge the outlook of the global economy for this year.
Immediate support at 6,790, resistance 6,900.


Marts went broadly higher amid positive China PMI data: Most bourses closed higher buoyed by encouraging China’s December Caixin  manufacturing PMI, which stood at 51.9.


Equities rose buoyed by encouraging economic data: Shares rallied amid optimism at the start of the year, coupled with better-than-expected ISM manufacturing (54.7 vs. 53.2) in December and construction spending (+0.9%) data in November.


Crude down, dampened by strong US dollar: Oil prices slid as traders took profits after it hit its 18-month high intraday, coupled with US dollar rallying to its highest level since 2002. West Texas Intermediate (WTI) for February fell $1.39 at $52.33/barrel.


MEG looking to bid for NAIA upgrade project: Megaworld Corp. (MEG) is interested in bidding for the P74.6bn PPP project to upgrade the Ninoy Aquino International Airport (NAIA). The project includes the  operation and maintenance of the country’s main gateway with a 15 to 20- year concession agreement. MEG is also looking into other PPP projects which are aligned with its existing core businesses.

BDO sets final terms for SRO: BDO Unibank (BDO) finalizes the terms for its P60bn stock rights offering (SRO) of up to 716.4mn common shares to shareholders as of 10 January 2017 record date. 1 common share for every 5.095 common shares held is entitled to each eligible shareholder, with an offer price of P83.75 per rights share, which is based on the 15-day VWAP of BDO shares listed at a discount of 23.4%. The offer period will start at 9am on 16 January to 24 January.

SECB on track to hit 2016 targets: Security Bank Corporation (SECB) is positive on attaining its 2016 outlook, on the back of strong 9M16 results. According to Alfonso Salcedo, Jr., president and CEO of SECB, loan growth is expected to be within 22% - 29% by end of the year, driven by the
bank's strategic expansion. Total loans stood at P268.2b for the first nine months, while deposits grew to P298.7bn. The bank's partnership with Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) has already produced results as SECB currently receives accounts from the clients of the Japanese bank.

RFM to sell roughly 4mn treasury shares: RFM Corp. (RFM)’s board informally gave consent on the sale of 4,363,000 treasury shares as the company often receives queries from investors, wanting to buy in substantial blocks.


Gov't plans P1.2tn infra budget for 2018: The current administration plans to spend around P1.2tn in infrastructure development for 2018, in line with its stance to boost infra spending and reduce infra gap in the country. The P1.2tn proposed budget would represent 6.8% of the GDP, higher than the 5.2% of GDP allocation for 2017.

2016 yields on gov't securities end mixed: Yields on gov't securities were
mixed on the concluding days of 2016 as markets assessed the policy actions from the Fed and Bank of Japan (BoJ). The 182-day Treasury bill (Tbill) added 79.94bps to 2.9464%, while 91-day T-bill rose by 30.55bps to 2.0755%, and 364-day T-bill inched 15.11bps higher to 2.4520%. On the
other hand, Treasury bonds (T-bonds) yields were lower as three-, four-, five- and seven-year T-bonds settled at (3.5170%, -28.54bps), (3.8814%, - 5.37bps), (4.7426%, -7.35bps), and (4.8857% -5bps), respectively.

BSP pushed back leverage ratio adoption on Basel III to 2018: The Bangko Sentral ng Pilipinas (BSP) has decided to push back the 5% leverage ratio adoption on the Basel III framework to 2018. This was in view of the newest revisions done by the Basel Committee on the  anking Supervision. Currently, BSP has a 5% leverage ratio standard compared to the 3% minimum set under Basel III. The adoption is voluntary and can be done gradually by central banks.

Banks failed to reach agri lending quota: According to the Bangko Sentral
ng Pilipinas (BSP) data, universal, commercial and thrift banks failed to reach the 10% loanable funds to agrarian reform beneficiaries and the
15% allotment for farmers and fishermen. Only the rural and cooperative
banks were able to comply with the lending requirement, as of end- September. The banks agri lending reached P377.1bn or 12.8% of the
quota. DPWH reviews Laguna expressway: The Public Works Department
(DPWH) is currently reviewing the terms for the auction of the Laguna Lakeshore Expressway Dike Project (LLEDP) this year after it  declared a failed bidding following the qualified bidders not submitting offers. Three pre-qualified bidders were: San Miguel Holdings Corp., Alloy Pavi Harshen LLEDP Consortium and Team Trident. Team Trident is composed of Trident Infrastructure and Development, Ayala Land (ALI), Megaworld (MEG), Aboitiz Equity Ventures (AEV), SM Prime Holdings (SMPH).









Philippiness Market Insights 2017.1.3


Philippines Market Insights 2017.1.5