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Monday, December 29, 2014

Philippine share prices seen playing catch up to ascent of markets overseas

Philippine share prices may close the year above the 7,200 level on window dressing and following Wall Street’s record performance last week.

The local bourse may play catch up to overseas markets after a three-day break due to the Christmas holidays, said Astro del Castillo, managing director at First Grade Finance Inc.

Last Friday, US benchmark indices continued their ascent to uncharted territory, with the Dow Jones Industrial Average rising 23 points, or 0.1 percent, to 18,053, its 38th record close of the year, and the Standard & Poor's 500 adding 6.89 points, or 0.3 percent, to 2,088.70, its 52nd record close.

"We can see a bit more upside. Resistance is at 7,200 and we expect the market to hit that. There may be a bit of profit-taking on some of the blue chips that have gone up and we can see a resumption of the run on January 5," said Alexander Adrian Tiu of AB Capital Securities Inc.

The bellwether Philippine Stock Exchange index (PSEi) finishing above the 7,200 line translates to a gain of more than 22 percent this year compared to its flat finish in 2013. The PSEi rose 0.85 percent to end the holiday-shortened week at 7,186.32.

Low trading volumes may also be seen because of the lack of players and funds wanting to preserve their returns, said Luis Limlingan, business development head at Regina Capital Development Corp.

"Trading will be much slower unless there’s some surprising economic news or newsworthy event that will shock the market in either direction. It may swing a bit upward on window dressing," Limlingan added.

Sunday, December 21, 2014

Meralco expects oil price dividend

The country's biggest electricity distributor expects a dividend from the weakness in the international market for crude oil.

Manila Electric Co president Oscar S. Reyes said the continued dip in world oil prices could bring down power rates, encouraging higher demand.

Global oil prices have slumped on the back of higher production of U.S. shale oil coupled with the OPEC's refusal to cut production.

Consequently, the international oil cartel and the International Energy Authority separately forecast softer demand in 2015.

About 40 percent of Meralco's electricity supply is fueled by the Malampaya natural gas from offshore Northwest Palawan. The price of Malampaya gas is indexed to world oil prices.

Alfredo S. Panlilio, Meralco senior vice president, said sales volume would likely grow between 3 and 3.5 percent in 2015.

This is about the same increase the company expected this year, propped up mostly by an uptick in demand in the second half after the cooler weather in the first few months tempered electricity use.

“Next year, we are looking at around 3 to 3.5 percent driven by the same factors," Panlilio said.

These figures, however, do not account for possible pre-election spending that could boost demand, he added.

In the first nine months of this year, Meralco's profit rose seven percent led by growth in sales to its commercial and industrial customers.

- Interaksyon

Saturday, December 20, 2014

11 stocks that still have an upside in 2015

The Philippine Stock Exchange index (PSEi) may hit the 7,700 level in the next 12 months after weathering the volatility at the close of 2014.

In a briefing today, RCBC Securities vice president for research Raul P. Ruiz said the forecast is based on the projected 15 percent growth in earnings of the basket of 50 companies that the brokerage covers.

"A lot of the recent selloff is because of oil prices. In the long run, that's a plus for the Philippines. We expect the market to reverse next year, taking into account the lower oil prices which will be good for the Philippine economy," RCBC Securities president Gerald O. Florentino said.

Election-related spending ahead of the 2016 polls will also boost the Philippine economy, Florentino added.

As a result of these factors, RCBC Securities is overweight on consumer stocks like Robinsons Retail Holdings Inc, SSI Group Inc, Puregold Price Club Inc and Universal Robina Corp.

Despite the declining revenues of the casinos in Macau, RCBC Securities sees upside for gaming stocks, particularly Bloomberry Resorts Corp and Travellers International Hotel Group Inc.

The brokerage also likes First Gen Corp and Energy Development Corp for power and Megaworld Corp, SM Prime Holdings Inc and Vista Land & Lifescapes Inc for property.

RCBC Securities is projecting the PSEi would close this year between the 7,200 and 7,300 levels if the critical support level of 6,900 holds. The local equities market had a volatile trading session today with the main gauge settling at 7,029.28, up nearly a percent.

If the support level fails to hold, the benchmark index can fall to as low as 6,800 by yearend, Ruiz said.

He expects the last four trading days of the market to be volatile as oil prices remain the focal point of trades.

"It's been a good year. We're still up 20 percent. It's just a bit shaky because of the drop in oil prices. A lot of the funds are cautious because of higher valuations and with the market coming down, that should provide buying opportunities for these funds to come back into the market," Ruiz said.

"The funds are just standing by, waiting for good levels. You will see them coming back in. A lot of these funds made a lot of money so it’s easy for them to take profits," he added.

- Interaksyon

Monday, December 15, 2014

Alliance Global expects all business units to contribute to growth in 2015

The holding firm of billionaire Andrew Tan expects faster growth next year anchored on expansion across its business units.

"The growth momentum is there. We expect growth for next year obviously," Alliance Global Group Inc (AGI) president Kingson Sian said on the sidelines of Emperador Inc's special stockholders meeting on Monday.

AGI's net income attributable to equity holders was flat at P11.4 billion in the first nine months of the year due to reduced ownership in Emperador and Travellers International Hotel Group Inc.

Property arm Megaworld Corp will "continue to expand on all fronts," launching more projects fuelled by the country's high-growth trajectory and the recovery in the United States, Sian said.

Megaworld maintained an upbeat outlook on the sector even after the Bangko Sentral ng Pilipinas imposed stricter control on lending to real estate.

"Most of our buyers, majority is still funded out of equity. [It may affect] those that need more financing. Based on our financing plan, by the time we turn over [our projects], buyers would have paid 40-50 percent so pasok ka na sa value," Sian said.

Liquor maker Emperador will introduce new products and capitalize on synergies with Scotch whisky maker Whyte & Mackay for its expansion into new markets.

"With the acquisition, we need to be able to leverage off each other's network. Whyte & Mackay is expanding into new markets, same with Emperador, and also introducing new products to the market," Sian said.

A joint venture with Genting of Malaysia, Travellers International will continue expanding Resorts World Manila with the Marriott Grand Ballroom expected to be completed next year. The new wing of the Marriott Hotel will be unveiled in 2016, followed by the completion of the third phase expansion in 2017 and the opening of Bayshore City Resorts World in 2018.

Golden Arches Development Corp, the master franchisee of McDonald's in the Philippines, is on track to open its 500th store next year. McDonald's already has 430 stores in the Philippines.

During the special meeting, Emperador shareholders approved the issuance to Arran Investment Private Limited of up to P22 billion worth of common shares and equity linked securities convertible to common shares. Arran Investment is an affiliate of GIC, Singapore's sovereign wealth fund.

- Interaksyon

Friday, December 12, 2014

PSE expects companies to raise P200 billion in 2015

The Philippine Stock Exchange targets facilitating P200 billion ($4.49 billion) worth of capital raising next year as listed companies seek fresh funds for expansion amid strong macroeconomic fundamentals, PSE President Hans Sicat said.

Ten companies are seen to debut in the stock market next year through initial public offering (IPO) and backdoor listing, the top official of the PSE said.

"There's a lot of need for companies to raise capital because of the need to expand," Sicat told reporters late Thursday.

A number of fundraising programs, including the up to $172 million IPO of real estate firm Profriends Group Inc, were pushed back to next year, prompting the PSE to forecast a shortfall in its P200 billion target for this year, Sicat said.

Capital raised this year in the local bourse reached P128 billion as of end-September.

But capital raising activities will likely reach the P200 billion level next year driven by follow-on offerings, including the up to $336 million preferred share sale of San Miguel Pure Foods Co Inc.

"What we're hoping for is that publicly listed companies will continue to demonstrate strength in terms of increasing their revenue and net income, which is the PSE story over the last 4-5 years," said Sicat.

Sicat said he expects the consumption-driven economy to support growth despite global headwinds.

Consolidated revenue of locally listed companies climbed 28.8 percent to P3.27 trillion in the first half, while aggregate net income rose 10.8 percent to P311.57 billion from a year earlier.

Seven companies have debuted in the PSE this year, increasing the number of listed firms to 263. The broader index has gained 21 percent year-to-date.

- ABS-CBN News

Philippine share prices rebound after Moody's rating lift

Philippine share prices on Friday rebounded from a five-day losing streak with the benchmark index returning above the 7,200 mark, as investors found reason to take positions following the upgrade in the country's credit rating.

At the Philippine Stock Exchange, the composite index surged 152.11 points, or 2.15 percent, to close at 7,224.21. The main gauge cut weekly losses to 0.1 percent after losing as much as 2.19 percent before today.

All counters gained at least 1.2 percent with the services, property and financials rising more than 2 percent each.

Advancers beat decliners, 128 to 49, while 44 issues were unchanged. A total of 1.81 billion shares worth P11.61 billion changed hands.

The most actively traded stocks were SM Prime, Universal Robina, BDO, EDC and Alliance Global. The top gainers were Bogo Medellin, Philweb and Republic Glass, while the biggest losers were Island Information, Jackstones and Anchor Land.

"The push is mainly propelled by the positive sentiment from the credit rating upgrade of Moody's. Technically, the market is ripe for a rebound, and coincidentally, the upgrade happened," said Alexander Adrian Tiu of AB Capital Securities Inc.

After the close of Thursday trades, Moody's Investors Service raised the Philippines’ debt rating by a notch to "Baa2" from "Baa3," while assigning a "stable" outlook.

Before today’s session, local equities have been on a five-day losing streak that dragged the PSE index below the 7,100 mark, with investors nearly giving up on the possibility of the composite index retesting all-time high levels before yearend.

"There's a chance of a late push given the positive sentiment but we still have to take into account that in terms of technicals, we're still in bear market territory. In terms of fundamentals, this could be the push the market needs," Tiu said.

Also yesterday, the Bangko Sentral ng Pilipinas decided to maintain its benchmark rates to further boost positive sentiment, said Jason Escartin of

"Also, positive economic data coming from the US may provide some support following the market’s rout in the previous session due to the continued decline in oil prices," Escartin said.

US stocks recovered last night as November sales of US retailers grew at their fastest pace in eight months. However, the rally lost steam due to a renewed slide in oil prices.

The Dow Jones Industrial Average rose 63.19 points, or 0.4 percent, to 17,596.34 after gaining by as much as 216 points. The Standard & Poor’s 500 Index inched up 8 points, or 0.4 percent, to 2,034.

- Interaksyon

Thursday, December 11, 2014

Moody's lifts Philippines' credit rating further into investment grade

The Philippines has gone further into uncharted terrain after one of the world's three leading credit rating firms delivered yet another upgrade.

In a statement, Moody's Investors Service today said it raised the Philippines' debt score by a notch to "Baa2" from "Baa3." The debt watcher assigned a "stable" outlook, which means the new score will remain in the next 12-18 months.

Moody's latest move comes more than a year after it first elevated the Philippines to investment grade pushing a country that had been dubbed the "sick man of Asia" further into uncharted territory.

According to Moody's, the government's success in reducing its debt was one of the key reasons for the fresh upgrade. Since the Arroyo administration, the Philippines has been trimming its debt, particularly the foreign component, which has been a source of instability in the past given the country's erratic foreign exchange earnings.

From more than half of its gross domestic product (GDP), the Philippines' debt has slipped to less than 40 percent so far this year. The foreign component of the country's debt also has slipped to about a fifth this year from a third a decade ago.

Besides an improving fiscal profile, the country's strong economy and limited vulnerability to financial risks that usually infect emerging markets like the Philippines also called for the increase in its debt score, the rating firm said.

Despite headwinds in the global economy that have pulled Japan and parts of the euro area back into recession, the Philippines has been growing above trend, making it one of Asia's fastest-growing in the last two years.

Adjustments by advanced economies to the global financial crisis of 2008-2009 also have created financial market volatility, but the Philippines remains less vulnerable than its emerging market peers given the country's strong current account, which has been in surplus for more than half a decade.

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said the latest credit-rating upgrade is welcome news coming at a time when the global economy remains fragile.

“The latest credit rating upgrade is a recognition of our efforts to keep the Philippine economy resilient amid constant challenges posed by the external environment. Contributing to this resiliency are the country's comfortable external liquidity, strong financial system, and a favorable inflationary environment," Tetangco said.

Finance Secretary Cesar V. Purisima said Moody's latest move is the result of the Aquino administration's "efforts... to institutionalize reforms to help ensure the agenda of good governance continues."

“The upgrade is an acknowledgment of the sound management of the economy. There should be no turning back as far as good governance is concerned; the only direction we should see for the Philippine economy is forward,” Purisima added.

- Interaksyon

Wednesday, December 10, 2014

Pure Foods sets fundraiser in first quarter

San Miguel Pure Foods Co Inc is raising up to P15 billion from a public sale of shares early next year.

Documents from the Securities and Exchange Commission (SEC) show Pure Foods will sell 10 million preferred shares at a maximum offer price of P1,000 apiece. An additional 5 million shares will be sold in case of strong demand to jack up the gross proceeds to P15 billion.

The preferred shares are cumulative, non-voting, non-participating and non-convertible. Preferred shares represent ownership in a company, but dividends on them are paid ahead of those on common shares.

Pure Foods will use the net proceeds from the share sale to finance the redemption of outstanding preferred shares amounting to P15 billion, which are callable starting March 3, 2014 or on any dividend payment date thereafter.

The dividend rate of the new shares will be set on February 11, 2015 with the offer period scheduled to run from February 16 to March 5. The shares will be listed on the Philippine Stock Exchange on March 12.

BPI Capital Corp, China Banking Corp, RCBC Capital Corp, SB Capital Investment Corp and Standard Chartered Bank were tapped as the joint issue managers, joint lead underwriters and joint bookrunners of the offering.

Last month, Pure Food's board cleared the issuance of up to 25 million preferred shares at P1,000 apiece with the proposed offering covered by a shareholders approval in a meeting last November 2010.

Pure Foods posted flat earnings of P2.7 billion in the nine months through September on higher costs caused by Typhoon Glenda and the Manila port congestion.

The company behind the Magnolia, Monterey, Star, San Mig Coffee, and B-Meg brands, Pure Foods is part of San Miguel Corp, which has interests in beverage, packaging, power generation, oil refining and retailing, mining, telecommunications, property development, and infrastructure.

- Interaksyon

Ayala, Datem, Filinvest and Megawide shortlisted for south metro transport hub project

Four companies have been shortlisted for a P4-billion public transport terminal project in the south of Metro Manila.

The Department of Transportation and Communications (DOTC) identified the four qualified bidders for the Integrated Transport System (ITS) - South Terminal as Ayala Land Inc (ALI), Datem Inc, Filinvest Land Inc (FLI) and Megawide Terminals.

DOTC said these four were found to have fulfilled the legal, technical and financial qualification requirements for the project.

They have until April next year to submit their bids.

One of the Aquino administration's public-private partnership (PPP) projects, the ITS - South Terminal will be located near the Food Terminal Inc, the development contract for which ALI earlier bagged.

The project will connect passengers coming from the provinces of Laguna and Batangas to other urban transport systems, such as the future North-South Commuter Rail, city buses, taxis and other public utility vehicles that serve the inner Metro Manila.

The terminal will include a passenger terminal building, arrival and departure bays, public information systems, ticketing and baggage holding facilities and park-ride facilities.

The winning bidder will build, operate and manage the said terminal for 35 years.

- Interaksyon

Tuesday, December 9, 2014

Government starts search for challenger to Metro Pacific Group's SCTEX proposal

The government has opened the floor to third parties wanting to challenge the Metro Pacific Group's proposal to operate and maintain the Subic-Clark-Tarlac Expressway (SCTEX).

In an invitation published in a newspaper, state-run Bases Conversion and Development Authority (BCDA) said the Office of the President had directed that the Manila North Tollways Corp's (MNTC) offer to operate and maintain SCTEX until 2043 be subjected to a price challenge in the interest of transparency and for competition.

Controlled by Metro Pacific Investments Corp (MPIC), MNTC bagged the SCTEX contract in 2011, or the final year of the Arroyo administration, but the Aquino government sought to renegotiate the terms of the deal in a bid to increase the state’s share in toll revenue.

MNTC had proposed to amend the contract terms twice to no avail. According to BCDA’s guidelines, challengers should at least:
  • Pay upfront P3.5 billion in cash, including the 12 percent value added tax (VAT);
  • Offer a 50-50 sharing of the gross toll revenues between BCDA and the private sector partner;
  • Assumption of the operation and maintenance costs and responsibilities over SCTEX; and 
  • Assumption of the ongoing integration agreement for the toll collection system of the North Luzon Expressway (NLEX) and SCTEX.
"The objective of the price challenge is the upfront cash only, which should be higher than P3.5 billion, payable upon signing of the agreement. While the other terms should be accepted by the proponents," BCDA said.

BCDA, however, said MNTC has the right to match the upfront cash proposal of the highest rated and responsive proponent (HRRP) in which case, MNTC shall be awarded the contract.

"If MNTC fails to match the upfront cash offer of the HRRP, the latter shall be awarded the contract," BCDA said.

To be eligible, challengers should satisfy the following minimum requirements:
  • The proponent should meet the 60 percent Filipino ownership requirement for public utilities. In case the proponent is a joint venture/consortium it should be 60 percent Filipino owned before the signing of the agreement. 
  • The proponent or any of the members of the consortium must have at least three years experience in the management, operation and maintenance of a toll road within the last 10 years.
  • The proponent or any of the consortium members should have a net worth or a credit line issued by reputable commercial bank(s) in the amount of at least P5 billion as of December last year.
  • The proponent should buy the terms of reference worth P500,000, which will be available on December 11. 
  • The proponent should be a corporation registered with the Philippines’ Securities and Exchange Commission (SEC), or in case of a joint venture/consortium at least one member should be registered with the same agency. 
The BCDA scheduled the pre-selection conference to discuss the terms of reference and the SCTEX at 2 p.m. of January 6, 2015.

The SCTEX is a 94-kilometer fully-operational four-lane expressway traversing the provinces of Bataan, Pampanga and Tarlac. The road, which has an average daily traffic of 30,855, provides a direct link to Metro Manila through NLEX.

Sought for comment, MNTC president Rodrigo Franco said, "Generally, we are supportive of BCDA's effort to conduct a price challenge, especially that it was ordered by President Aquino as part of the process."

Franco said the company has yet to see the final terms of the price challenge.

"But our concern is that if BCDA's process is not fair there's a possibility that there will be a legal issue," he said, without providing any detail.

- Interaksyon

Tuesday, December 2, 2014

Phoenix Semiconductors flat on Philippine stock market debut

Shares in Phoenix Semiconductors Philippines Corp closed flat on its stock market debut on Monday, as other upcoming listings prompted investors to lock in their gains.

The local arm of one of Samsung's South Korean suppliers saw its stock open at P3.40 per share, an increase of 7.94 percent from its listing price of P3.15 apiece. The stock pared its gains to finish unchanged for the session.

"It's satisfactory. It opened strong, but the gains became unsustainable due to some liquidity issues. The listings are simultaneous and being the first, it became the victim of profit-taking on its first day of trading," said Jose Vistan of AB Capital Securities Inc.

Xurpas Inc, Megawide Construction Corp and Integrated Micro-Electronics Inc have recently concluded their respective equity offerings and are set to list their shares in the next few days. The Philippine Stock Exchange index advanced 0.51 percent.

Phoenix Semiconductor raised P1 billion from the sale of 459.39 million shares with institutional investors cornering half of the total offer and the issuance enjoying "very strong support" from the retail market," BDO Capital & Investment Corp senior vice president Gabriel Lim told reporters on the sidelines of the company's listing ceremony.

BDO Capital is the sole issue manager and lead underwriter of the offering.

Phoenix Semiconductor decided not to exercise the overallotment option of 134.63 million shares because the base offer will be enough to cover financing for its expansion, Lim added.

"Because several local banks also began offering credit facilities to the company to finance the expansion program, the company felt it would be best to finance expansion program from equity and credit facilities offered by banks. It's a good signal because more banks were confident in the company," he said.

Net proceeds from the primary offer will be used to fund Phoenix Semiconductor's $170-million expansion program through the acquisition of machines, building improvement and the construction of a new facility within its 15-hectare area at the Clark Freeport Zone in Pampanga.

Phoenix Semiconductor chief finance officer Kim Dong Joo said the expansion program will enable the company to serve new clients with the manufacturer now in talks with a Japanese company and 2-3 American firms.

The company’s operation solely serves the requirements of Samsung Electronics Co Ltd and its customers.

Phoenix Semiconductor is considering a third phase of expansion of its manufacturing operations that may entail the production of non-memory products in three to five years, Kim said, noting that its manufacturing operations in the Philippines is 30 percent cheaper than China mainly because of labor costs.

Phoenix Semiconductor is a unit of STS Semiconductor & Telecommunications Co Ltd. STS is 28.10 percent owned by Seoul-based Bokwang Co Ltd, which has businesses in leisure, retail, advertising and culture, financial services and manufacturing.

- Interaksyon

Thursday, November 27, 2014

3Q14 GDP growth disappoints as government spending and agriculture drops

Government and agriculture down

3Q14 GDP growth reached 5.3%, below consensus forecast of 6.4%. Weak spending from the government was largely responsible for the below expected GDP growth. During 3Q14, government spending dropped by 2.6%, sustaining the weakness displayed during the first half. For the first nine months of the year, government spending fell by 0.1%. Weakness of agriculture also dragged GDP growth. During 3Q14, agriculture spending fell 2.7%. On the positive side, consumer spending remained resilient while exports continued to grow. Consumer spending increased by 5.2% during 3Q14, after growing by 5.8% in 1Q14 and 5.3% in 2Q14. Exports rose by 9.8% during 3Q14, after increasing by 12.6% in 1Q14 and 10.3% in 2Q14. Capital formation also rebounded, rising by 3.6% in 3Q14, after falling by 2.4% in 2Q14. Growth was driven by the rebound of the construction as construction spending of the private sector increased by 15.7%, offsetting the 6.2% drop in construction spending of the public sector. By industrial origin, the manufacturing industry also remains strong with 3Q14 growth reaching 7.2%.

Maintaining positive long term growth outlook

Despite the disappointing 3Q14 GDP growth number, we maintain our positive longer term view of the economy. As discussed earlier, the weak 3Q14 GDP growth number was largely due to weaker government spending. Unlike in the past, this was not due to the weakness of government finances but rather delays in disbursement of funds. The said problem is easier to address in our opinion. Outside of the government, other drivers of economic growth remained strong. Consumer spending remained resilient, exports continued to pick up, while investment spending rebounded. The manufacturing and construction sectors also continued to grow significantly
- COL Financial

Monday, November 24, 2014

Ayala sees completion of Daang Hari-SLEX toll road no later than March next year

The Aquino administration's first public private partnership (PPP) project is set to open in the first quarter of next year.

In a briefing today, AC Infrastructure Holdings Inc president Noel Kintanar said construction of the Muntinlupa Cavite Expressway (MCX), formerly known as Daang Hari-SLEX Connection Road is scheduled for completion in the next three to four months.

The road will connect Muntinlupa City to Cavite through Bacoor. As of November, construction was over 60 percent complete.

Kintanar said the toll for the four-kilometer, four-lane road would be set at P17 for Class 1 vehicles, and P34 for Class 2 vehicles. Daily vehicle traffic at the toll road is expected to reach 50,000.

MCX would relieve traffic congestion along the Daang Hari Road and Commerce Avenue, giving commuters from the Cavite towns of Molino and Bacoor faster and easier access to the South Luzon Expressway.

The first PPP venture that the Aquino administration bid out, the Daang Hari-SLEX Link was supposed to have been completed in the third quarter of this year but the private contractor moved its timetable because of delays in securing a right of way with South Luzon Tollways Corp (SLTC). Controlled by San Miguel Corp, SLTC operates SLEX.

Both parties agreed on the interconnection only in December last year.

Ayala-owned AC Infrastructure bagged the project linking Cavite to Metro Manila through SLEX in December 2011.

The conglomrate invested around P2.2 billion in the project, which it will operate and maintain for 30 years.

The road will provide southern Metro Manila with a high-standard highway within a 200-kilometer radius of the Philippine capital and will serve as an alternative route to Cavite, decongesting traffic in some parts of the province and Las Pinas and Muntinlupa, specifically the Alabang-Zapote Road and Commerce Avenue.

- Interaksyon

Thursday, November 20, 2014

SM Prime to open 5 new malls next year

SM Prime Holdings Inc. (SMPH), the umbrella property firm of the SM Group, will continue growing its empire of malls with the planned opening of four to five new branches next year.

Jeffrey C. Lim, chief finance officer of SM Prime, said four of the five malls would be situated in the country, while one would open in China.

“We’re opening four or five, including Tianjin,” Lim said in an interview on the sidelines of yesterday’s ING Finex CFO of the Year Awards.

For the local sites, Lim cited Cebu and Cabanatuan as sure locations for the upcoming malls along with the planned expansion of its mall in Bulacan.

“Given the size that we have now, the new malls would increase our gross floor area (GFA) by another eight percent,” he said.

Over the long term, SM Prime earlier said it intends grow its malls to 85 (74 in the Philippines and 11 in China) with a GFA of 6.95 million square meters (sqm) in 2018.

SM Prime recently opened SM Center Angono in Rizal, its 50th mall in the Philippines.

SM Prime built its very first mall in 1983 on North EDSA and opened it two years after, starting with a GFA of only 125,000 sqm.

Among its 50 malls in the Philippines, three are included on the world’s 10 largest malls, one of which includes SM North EDSA.

The other two are SM Megamall and SM Mall of Asia. Together, these three malls have a combined GFA of 1.4 million sqm.

“We are committed to continue our expansion towards the provincial areas which remains our strategic direction in the Philippines. In almost 30 years, SM Malls have become an important element in every community. We will also continue to expand and improve the look and feel of our existing malls to keep them current and exciting for our customers,” SM Prime president Hans T. Sy said earlier in a statement.

- ABS-CBN News

Max's snags SEC approval of maiden share sale

The Securities and Exchange Commission (SEC) has cleared the share sale of Max's Group Inc, its first fundraising in the stock market since taking over Pancake House Inc.

In a text message, SEC commission secretary Gerard Lukban said the corporate regulator approved the P4.6-billion equity offering of the homegrown casual dining restaurant operator in a meeting today.

Documents from the SEC show Max's will sell 300.14 million shares at P15.33 apiece or 155.93 million shares at P29.50 each. However, the listed firm recently announced the reduction in the maximum price of its share sale to P21.75 per share.

BPI Capital Corp was tapped as bookrunner, issue manager and lead underwriter for the transaction.

Net proceeds from the primary component of the offering will fund the expansion of stores and commissaries, working capital and other general corporate purposes. Proceeds from the secondary share sale will be used to settle a portion of the debt incurred to pay for the acquisition of a controlling interest in Pancake House.

Max’s completed the takeover of Pancake House in February, acquiring 89.95 percent of the listed firm's outstanding capital stock to become the biggest player in the local casual dining restaurant category with an aggregate market share of 28.3 percent in terms of sales value for 2013.

In August, the SEC approved the capital stock hike of Pancake House, allowing the Max's Group of Companies to fold all its restaurant business under the listed firm. It now owns Max's Restaurant, Max's Corner Bakery, Krispy Kreme, Jamba Juice, Pancake House, Dencio's, Kabisera ng Dencio's, Teriyaki Boy, Sizzlin' Pepper Steak, Le Coeur De France, The Chicken Rice Shop, Singkit, Maple and Yellow Cab.

Brands under Pancake House suffered losses of P31.36 million in the first nine months of the year, a reversal of the net income of P116.11 million a year ago, as the Max's Group streamlined operations following its takeover early this year.

- Interaksyon

Thursday, November 13, 2014

Jollibee allots P9.1 billion for 2015 capex

Jollibee Foods Corp. (JFC) posted a 15 percent increase in its profit for the third quarter of the year on the back of higher revenues and improved operating margin.

JFC, the country's largest food service company, said its net income attributable to equity holders of the parent jumped to P1.17 billion for the third quarter of 2014 from the P1.02 billion posted in the same period last year.

Revenues reached P22 billion in the period, 11.6 percent higher than the P19.8 billion recorded last year.

Its operating margin improved to 6.4 percent this year from the 6.1 percent last year.

From January to September, JFC's net income attributable to equity holders of the parent surged 16.5 percent to P3.6 billion from the P3.1 billion in the same period in 2013.

JFC saw a 12 percent increase in its system wide sales, a measure of all sales to consumers, both from company-owned stores and franchised stores, as its Philippine business grew by 13 percent and the foreign business by 9.6 percent.

“The growth was driven by a 7 percent to 8 percent same store sales growth and a 5.7 percent growth in store network,” the company said in a disclosure to the stock exchange.

Same store sales growth refers to sales from restaurants that were already open for at least 15 months, excluding sales growth from new store opening.

For the first nine months of the year, JFC's sales rose by 13.6 percent consisting of a 13.4 percent domestic growth rate and a 14.5 percent growth abroad.

JFC operates the largest food service network in Philippines. The Jollibee Group opened 148 new stores in the first nine months of the year, of which 114 were in the Philippines and 34 were in foreign operations.

As of end-September, the JFC Group has 2,258 stores nationwide under the brands Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, and Burger King. It has a total of 2,849 stores worldwide.

2015 capex

JFC said its board of directors approved a capital expenditure budget of P9.1 billion for 2015, 42 percent higher than the estimated P6.3 billion spending this year.

The firm said that P6.7 billion of the amount will be spent for its operations in the Philippines, P1.7 billion for China and the balance for the US and Southeast Asia and the Middle East.

“The 2015 capital expenditures will be mostly for the store openings in the Philippines and foreign operations, store renovations in the Philippines and abroad, investments in commissary construction and commissary capacity increase in the Philippines,” JFC said.

It added that the investments will be financed by its cash reserves and cash expected to be generated from next year's operations.

- ABS-CBN News

Growth in Metro Manila leads increase in Manila Water's nine-month income

Higher billed volumes at its Metro Manila concession pushed up Manila Water Co Inc's earnings in the first nine months of the year.

In a financial report, Manila Water said its net income increased by 7 percent to P4.6 billion in the January to September period from P4.3 billion in the same nine months of last year.

The increase was driven largely by operating revenues growing by about the same level to P12.2 billion from P11.5 billion in 2013.

The bulk of Manila Water's operating revenues comprises water bills, which account for 79 percent of the total. The rest comes from environmental and sewer charges, connection fees, and management contracts.

The improved operating revenue was brought about by a 3.5 percent growth in the billed volume at the east zone concession of state-run Metropolitan Waterworks and Sewerage System.

The Ayala-led company derived 88 percent of its earnings from the MWSS concession.

Besides growth from its Metro Manila and Rizal operations, contribution from the utility's other domestic subsidiaries rose 48 percent year-on-year to P1 billion.

Likewise, Manila Water's subsidiaries in Vietnam --Thu Duc Water and Kenh Dong Water, together with Saigon Water Infrastructure -- contributed P263 million in earnings, up 27 percent from the previous year.

Manila Water aims to spend P5 billion this year for the rehabilitation and construction of facilities to improve water and sewer services in its MWSS concession area.

- Interaksyon

Tuesday, November 11, 2014

Filinvest Land profit jumps 19 pct in Jan-Sept

Gotianun family-led residential developer Filinvest Land Inc. (FLI) reported its 9-month consolidated net income rose 19 percent to P2.89 billion.

In a statement, FLI said its revenues grew by 27 percent to P11.82 billion from January to September, on the back of continued growth in its residential business and office leasing operations.

Real estate revenues jumped 31 percent in the 9-month period to P9.16 billion, driven by strong sales in its horizontal housing projects and medium-rise building projects under the "Oasis" brand and high-rise buildings such as "Studio Zen."

Revenues from rental assets increased 10 percent to P1.65 billion in the January to September period. This after FLI recognized additional revenues from its new office buildings “Filinvest One” and “Plaz@ E” at Northgate Cyberzone located in Filinvest City, Alabang.

"We believe that the rental business will provide the stability of revenue streams. This is why a significant amount of our capex will be earmarked for investment properties. We are targeting to increase our gross leasable area to about 995,000 square meters within five years, which is almost 3 times our current office and retail space inventory," FLI CEO and President Josephine Gotianun Yap said.

FLI said it is on track to launch P17.5 billion worth of residential projects this year. Among the projects launched so far is 100 West, a mixed-use development high-rise tower along Sen. Gil Puyat Avenue in Makati.

"We are confident of sustained growth for the company as we continue to launch new residential projects and execute our plans to increase offices as well as retail spaces in key locations nationwide," Gotianun Yap said.

- ABS-CBN News

Lower trading gains pull down Metrobank's nine-month profit

Nine-month profit at the country's second largest lender fell by a third from a year ago.

In a disclosure to the Philippine Stock Exchange, George Ty-owned Metropolitan Bank & Trust Co reported earnings of P15.534 billion in the January to September period, down 31 percent from the P22.713 billion in the same nine months of last year.

For the third quarter alone, net income however rose 73 percent to P4.728 billion this year from P2.725 billion last year.

Lifting third-quarter results was net interest income of P11.656 billion, a 12 percent increase from last year's P10.322 billion. Net interest income largely emanates from the bank's gains from its lending business less the cost of money lent out.

For the first nine months, net interest income rose by 23 percent to P34.015 billion this year from P27.595 billion in 2013.

The bank's loans and receivables portfolio increased by 14 percent to P697.3 billion at end-September this year from P611 billion at end-December last year. The increase was funded by a 9 percent uptick in low-cost deposits to P1.106 trillion from P1.016 trillion over the same period.

Metrobank said loan demand was strong among its commercial clients, including the middle market and SMEs. Despite the increase in lending, the bank's consolidated non-performing loan ratio of 1.12 percent at end-September was below the 1.39 percent last year.

“The robust core income growth reflects positively on our strategy. Our thrust is to maximize returns from traditional revenue sources while prudently managing balance sheet growth," said Metrobank president Fabian Dee.

Non-interest income, which includes gains from trading and fee-based income, climbed by nearly a third to P5.420 billion in the third quarter of this year from P4.128 billion in the same three months of last year.

Year-to-date, non-interest income rof P19.030 billion was still behind P32.722 billion a year ago when banks enjoyed strong trading gains.

“We remain optimistic about the prospects of the domestic economy. We are continuously building our capabilities, and we will accelerate our expansion into new growth areas, increase sales coverage and strengthen client relationships to ensure sustainable profitability and capital efficiency," Dee said.

Metrobank opened 31 local branches this year to bring the total to 887, still the largest in the industry.

- Interaksyon

Thursday, November 6, 2014

Community mall developer DoubleDragon's Jul-Sep bottom line balloons

DoubleDragon Properties Corp stayed on course to hit its income target for the year on the back of solid earnings in the third quarter.

In a disclosure to the Philippine Stock Exchange, the real estate joint venture of the founders of fast food giants Jollibee and Mang Inasal said it pocketed P253.8 million in the July to September period, significantly higher than the P15.5 million registered in the same period last year.

Quarter-on-quarter, DoubleDragon's profit quadrupled from the P63.1 million booked in the April to June period. Nine-month earnings ballooned to P337.8 million from P28.9 million a year ago.

While net income at end-September only accounts for 64 percent of the full-year target, DoubleDragon said it is on track to reach its P525-million earnings guidance for the entire 2014 as "sizable" revenues from existing and new businesses are expected to be recognized in the fourth quarter of the year.

"The company has maintained a strong market demand for its various projects and our whole team remains thankful for the continued support of everyone," DoubleDragon chairman Edgar "Injap" Sia II.

In addition, the property company noted that it is gaining momentum in executing its commercial and office projects in Metro Manila as well as community malls in key areas around the country.

So far, DoubleDragon has secured 13 sites for its CityMall chain, putting its subsidiary CityMall Commercial Centers Inc on track to meet the target of operating 25 community malls by end-2015, and 100 by 2020.

DoubleDragon is a 50-50 joint venture between Injap Investments Inc and Honeystar Holdings Corp. Jollibee founder Tony Tan Caktiong owns Honeystar, while Mang Inasal founder Sia II owns Injap Investments.

The company is beefing up its portfolio of developmental and recurring income-generating projects to generate a net income of P1 billion by 2016 and P4.8 billion by 2020, making it one of the biggest players in the local real estate scene.

- Interaksyon

Wednesday, November 5, 2014

Phoenix Semiconductor prices IPO below the ceiling

The local arm of one of Samsung's South Korean suppliers has set the price of its initial public offering (IPO) below the ceiling.

In a letter to the Philippine Stock Exchange, BDO Capital and Investments Corp president Ed Francisco said Phoenix Semiconductor Philippines Corp pegged the final offer price at P3.15 per share, allowing the company to raise P1.02 billion from the maiden share sale.

Including the oversubscription option, gross proceeds from the IPO will increase to P1.45 billion.

'We did not price at the maximum so there is an upside for investors," Francisco said. BDO Capital is the sole issue manager and lead underwriter of the offering.

The final offer price is equivalent to a price-earnings (PE) ratio of 9.5 times 2014 earnings, a source said. PE is a valuation tool that measures how much an investor is paying for every peso in earnings generated by a company.

Phoenix Semiconductor chief finance officer Kim Dong Joo had projected a growth of at least 10 percent in earnings this year from $4.24 million in 2013 on the back of a 16 percent expansion in revenues from $209.68 million last year.

The company is selling 459.39 million shares, including the 134.63 million shares to cover the oversubscription option. It will have a market capitalization of P6.82 billion after the offering.

The offer period will run from November 10 to 21. The shares will be listed on the Main Board of the PSE on December 1.

Net proceeds from the primary offer will be used to fund Phoenix Semiconductor's expansion program through the acquisition of machines, building improvement and the construction of a new facility within its 15-hectare area at the Clark Freeport Zone in Pampanga.

The expansion program will enable the company to serve new clients. At present, Phoenix Semiconductor serves only Samsung Electronics Co Ltd and its customers.

Phoenix Semiconductor is a unit of STS Semiconductor & Telecommunications Co Ltd. STS is 28.10 percent owned by Seoul-based Bokwang Co Ltd, which has businesses in leisure, retail, advertising and culture, financial services and manufacturing.

- Interaksyon

Tuesday, November 4, 2014

AboitizPower, Norwegian partner begin rehab of reservoir in northern Philippines

The joint venture of Aboitiz Power Corp and Statkraft Norfund Power Invest AS of Norway has broken ground for a new hydropower project in the provinces of Ifugao and Isabela.

In a disclosure to the Philippine Stock Exchange, AboitizPower said unit SN Aboitiz Power-Magat Inc (SNAP-Magat) and the National Irrigation Administration have commenced with the improvement of the latter's Maris Reservoir located between the said provinces.

The project aims to increase the storage capacity of the Maris Reservoir, which is used to irrigate nearby farmlands, and use the same for power generation subject to release protocols.

Emmanuel V. Rubio, SNAP president, earlier said the company aims to draw an additional 7 megawatts (MW) from the Maris Reservoir project, which is estimated to cost between $2.5 million and $3.5 million per MW to put up.

Work is scheduled to begin in January for completion by first quarter of 2016.

The Mariz Reservoir project would optimize releases from SNAP-Magat's 380-megawatt (MW) Magat hydropower plant.

Besides the project, the joint venture also plans to expand the Magat plant by another 115 MW once given the go signal by regulators.

The proposed expansion involves the use of the Magat Dam's provision for two additional penstocks or water intake gates; and the installation of a pump storage to generate additional electricity.

- Interaksyon

Listed shell company acquires a third of Marcventures

Bright Kindle Resources & Investments Inc was cleared to buy a third of nickel miner Marcventures Holdings Inc.

In a disclosure to the Philippine Stock Exchange, Bright Kindle, formerly Bankard Inc, said its board of directors approved the acquisition of 600 million shares in Marcventures, representing 32.94 percent of the miner's total issued and outstanding capital.

Bright Kindle and Marcventures have some common directors, including their chairman Cesar C. Zalamea and president Isidro C. Alcantara Jr, who was authorized to determine the price as well as the terms and conditions of the acquisition. Shares in the nickel miner fell 0.16 percent to close at P6.10 per share.

The transaction is up for shareholders' approval in a special meeting next month.

A group of investors led by RYM Business Management Corp took over shell company Bankard from the Yuchengco-owned Rizal Commercial Banking Corp (RCBC) and its subsidiary RCBC Capital Corp in a transaction coursed through Philippine Business Bank’s (PBB) Trust and Investment Center.

According to Marcventures’ latest regulatory filing, the trust unit of Alfredo Yao’s PBB owns 600 million shares in the listed firm.

After transferring all of its assets and liabilities including its credit card business to RCBC, Bankard changed its name to Bright Kindle Resources and Investments Inc and primary purpose to that of an investment holding firm.

Last month, Marcventures’ wholly-owned unit Marcventures Mining and Development Corp (MMDC) received a clearance from the Mines and Geosciences Bureaus (MGB) to resume its mining operations in Surigao del Sur.

In April, the MGB ordered MMDC to shut down operations for mining outside its approved area. MMDC holds a mineral production sharing agreement for a 4,799- hectare tenement located in Cantilan, Surigao del Sur.

- Interaksyon

Saturday, November 1, 2014

These 4 Philippine property stocks are worth buying now

Maybank ATR Kim Eng (ATRKE) has maintained an overweight rating on the property sector after the Bangko Sentral ng Pilipinas (BSP) brushed aside concerns of a real estate bubble.

"We think the latest statements by Governor Tetangco should help alleviate concerns not only about a property bubble but also that the central bank is acting to slow property lending..." Maybank ATRKE said in a research note.

Maybank ATRKE was referring to the recent remarks made by BSP Governor Amando Tetangco that there was no clear evidence of a bubble in the real estate sector, although prices or valuations in some segments have risen too fast.

"This confirms our view that last week's revised credit risk rules are neutral for the property sector as it introduces no new regulations for property lending," it added.

In recent days, the central bank unveiled a string of measures aimed at strengthening the local financial system, including capping the maximum loan value for mortgages at 60 percent. Previously, only universal and commercial banks were required to observe this cap, whereas other lenders could lend as much as 80 percent, thus requiring the borrower to put in the remaining 20 percent as equity.

Maybank ATRKE's top picks in the sector are Ayala Land Inc for its “brisk execution in residential sales and recurring income build-up," SM Prime Holdings Inc for its "leadership in retail and opportunistic stance on residential real estate,” and Megaworld Corp for its “top position in office space development and bigger land bank."

Maybank ATRKE also picked Filinvest Land Inc because its "price multiples have not yet caught up with more aggressive plans to build up its recurring revenue base."

"Share prices of these companies have only slightly recovered after the selloff with the confusion on [real estate mortgage] collateral value and [loan-to-value] ratio limit. We continue to view this as an opportunity to accumulate," it added.

- Interaksyon

Monday, October 27, 2014

Beverly Hills meets Alabang in Megaworld's latest township project

Megaworld Corp has launched a Beverly Hills-themed township development in Alabang.

In a briefing on Monday, Megaworld senior vice president Jericho P. Go said the company, through Global Estate Resorts Inc, is pouring P10 billion in the next five years to develop the 62-hectare Alabang West, its 15th township project in the country.

Located along Daang Hari, Megaworld will incorporate a Beverly Hills-themed lifestyle concept into its commercial and residential developments.

Alabang West will house an exclusive village offering 788 lots starting at P48,000 per square meter. Of the total number of lots, 150-160 lots were already taken up, said Megaworld Global Estate Inc vice president for sales and marketing Mary Rachelle I. Penaflorida.

Owned by billionaire Andrew Tan, Megaworld expects to sell out the lots ranging from 244 to 795 hectares in Alabang West in the next 6-12 months.

The Megaworld Group is looking at Alabang as the next business district, where land values are considerably cheaper compared to Bonifacio Global City.

"The demand is quite high because our track record is very phenomenal," Penaflorida said.

Megaworld started selling projects in McKinley Hill and McKinley West in Fort Bonifacio at P50,000 per square meter in 2005 and P75,000 per square meter in 2010. Current prices in those projects have grown significantly to P120,000 per square meter and P160,000 per square meter, respectively.

Despite rising interest rates, Megaworld continues to be upbeat on its outlook for the real estate sector because of its sizable land bank in accessible locations.

"Prospects are very bright for Megaworld and our affiliated companies. We are very market-driven. We probably would have thought a little more if we did not very well in Pahara, but we did very well in Pahara so we were encouraged to launch more projects," Go said.

Go was referring to Southwoods City's Pahara project, which is almost 90 percent sold since its launch in February this year. Lots in Pahara are now selling at an average of P19,000 per square meter from the initial selling price of P14,000 per square meter.

Located beside Alabang West Village is a 1.3-kilometer commercial and retail row, inspired by Hollwood’s famous Rodeo Drive.

The village will have a huge clubhouse complex with amenities that include badminton and basketball courts, function rooms, cabanas, game room, café and al fresco dining areas, a fitness center, pocket gardens, open space parks, infinity pool, among others.

Strategically located at the heart of Alabang’s high-end communities and golf course, Alabang West is accessible through the major access points of the South Luzon Expressway-Alabang Exit and the upcoming Daang Hari Exit.

- Interaksyon

Profit growth picks up pace for Meralco at end-September

Meralco's earnings rose in the high single-digits in the first nine months of the year on the back of demand from the industrial and commercial segments of its market.

In a media briefing, Betty Siy-Yap, Manila Electric Co chief financial officer, said the utility's nine-month net income increased by 7 percent to P14.3 billion from P13.6 billion in the same period last year.

Its core net income, which excludes onetime gains or losses, rose by about the same level.

The increase in profit was driven by a 2.5 percent hike in energy sales volume to 26,253 gigawatt-hours from 25,616 last year.

Sales in the first half of the year had been sluggish on account of the cooler weather, typhoons and energy conservation. Profit grew only by 2.1 percent to P9.6 billion from P9.4 billion in 2013.

Oscar S. Reyes, Meralco president, said the increase in electricity demand was led by a 3.9 percent growth in sales to industrial customers to 8,081 gigawatt-hours this year from 7,770 gigawatt-hours last year.

Fueling the increase were the food and beverage, basic metals, rubber, and plastics sectors.

Meralco's commercial accounts grew 3.1 percent from 9,965 gigawatt-hours to 10,278 gigawatt-hours on the back of higher demand from real estate, retail trade, and tourism.

"Residential was able to turn around from negative in the first six months with a pick-up in September to a little bit better than flat at 0.3 percent growth from 7,775 gigawatt-hours to 7,796 gigawatt-hours," Reyes said.

Meralco's customers grew by 4 percent year-on-year to 5.5 million in the first nine months, the highest growth in 15 years, he said.

Meralco chairman Manuel V. Pangilinan said core profit guidance for 2014 stands at P17.8 billion, which is 4.6 percent higher than last year's P17 billion.

- Interaksyon

Saturday, October 25, 2014

Del Monte Pacific sets fresh fund-raising to retire debt

Del Monte Pacific Ltd (DMPL) is selling preferred shares in December to settle debt incurred for the acquisition of the company that owns the Del Monte brands rights in the United States and South America.

In a preliminary prospectus filed with the Securities and Exchange Commission, the fruit canner and grower said it is raising $360 million from the sale of 36 million preferred shares at an offer price of up to $10 per share. The shares have a par value of $1 apiece.

Dividend on the preferred shares will be at a fixed rate of 5.25-7 percent per annum

The share sale will commence on December 3 or 8 and end on December 12. The shares will be listed on the Main Board of the Philippine Stock Exchange (PSE).

BDO Capital & Investment Corp was tapped as the issue manager, lead underwriter and book runner of the offering.

Estimated net proceeds of $351.41 million will be used to refinance a $350-million bridge loan from BDO Unibank Inc and the balance will be allotted to partially repay a $15.6-million short-term loan from Metropolitan Bank & Trust Co.

The loans were used to partly bankroll the acquisition of US-based Del Monte Food Corp's consumer food business, which was renamed Del Monte Foods Inc (DMFI), and offer-related costs. DMPL purchased DMFI last February for $1.68 billion.

The preferred share sale is part of a series of equity fundraising initiatives aiming to reduce DMPL's borrowings by approximately $520 million. After the planned preferred share sale and recently completed sale of common shares, the company will undertake a rights offer.

DMPL completed this week a P93.50-million fund-raiser through the issuance of common shares, also to partially repay short-term debt used for the acquisition of DMFI. The share sale was oversubscribed, the company said in a disclosure today.

The target date of listing of the common shares on the PSE and the Singapore Exchange is on October 30.

DMPL lost $21.9 million in the May to July period, which corresponds to the first quarter of the fiscal year of DMFI, due to higher interest expense.

- Interaksyon

Lucio Co holding firm acquires Laguna property for second community mall

The holding firm of businessman Lucio Co has acquired another property for its planned chain of community malls.

In a disclosure to the Philippine Stock Exchange, Cosco Capital Inc said its subsidiary Ellimac Prime Holdings Inc inked yesterday a deed of absolute sale to purchase a 3,192 square meter lot located at A. Mabini St., Poblacion in Biñan, Laguna.

The newly secured land is the second site of Cosco's community mall after signing a lease contract last Monday for a property in Marikina.

It is also one of as many as four locations that Cosco intends to secure before yearend, allowing the firm to hasten the expansion of its community mall chain.

Cosco had said it plans to build 6-8 community malls in two to three years through organic expansion and acquisition. The commercial centers will carry the brand name Cosco with Puregold as the anchor tenant.

Early this year, Cosco acquired NE Pacific Shopping Centers Corp, the owner of NE Pacific Mall, the largest commercial area in Nueva Ecija.

Formerly Alcorn Gold Resources Inc, Cosco became the holding firm for Co's consumer-focused businesses after a P74.81-billion share-swap transaction. It has interests in retail through Puregold, liquor distribution, oil storage and real estate.

Likewise, Cosco completed the acquisition of Office Warehouse Inc and Liquigaz Philippines Corp to boost its non-food specialty retail business.

- Interaksyon

Thursday, October 23, 2014

Investment community talks up Philippines' economic prospects

Addressing infrastructure bottlenecks will be key for the Philippines if it were to remain one of the brightest spots in Asia, according to participants of the Philippines Investment Conference.

Timothy Moe, chief Asia Pacific regional equity strategist for global investment research at Goldman Sachs, said the long-term growth prospects of the Philippines are among the best in Asia on a trend basis, citing the huge potential to improve productivity and investment accumulation because of the large population and young demographics.

"When you look at the five-year potential average growth rates of the economy, the Philippines is one of the top four in Asia outside China," Moe told participants of the conference organized by the CFA Institute on Tuesday.

However, supply-side constraints will remain a problem for the Philippines and other Asian nations, which have underinvested in infrastructure in the past several decades. Reallizing this, the government recently revived its infrastructure push to include roadshows outside the country to draw in investors.

"If there is potential for appropriate investment in infrastructure, there is significant productivity gains we can derive from that," Moe said.

The Philippine economy expanded by 6.4 percent in the second quarter, recovering from the 5.8 percent in the January to March period, to bring the six-month tally to 6 percent and become the second fastest-growing nation in Asia.

"The port congestion in Manila has underscored the need to accelerate infrastructure development as it plays a critical role in supporting economic performance and upholding confidence in international businesses to partake in local industries," said Finance Undersecretary Jose Emmanuel Reverente.

The Aquino administration has tapped the private sector to accelerate infrastructure development through the public-private partnership (PPP) scheme.

Despite a slow start, the rollout of projects is already picking up, said PPP Center executive director Cosette Canilao, citing the award of eight infrastructure projects worth P127.5 billion since the program took off four years ago.

"Momentum is here already," Canilao said.

The National Economic and Development Authority, which President Benigno Aquino S. Aquino III chairs, last week approved 12 more projects worth a combined P180 billion.

"We now have a very good PPP platform. The appreciation of the local private sector on how to do PPPs has improved a lot. There is an understanding between the government and the private sector on how we do our biddings and finalizing the terms of concession agreements. We now have a proven process," Canilao said.

Department of Public Works and Highways Secretary Rogelio Singson said the government is also investing heavily in the countryside, pouring in 30 percent or P63 billion of the proposed P288-billion budget in Mindanao, excluding calamity and Bangsamoro funds.

“Metro Manila is not the Philippines,” Singson said.

For 2013-2016, the government has lined up 952 projects with total investment requirements of P2.06 trillion or $46.69 billion.

The Aquino administration plans to hike infrastructure spending to 5 percent of gross domestic product by 2016. At present, infrastructure spending stands at only 2.2 percent of GDP.

The current regime of low interest rates and predictable inflation, among others, are elements that will support funding for infrastructure project, thus, sustaining the economy’s higher growth trajectory, said Bangko Sentral ng Pilipinas Deputy Governor Diwa Gunigundo.

"We have been able to institutionalize many of these initiatives to make sure the macroeconomy is conducive to sustaining the conditions that will help provide funding and confidence in favor of promoting infrastructure," Gunigundo said.

With better infrastructure, the Philippines can unlock its full potential, allowing corporates to grow by an average rate of 15 percent or higher, Moe said.

"If that happens, stock markets will go up," he said.

- Interaksyon

Tuesday, October 21, 2014

IMI clarification of news reports

Security Name : Integrated Micro-Electronics, Inc.
Date : 10/20/2014
Headline : C05467: IMI clarification of news reports
Content : This is to clarify the news article entitled “IMI eyes 20% hike in capex” posted in Malaya Business Insight (Internet Edition) on October 20, 2014. The article reported in part that: “Integrated Micro-electronics, Inc., (IMI) eyes to increase its capital spending for next year as the company banks on the growth prospects of the firm both locally and overseas. Market sources said the company is looking at a 20 percent increase in capex from last year’s $27 million to expand its growth businesses in the automotive, industrial, medical, and telecommunication industries. ....” There was neither a disclosure nor a statement that the Company eyes 20% hike in capex for next year.


Sunday, October 19, 2014

Fitch keeps credit scores, outlooks for PLDT, Globe

Fitch Ratings has affirmed the credit ratings of the country's two largest telecommunication companies amid benign competition and regulatory risks.

In a statement, the London-based debt watcher said it affirmed Philippine Long Distance Telephone Co's (PLDT) long-term foreign currency issuer default rating (IDR) and senior unsecured rating at 'BBB'.

The long-term local-currency IDR and national long-term rating were affirmed at 'A-' and 'AAA(phl)', respectively.

The outlook is stable on all the issuer ratings.

"PLDT's ratings benefit from its position as the largest telecom operator in the Philippines with 57 percent revenue market share in mobile and broadband, and a 70 percent subscriber market share in fixed-line," Fitch said.

Fitch expects PLDT's leverage to rise due to continued capital expenditures, and its $445 million investment in Rocket Internet AG, which is unlikely to contribute to the Philippine telco's earnings over the next three years.

Fitch also kept Globe Telecom Inc's long-term foreign- and local-currency IDRs at 'BBB-'.

The senior unsecured and national long-term ratings were also affirmed at 'BBB-' and 'AAA(phl)' respectively. The outlook is stable on all the issuer ratings.

Fitch said Globe's revenue is likely to rise by the mid-single digits in 2015, greater than PLDT's growth given the Ayala-led telco's higher proportion of smartphone users. Globe "is investing much more aggressively than PLDT even though its revenue is only 60 percent of the latter's, with capex of P29 billion in 2013 compared with PLDT's P28.7 billion," Fitch said.

- Interaksyon

Wednesday, October 15, 2014

Del Monte Pacific to sell shares at a discount

Del Monte Pacific Co Ltd has priced its follow-on offering way below the ceiling, amid a worldwide sell down of equities on concerns over anemic global economic growth.

In a disclosure to the Philippine Stock Exchange, the fruit grower and canner said it would raise P93.50 million from the sale of 5.5 million new shares after setting the offer price at P17 per share.

The price represents a premium of 1.65 percent to the volume weighted average price for trades done on both the PSE and the Singapore Exchange Securities Trading Ltd on Tuesday, but is a discount of 1.85 percent to the PSE closing price of P17.32 per share.

Del Monte Pacific earlier set a maximum price of P22.84 per share. World markets, including the Philippines, have succumbed to heavy selloffs in recent days on worries over the outlook for global economic growth.

The offering will commence on Thursday and will run until October 22. The shares will be listed on the PSE on October 30.

Del Monte Pacific tapped BPI Capital Corp as the lead underwriter for the offering.

Net proceeds of P79.95 million will be used to partially repay short-term debt used for the acquisition of the company that owns the Del Monte brand rights in the United States and South America.

Del Monte Pacific lost $21.9 million in the May to July period, which corresponds to the first quarter of the fiscal year of Del Monte Foods Inc (DMFI), due to higher interest expense from a long-term credit used to acquire DMFI and a short-term bridge loan.

The Philippine firm completed the acquisition of DMFI for $1.68 billion in February, giving it a presence in the world's biggest market.

- Interaksyon

Sunday, October 12, 2014

Manila Water, Security Bank sign P650-M loan for Boracay unit

Manila Water has tapped a P650-million loan from Security Bank Corporation to improve its services in Boracay Island.

Manila Water signed a Third Omnibus Loan and Security Agreement with Security bank to "finance the capital expenditures of Boracay Water in fulfillment of its service obligations in the island of Boracay," the parent company said in a disclosure to the Philippine Stock Exchange.

Boracay Water is a unit of Manila Water.

Established by Ayala Corporation, Manila Water primarily serves the East Zone of Metro Manila.
Its service area straddle parts of Quezon City, Makati, Taguig, Pateros, Marikina, Pasig, San Juan, Mandaluyong, the southeast of Manila, and Rizal province.

Raffy Cabristante/VS, GMA News

Fed officials say global slowdown could push back U.S. rate hike

Federal Reserve officials on Saturday took stock of a slowdown in the global economy and said it could delay an increase in U.S. interest rates if serious enough.

Most notably, Fed Vice Chairman Stanley Fischer said the effort to finally normalize U.S. monetary policy after years of extraordinary stimulus may be hampered by the global outlook.

"If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise," he said at an event sponsored by International Monetary Fund.

Nevertheless, he said betting in financial markets on the timing of a U.S. rate hike appeared "roughly" on the mark given the Fed's current expectations on how the economy's recovery would unfold.

The IMF trimmed its global growth forecast ahead of its fall meetings this weekend, where discussions focused on ways to stimulate global demand and prevent the euro zone from slipping back into recession.

"I am worried about growth around the world, there are more downside risks than upside risks," Fed Governor Daniel Tarullo said at a conference the Institute of International Finance sponsored on the sidelines. "This is obviously something we have to think about in our own policies."

Chicago Federal Reserve Bank President Charles Evans said a strengthening of the dollar and weak growth abroad could mean slower inflation in the United States, and less justification for the U.S. central bank to raise rates.

The renewed concerns about Europe could represent a serious complication for the Fed, which had been expected to begin bumping up benchmark borrowing costs in the middle of next year.

Fischer spoke in part to calm concerns among developing nations about a potential tightening in U.S. monetary policy, saying the Fed would only move rates higher if the U.S. economy was ready for it. Overall, he said, rising borrowing costs in the United States were unlikely to disrupt flows of capital and investment around the world.

"The normalization of our policy should prove manageable," Fischer said. "We have done everything we can, within the limits of forecast uncertainty, to prepare market participants for what lies ahead."

"In determining the pace at which our monetary accommodation is removed, we will, as always, be paying close attention to the path of the rest of the global economy and its significant consequences for U.S. economic prospects."

Large developing nations like India and Brazil have been concerned a rise in U.S. rates could suck investment away from their economies, just as they earlier criticized the Fed's bond-buying stimulus as a "currency war" that caused a fast increase in their currency values.

Fischer said in the keynote IMF address that the Fed's crisis programs, which pumped trillions of dollars into global markets, have on the whole benefited the rest of the world.

"The net effect on foreign economies appears to be both modest in magnitude and most likely positive, on net, for most countries," he said.

In addition, he said U.S. central bank officials have given national governments and investors plenty of time and clear signals to prepare for a shift in policy.

The Fed is "going to great lengths to communicate policy intentions," Fisher said. "Markets should not be greatly surprised by either the timing or the pace of normalization."

- Interaksyon

Friday, October 10, 2014

Delisting of Chemrez looms after nearly all its shares are sold to DNL

D&L Industries Inc (DNL) completed the acquisition of shares of listed affiliate Chemrez Technologies Inc held by minority stockholders.

In a disclosure to the Philippine Stock Exchange, the food additive maker said it now owns 1.30 billion common shares or 99.7 percent of Chemrez.

Based on the report made by IGC Securities, the tender offer agent, a total of 846.41 million shares had been tendered, representing approximately 65 percent of the issued and outstanding shares of Chemrez.

Prior to the tender offer, DNL held 34.7 percent of the country's leading manufacturer of oleochemicals, resins, and specialty chemical products.

The tendering shareholders will be paid P6 in cash for every share they own for an aggregate cost of P5.08 billion. Short-term borrowings will finance bulk of the acquisition.

“Pre-acquisition, we were net cash. Further, short-term borrowing costs are currently very low - much lower than the overnight or SDA rates – and there are no indications of interest rates going up anytime soon. Hence, there does not seem to be any urgency to refinance and it is possible to just live with debt as short-term,” DNL executive vice president and chief finance officer Alvin D. Lao said.

DNL had a net cash position of P1.45 billion and negative gearing of 0.16x at end-June.

The tendered shares were crossed at the PSE on Tuesday. Settlement will be on Friday.

“In view of the minimum public ownership rule of the Philippine Stock Exchange, DNL would most likely cause the voluntary delisting of Chemrez with the latter’s public ownership falling below the minimum 10 percent,” DNL said.

DNL aims to broaden Chemrez's product portfolio, beef up its capabilities, including cash generation, and boost growth as the specialty chemicals business continues to improve.

DNL is engaged in product customization and specialization for the food, plastics, and aerosol industries. The company's profit rose 22 percent year-on-year to P799 million in the first half of this year, from P655 million in 2013 on stronger volumes across all its businesses.

- Interaksyon

Sunday, October 5, 2014

Security Bank eyes partnerships with foreign companies

Security Bank Corp is open to forging ties with foreign firms, but has no plan of selling equity to them.

"We're open to strategic alliances. It does not necessarily have to follow that a strategic alliance will result in economic interest in the bank," Security Bank president Alberto Villarosa told reporters on Thursday night.

Security Bank has "no plan" to sell equity to a strategic investor as it is well capitalized, Villarosa said.

The local bank has tied up with Marubeni Corp of Japan for its leasing business, while the research reports of SB Equities are co-branded with CIMB of Malaysia, he said.

Several regional banks are looking at the Philippines, with bulk of its population unbanked, for expansion in light of the Asean integration.

Security Bank is also looking to beef up its retail business so it can be a strong contributor in the next three to four years, Villarosa said.

The lender is looking at new areas or sites where it is under represented, particularly in areas like Cebu and Davao, to expand its branch network. It is opening 3-4 more branches before yearend.

"We’re really looking at a model where a corporate bank, the commercial bank and the retail bank will be equal contributors to the business and we’re getting there," Villarosa said.

Security Bank more than doubled its earnings to P3.61 billion in the first half of the year from the P1.7 billion reported in the same period in 2013 following a 46 percent year-on-year growth in net interest income.

In the first semester, the bank expanded its loan book by 30 percent to P173 billion while deposits increased by 22 percent to P218 billion. The investment securities portfolio jumped 106 percent to P111 billion.

Security Bank had a network of 253 branches and 444 ATMs at end-June.

- Interaksyon

PAL ties up with Japan's All Nippon Airways

A Japanese airline has entered into a commercial agreement with Philippine Airlines (PAL) that would pave the way for the expansion of their operations.

In a statement, All Nippon Airways (ANA) and PAL announced that they have agreed to establish a commercial partnership covering areas such as code-share and frequent flyer programs, subject to necessary government approvals.

The agreement will benefit customers of both airlines by providing them with greater choice and flexibility. The code-share between the two countries is due to commence on October 26, with reciprocal frequent flyers programs between ANA and PAL to begin at the same time.

ANA added its new service between Haneda International Airport and Manila International Airport starting March, while PAL launched a daytime service. PAL and ANA will have a combined 74 flights a week between the Philippines and Japan.

Under the code-share, ANA will add its “NH” designator code to PAL-operated flights not only between Japan and Philippine but also within Philippines flights.

PAL will also add its “PR” designator code to flights between Japan and the Philippines and to domestic flights within Japan operated by ANA.

Passengers between Japan and the Philippines will also be able to take advantage of through check-in reducing minimum connection times at Manila airport from 120 minutes to 90 when connecting to onward domestic flights.

- Interaksyon

Tuesday, September 30, 2014

COL Model Portfolio As of September 30, 2014

COL Model Portfolio as of September 30, 2014

TickerCompany NamePriceRatingFVBelow

Banks and Financials


Commercial and Industrial