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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