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Tuesday, July 19, 2016

3 more firms may tap IPO market this year - PSE President Sicat

Three more companies in the manufacturing and industrial sectors may tap the IPO market this year, following Golden Haven and Cemex Holdings Philippines, PSE President Hans Sicat told Bloomberg TV Philippines.

“Directly in our pipeline are about three more in addition to the Cemex offering. Meaning, in different stages of preparation that we know of. There have been more discussions of others but I’m not sure where they are in the process,” Sicat told Bloomberg TV Philippines.

Golden Haven, the first memorial park to list in the local bourse, raised P790 million from selling shares for the first time to the public last month. It re-opened the IPO market after a seven-month lull. Cement maker Cemex followed Golden Haven and raised P21.84 billion pesos. Cemex will list in the PSE on Monday, April 18.

With the revitalization of the IPO market, other forms of share sales including private placements are also taking off, Sicat said at the sidelines of Security Bank's 65th year anniversary celebration Wednesday night.

“We're hoping by the way that in general it'll be more fundraising; maybe not just IPOs. There's a lot of private placements and follow-on offerings. We've said that we hope to target a total of P200 billion worth for this year. Of course most of these will be coming in the second half (of this year). If the pace is very active then I think we'll be able to meet that (P200 billion fund-raising forecast). There's a lot of optimism right now,” he said.

Investor concerns about the May presidential elections and volatile global markets prompted some companies to hold off their IPO plans earlier this year. But with the May 9 polls over, and with global markets stabilizing after Brexit and signals from the Fed that it won’t raise rates anytime soon helped calm investor nerves.

Sicat is also upbeat about the local stock market after the PSE index reached 8,000 levels for the first time this year on Wednesday. Volume of transactions has also picked up, he said.

“It’s always hard to predict (where the PSEi will settle). For us, probably the bigger news is volumes are back,” said Sicat. “We're just essentially where we were before the market volatility started and it means that there's more activity and interest in the market from both local and foreign investors.”

The local bourse ended flat yesterday at 7,944.02, after hitting an intra-day high of 8,005.73 in the early morning trade. Some analysts are predicting the index may end the year at 8,200.

- Interaksyon

Tuesday, April 5, 2016

DMCI Group sets record P40-B capex for 2016; eyes expansion abroad in 5 years

Diversified engineering conglomerate DMCI Holdings Inc. (DMC) is more than doubling its capital expenditure (capex) to over P40 billion this year, mainly to support the growth of its real estate and power generation businesses.

“This is our biggest annual capex program to date. There is still considerable room for growth in the property market and power industry so we are focusing our resources on these areas,” said DMCI Holdings Chairman and President Isidro A. Consunji.

Consunji told reporters that the conglomerate is increasing capital spending as part of its overall goal “to go for another level of growth in the next five years” or up to 2020.

“One of the options is to go abroad or to expand into other industry,” he said. “Six to seven percent (growth) a year is a lot of opportunity. Infrastructure will still be big, that's my opinion.”

Consunji believes that infrastructure has significant effects on the growth of other sectors.

With this, he is optimistic the contribution of construction to the conglomerate’s income will again increase after five years.

Power and coal mining now comprise the biggest share of its income, while construction accounts for only 5 percent.

Meanwhile, real estate subsidiary DMCI Homes will account for the biggest chunk of the capital spending at P32.5 billion in 2016.

Of this amount, P27.5 billion pertains to total development cost of new projects to be launched this year while the remaining P5 billion will fund land acquisitions.

Among the big projects of DMCI Homes for this year is a high-end condominium located in Asia World, Paranaque City, which will be the company’s first luxury residential development. It will also begin developing its first mixed-use building in Makati City.

Plans are also underway for the mid-segment developer to expand outside Metro Manila and enter the low-cost housing market.

The DMCI group is also spending around P7.2 billion for its energy projects under Semirara Mining and Power Corporation (SMPC) and DMCI Power Corporation (DPC).

Integrated energy company SMPC is setting aside P5 billion for equipment acquisition and facilities improvement.

Off-grid power supplier DPC plans to spend over P2.2 billion for power plant construction and equipment acquisition.

D.M. Consunji Inc. (DMCI) and DMCI Mining Corporation are setting aside around P700 million for the acquisition of additional equipment and machineries to support their operations.

DMCI is participating in a number of infrastructure projects this year, either as a bidder or contractor.

Meanwhile, DMCI Mining plans to increase its nickel output to help weather the slump in commodity prices.

- Interaksyon

Sunday, January 24, 2016

Philippines secures another credit-rating upgrade

The credit image of the Philippines got another boost after NICE Investors Service cited its governance reforms and intensified campaign for infrastructure development.

NICE upgraded the country’s credit rating by a notch from the minimum investment grade of BBB- to BBB. The move has tightly secured the Philippines’ place within the investment-grade territory.

In a statement released Friday, NICE, which is based in South Korea, said the upgrade was anchored on “improved government transparency as well as enhanced environment backed by expanded infrastructure and social overhead capitals in the form of public-private partnerships.”

The upgrade came amid sustained rise in infrastructure investments, with the state budget for infrastructure rising to 5 percent of GDP this year from 1.8 percent in 2010.

Also, infrastructure contracts amounting to $4.8 billion have been awarded to private-sector investors since 2010 under the Public Private Partnership (PPP) program, making the Philippines one of the most active infrastructure markets in the ASEAN.

The Philippines’ new credit rating with NICE is assigned a “stable” outlook, indicating it may stay the same at least over the short term despite challenges posed by external developments.

Compared with peers, NICE said, the Philippines is seen to be more resilient to shocks, including the impact of a slowing Chinese economy and market volatility arising from higher interest rates in the United

“Considering its [Philippines] trade structure and strong FX [foreign exchange] liquidity, the impact of global economic uncertainties such as slowdown of the Chinese economy and US interest rate hike will be manageable,” NICE said.

The credit watchdog expects the Philippines to sustain a robust economic growth of 6.3 percent over the short and medium term.

Meantime, economic officials welcomed the latest credit-rating upgrade, which marks the 24th positive rating action for the Philippines under the Aquino administration (9 outlook changes to “positive” and 15 actual hikes in credit ratings from various agencies).

“The string of favorable actions from credit rating agencies, the latest of which is from NICE Investors Service, resonates the process of economic strengthening that the Philippines has undergone over the years. Contributory to this process were forward-looking monetary policy, proactive bank supervision, and prudent external accounts management, which have played crucial roles in promoting a stable
inflation environment and a strong financial system,” BSP Governor Amando M. Tetangco, Jr. said.

Finance Secretary Cesar V. Purisima remarked, “Virtuous cycles result from dogged discipline, even when political headwinds seem too strong. Expanded fiscal space has opened up a Pandora’s box of opportunities in infrastructure, allowing us to play a fast game of catch-up with our neighbors.”

“With increased transparency, we have empowered citizens who participate in the process of governance, and who—having known the gains reforms can bring—will refuse to roll back progress,” he added.

Purisima also noted that with this latest credit rating action from NICE, Fitch Ratings remains the only agency that assigns the minimum investment grade to the Philippines. The others assign higher ratings.

Investor Relations Office (IRO) Executive Director Editha L. Martin said upgrades in credit ratings have provided concrete benefits for the economy, including improved business confidence and reduced borrowing cost for the government. The latter has contributed to lower commercial lending rates for consumers and businesses as well, thus fueling consumption and investments.

“Having reaped the gains of investment grade sovereign credit ratings, there should be no room for the economy to slide back. The Filipino people, as it is incumbent upon them, are expected to demand from our leaders the kind of governance that will ensure that the economic transformation of the Philippines over the last half decade transcends changes in political settings,” Martin said.

- Interaksyon