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Market Outlook

DAVAO CITY—Malaysian investors began this week their talks and selection of probable location of their businesses here and other parts of Mindanao after they committed last year P23 billion in investments in industrial and agriculture.

Secretary Lualhati Antonino, chief of the Mindanao Development Authority (MinDA), said the Malaysians came in separate groups, one with interest in car distribution, the other group with an eye on palm oil.

The Tan Chong group, Malaysia’s biggest car distributor, arrived on Tuesday and talked with city government investment officials and studied the location of an industrial park north of downtown. The other group, organized by the Putrajaya Chamber of Commerce and Industry, also talked with local government and business officials on Thursday, and did business matching with local business owners.

The Tan Chong group has indicated it may build a car-manufacturing and distributorship business in Mindanao, and was given a tour of the First Industrial Business Park within the Lapanday Properties in Mandug and Tigatto area.

The business park was part of the township project of the Lorenzo-owned Lapanday Properties.

The Putrajaya business chamber gathered 15 of the biggest investors in consumer and agriculture products.

Antonino said the three biggest palm oil producers in Malaysia joined the business chamber’s group.

In the November business networking forum in Kuala Lumpur organized by the MinDA and the Philippine Embassy, Malaysian investors committed to put up businesses in Mindanao with an aggregate value of P23 billion. They said they would still be looking at the prospects and location.

“Those interested in palm-oil plantation, they were looking at 68,000 hectares to plant them,” she said. Although some would scout areas in the Agusan provinces, where Mindanao’s first palm-oil plantation was established in the 1980s, the others preferred to go to the Moro-populated areas, Romeo Montenegro, chief of the investment promotion and public affairs unit of MinDA, earlier said in a press conference on Monday.

Antonino said they would await the final decision of the Malaysian investors after their visits here this week.

http://businessmirror.com.ph/index.php/news/top-news/8250-malaysians-invest-p23b-in-mindanao
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Comments

  • Paltry Recovery
    Friday, January 25, 2013

    Philippine shares finished the week with slight gains recovering from a two-day slump due to profittaking.

    The Philippine Stock Exchange index (PSEi), which is the bellwether of blue chip stock prices,inched up by 28 points (0.46%) week-on-week, to close at 6,167. The broader All Share index increased by 23 points (0.59%) week-on-week to 3,885. Average value traded was lower this week and foreigners were net buyers.

    Over the U.S., corporate earnings and favorable legislation on the debt ceiling overshadowed the downbeat tone of the International Monetary Fund (IMF). The IMF reduced its global growth forecast to 3.5% from 3.6% previously. They also expect the European region to contract due to the looming debt
    crisis. U.S. corporate earnings, which came in better than expected, provided a breather to the IMF's outlook. Investors were also cheering the recent legislation of the U.S. Congress which suspended debt ceiling talks until May, in order to accommodate budget talks. Local investors also kept in mind the recent meeting of the Bangko Sentral ng Pilipinas (BSP). The central bank maintained overnight borrowing and lending rates at 3.5% and 5.55%, respectively. Special Deposit Account (SDA) rates were trimmed to 3% from 3.65% previously. Inflation projections for 2013 were reduced to 3% and 2014 estimates were upgraded to 3.2%.

    Some notable individual issues made headlines this week, thus causing share prices to move abruptly. Metro Pacific Investments Corp. (PSE: MPI) is down 2.79% week-on-week as it concluded a recent equity placement. Philex Mining Corp. (PSE: PX) slumped 4.73% after being fined again for the Padcal tailings
    spill. The Pollution Adjudication Board imposed P92 million worth of fines due to the mining firm's several violations. Philippine National Bank (PSE: PNB) increased 7.26% week-on-week. The Lucio Tanled bank's merger with Allied Banking Corporation will take effect in February. Philippine Long Distance
    Telephone Co. (PSE: TEL) fell back to 2,820 (0.71% week-on-week) after hitting as high as 2,910 during the start of the week. TEL has been trending upwards since the Securities and Exchange Commission (PSE: SEC) favored a lighter restriction on foreign ownership.
  • MARC TP Update
    Monday, January 28, 2013


    We revise our target price for Marcventures Holdings Inc. on a number of factors. Share price took a fall last year as nickel price went down in the global market. Prolonged mining legislation on revenue sharing and other administrative and environmental concerns took a toll on mining issues and MARC was no exception. Although higher production resulted to 10 shipments on its first nine months, its share price still declined.

    However, we are seeing a recovery in nickel as spot price went up to $17,260 this month from $15,955 of November last year. Shipments also rose on account of full year operation and higher production last year. In the nine months period, MARC shipped a total of 521,675 Wet MT. As we have updated their Reserve estimate by deducting the amount of nickel shipped, we have determined the remaining value of ore on the 120 hectares they
    are currently mining. Interestingly, MARC also disclosed today a Competent Person's Update on the saprolite and limonite resources which showed higher grades of Measured and Indicated Resource compared to the 2010 published study.

    Based on our updated estimate on MARC's EV to Value of Ore ratio of 0.05, which remains undervalued compared to local and regional peers, we revise our TP to P3.88/share or a 92% upside from current price of P2.02. This valuation is based on the estimates on the 120 hectares that MARC is currently mining out of the total MPSA-covered 4,799 hectares.
  • Philex Petroleum press release: "SC72 Licence Extension" (PSE - 01/28/2013)


    Forum Energy, the UK incorporated oil and gas exploration and production company with a focus on the Philippines, today confirms that the Philippine Department of Energy has granted the Company's request for an extension to the second sub-phase of Service Contract 72 ("SC72"). The deadline for completion of the second sub-phase, comprising the drilling of two appraisal wells, has now been extended by two years to 14 August 2015. Further details regarding the Company's plans for SC72 will be made in due course, as and when appropriate.
  • SM Development Corporation (PSE: SMDC)
    Tuesday , January 29, 2013


    Riding along the secular bull market, property developer SM Development Corporation (PSE: SMDC) has more room for upside as shown by its near-term chart pattern. SMDC's price chart has been forming an ascending triangle since December and we are bullish that a breakout is imminent in the coming days. We recommend a trading buy for SMDC with an entry price of 5.98 which is the next higher low of the stock's support. Volume of the stock is gradually building-up while technical indicators show positive divergence despite the flattish ascend of the Relative Strength Index. Breakout is seen at 6.06 that leads to a target price of 6.20.
  • East West Banking Corporation (PSE: EW)
    Wednesday, January 30, 2013

    Before we set our eyes on the Philippine Business Bank's (PBB) debut to the local market this February, let's look back on last year's addition to the Financial subsector. East West Banking Corporation (PSE: EW) was dubbed as a 'growth story'; from its initial public offering price of 23.50, it has gone up today at 30.90. EW began exhibiting an uptrend last September which is closely tracked by its 50-day exponential moving average. However, technical indicators show negative divergence as the weak Relative Strength Index may pull further EW and retest its support. Higher lows are expected based on EW's uptrend channel.

    We think that this is an opportunity for investors to buy EW at an entry price of 30.40. This translates to a near-term target price which is EW's resistance at 34.00.

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  • A Temporary Reprieve
    Thursday, January 31, 2013

    After reaching new high levels successively, blue chip issues took a rest today which resulted to the PSEi closing -0.45%; down to 6,242.74. Stocks that dragged the index lower are MER (-3.14%), MEG (-3.44%), and BPI (-5.66%) which were the strongest gainers in the past days. We see today's drop as a temporary rest or a technical correction after a strong and bullish run since late last year.

    Meanwhile, GDP for Q4 2012 registered a growth of 6.8%. This brought full year GDP to 6.6%, exceeding the government's target of 5-6%. Despite the good news, the PSEi still declined.

    We maintain our BUY rating for Metrobank (PSE: MBT) due to impressive earnings growth, attractive valuation relative to local and regional peers, and economic backdrop which is favorable for the company. Closing price of P105.40 today presents a good entry point for investors, offering a 30% upside to our medium term target of P137.10/share.

    More keypoints of our Metrobank study is available in our site. Meanwhile, we see no harm in its pull back today. Technical indicators such as RSI and stochastics still point to a share.
  • KuyaDannyKuyaDanny Moderator PEx Moderator
    Govt workers pension fund says revenues went up, plans to raise investment in stock market

    O ayan. I don't know why they have to announce their moves instead of just going ahead and investing, but they have said it. Bahala na kayong mag-interpret. ;)
    The GSIS will also increase its investments in publicly-listed companies, presumably to take advantage of the successive record highs of the Philippine Stock Exchange.
  • KuyaDanny wrote: »
    Govt workers pension fund says revenues went up, plans to raise investment in stock market

    O ayan. I don't know why they have to announce their moves instead of just going ahead and investing, but they have said it. Bahala na kayong mag-interpret. ;)

    Naremember ko tuloy ang issue years ago with MER-SMC-GSIS controlling interest.

    Sa laki ng funds na pwede invest from the goverment working force in the country can be positively result to a major shareholder kung saan nila iinvest an fund.
  • Fundamentals' Force
    Friday, February 1, 2013


    The local market was unstoppable in breaking new boundaries as domestic catalysts charged the main index to new record highs. Week-on-week, the Philippine Stock Exchange index (PSEi) soared by 150.97 points (2.45%) to finish at a fresh landmark of 6,318.61 while the broader All Share index added 91.78 points (2.36%) to close at 3,977.07. The PSEi also achieved a new intra-day high of 6,342.72 this Friday. Key events that spurred market activity were the recently concluded World Economic Forum and the announcement of gross domestic product for 2012.

    Both gave testament to the flourishing fundamentals that continue to buoy the local market. Newly released economic data navigated the major markets but it was not necessarily a smooth sail for US stocks. Despite a strong stream of corporate results, a shocking contraction in its 2012Q4 GDP slipped the Dow Jones towards the rarely pierced 14,000 territory. As the premier gauge of the US economy stumbled by -0.1% compared to a moderate recovery of 3.1% in the third quarter, the Federal Reserve upheld its decision of monthly bond buying and kept interest rates until unemployment is slashed to 6.5%.

    Fresh from his return after the wintry World Economic Forum in Davos, Switzerland, President Aquino's bold account of the country's 'growth story' was been warmly received by foreign delegates. The President also took home with him projects and investment prospects that investors applauded on Monday. The trading week ended with a celebratory note as the better than expected GDP was released on Thursday. 2012 GDP was recorded at 6.6%, beating 2011 data of 3.9% with all sectors: agriculture, services, and industry finishing on a positive note.

    Noticeably, the government's infrastructure efforts are starting to pay off as year-end public construction swung to a stellar 32.4% growth while its private counterpart posted 8.6%.

    Aside from the macroeconomic headwinds, individual issues also benefited from window dressing as seen on hefty gains of Globe Telecom, Inc. (PSE: GLO, +10.34%), Ayala Land, Inc. (PSE: ALI, +5.17%), Petron Corporation (PSE: PCOR, 4.19%), and Manila Electric Company (PSE: MER, +2.96%), among others. The Property subindex propelled to 6.56%, the highest gain
    among the brood while Financials was flat at only 0.01%.
  • Investment Strategy: Buy on pullback

    A commendable earnings season and a GDP contraction gave a muddled impression of the US economy's anticipated recovery. Data such as jobs report, PMI manufacturing index, and consumer sentiment will be rolled out next week that will shed light on the current situation of the world's largest economy. The Dow Jones Industrial Average is just a matter of points away from the 14,000 level that was only hit twice in the history of the said index.

    Such achievement could be the primary compass that other indices will follow. Following a top-down approach analysis for the local market, an impressive GDP data should translate to a much better local corporate earnings that investors are waiting to be unfold as February begins. In addition, recent corporate news on capital expenditures and new financial vehicles for fund-raising suggest a more bullish move for companies this year.

    We see the PSEi to continue inching up for the next trading week, although with lesser room ahead for gains. The main index is already situated at the upper band of its trend channel and is close to hit the resistance at 6,420. Technical indicators also show that the trend will continue for the near-term. While it is difficult to estimate on when will the PSEi take a rest from its rally, we place its support at 6,200. As for our stock recommendations, we are keen on sectors that will greatly benefit during the election period which will be more felt this month. We place are buys on Puregold Price Club, Inc. (PSE: PGOLD) and Jollibee Foods Corporation (PSE: JFC).
  • AB Capital Securities, Inc. is now accepting reservations on PHILIPPINE BUSINESS BANK Initial Public Offering.

    The IPO price is Php 31.50 per share.
  • AB Capital Securities, Inc. is now accepting reservations on PHILIPPINE BUSINESS BANK Initial Public Offering.

    The IPO price is Php 31.50 per share.

    Ganundin sa COL. Pasabi naman kung mag-oversubcribed yung sa AB Capital. hehe
  • SECB Outperforms

    Security Bank Corporation (PSE: SECB) announced results of its full year 2012 earnings today, showing that it has reached an all time high net income of P7.5 billion, reflecting an 11% growth from 2011. It has maintained an above industry Return on Equity of 22%.

    Despite risk of decreasing margins pressured by low interest rates, the Bank still recorded an 8% net interest income growth backed by 30% loan growth and 19% deposits growth. Meanwhile, trading gains and fees still contributed significantly and led non interest income to grow 44%. At current price of P174.40/share, PE is 11.75x and PB is 2.38x. We also project a 10% profit growth for 2013. On a historical perspective, SECB's current valuation is higher. However if compared with its local peers, the Bank is least expensive. On a pure valuation standpoint, SECB is an attractive buy. Consider also that the market is bullish and sentiments are positive. A good entry point would be P170, since we expect a slight pull back based on technical indicators.
  • DJIA Daily Monitoring

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  • Bloomberry Resorts Corporation (PSE: BLOOM)
    Wednesday, February 6, 2013


    It will be exactly 38 days from now before Solaire Resorts and Casino finally opens its doors to the gaming public. Bloomberry Resorts Corporation (PSE: BLOOM) announced today the grand opening of its flagship product on March 16. The local market must have been excited as well when BLOOM broke out from its consolidation on the beginning of February trade. The stock has gained by 7.06% as of its January 31 closing price. We think that BLOOM's abrupt three-day rise (and profit-taking today) reflects the market's anticipation towards the gaming sector and its adherent effect to the local economy, such as its contribution to the tourism sector and significant revenues the government will derive from the operation of the Entertainment City.

    We recommend investors to buy BLOOM at 13.90 which is the stock's immediate support after breaking away from a month-long consolidation. BLOOM may still test this support but it is backed by technical indicators which show buy signals. We place our target price at its resistance of 15.00 which we think will be driven by market anticipation before the grand opening of Solaire. Take note this is only for the near-term and a new price target will be released once the company reports the initial results of its Solaire's operations.

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  • LC: Inverted Head and Shoulders
    Thursday, February 7, 2013


    Lepanto Consolidated Mining (PSE:LC) has rallied since bottoming at 0.90 last december and is now hovering near the 1.20 resistance. In our view, this confirms an inverted head and shoulders formation.

    The left and right shoulder are both round supports with a range of 1.10-1.15, while the head would be the round support at 0.90. We think that the 1.20 resistance is the neckline and a breakout of this level should have a target of 1.50. The distance of the head to the neckline is the basis of the breakout target. We rate LC a trading buy with an exit price of 1.50.

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  • Stocks drift lower

    http://money.cnn.com/data/markets/?iid=EL

    U.S. stocks finished in the red Thursday as investors took a step back and digested mixed economic news and a slew of earnings reports.

    The Dow Jones industrial average dropped 42 points, or 0.3%. The S&P 500 slipped 0.2% and the Nasdaq fell 0.1%. The major indexes were even lower earlier in the day.

    Stocks have stalled this week after a strong start to the year. The Dow and S&P 500 are both up about 6% in 2013, and near their all-time highs. The Nasdaq has gained almost 5% so far this year.

    "The market has pretty much gone in one direction since the beginning of the year so perhaps this is just a natural pause," said Kim Forrest, senior equity analyst at Fort Pitt Capital. "It's possible that investors are taking a break."

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  • Market Leaps
    Friday, February 8, 2013


    In an amazing feat this week, the Philippine market soared 2.22% week-on-week despite trickles of negative news from foreign markets. The PSEi closed at 6,458.67 this Friday, strongly surpassing 6,400 and held itself above this level the entire week. Index issues continued to make huge leaps while second and third liners also took its cue and tracked the blue chips as well. Value turnover averaged at P9.5 billion as optimism continued to propel the market's activity.

    The European region was put back in the spotlight as political woes threatened economic stability. Political scandals in both Spain and Italy could cost their respective recoveries as waning confidence over the governments' risk of social upheaval and discontent. The region, considering its fragility right now, could not afford such political troubles. The threat of this unfortunate development could send major markets, including US' Dow Jones, to decline.

    Some issues took a surprising turn this week especially those which broke out of their long-term sideways trend. To mention a few, San Miguel Corporation (SMC) surged 5.2% week-on-week after it broke P110 sometime last week. SMC sought to have its exchangeable bonds listed in Singapore be repurchased or have it exchanged for common shares of SMC. Meanwhile, SM Development Corporation (SMDC) also awakened from its long slumber.

    Shares jumped 16.8% to P7.01 this week. Latest economic figure to come out is the January inflation rate, which inched up to 3.0% from the 2.9% in December. The higher figure is attributed to the implementation of the sin tax law, which raised the prices of alcohol and tobacco, and higher power costs. Year on year, the figure is still lower compared to January 2012's 4% and also within the 3-5% 2013 inflation target of the Central Bank.

    Buy on Support

    Foreign developments are unlikely to have a negative sway on the local market's performance next week. Full year earnings in US show that more companies reported profits that exceeded estimates than those which performed in line or less than projections. This will at least give some support to US markets. On the other hand, the risk would be Europe's inability to contain its political troubles which could potentially sway foreign markets' stability.

    Meanwhile, local scene provides ample support to the market as economic strength remains intact. The PSEi sustained the bullish sentiment which brought it to new highs almost each day. Some issues which showed strong uptrend channels are MEG, MBT, BPI, MPI, AT and even PX. A few issues have also released press statements on their full year results. Ayala Land Inc. (ALI) is scheduled to announce results next week while Security Bank Corp. (SECB) announced significant gains in earnings on 2012. We expect earnings.
  • GMA Network, Inc. (PSE: GMA7)
    Monday, February 11, 2013


    While aspiring politicians will flood in netween your favorite local shows as the campaign period for the mid-year elections officially begins tomorrow, local broadcasting networks will be cashing on profits and one of the prominent beneficiaries is the publicly-listed, GMA Network, Inc. (PSE: GMA7).

    GMA7's 50-day exponential moving average has tracked the steady uptrend since December last year. Consequent to the green light of the formal airing of campaign advertisements, GMA7's technical indicators notify a buy signal for the stock. We recommend a trading buy for GMA7 with an entry price at 9.90. Having a closer look at its chart, GMA7 is attaining higher lows. We think that GMA7 could sustain its run-up through its strong Relative Strength Index backed by its ripe fundamentals. We advise investors to position themselves in such sectors that will be directly affected by election period.

    We place our near-term target price at 10.50 which is the medium-term resistance of the stock.

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  • LR: Third time's the Charm
    Tuesday, February 12, 2013


    Leisure and Resorts World (PSE:LR) is attempting another breach of the key resistance at 9.50.

    While it did succeed in breaking this level in the past, it failed to hold above it and eventually broke down to 7.56. We have reason to believe that this attempt is now stronger than before underpinned by the gradually rising support and two round bottoms with a range of 7.50-7.90.
    It is important to note that recent round support coincides with the uptrend.

    We think this suggest a strong support is present at 7.50. We place a trading Buy for LR with an exit price at 11 based on the height of the nearest round support from the 9.50 resistance. A close below 8.60
    would indicate a retreat back to support, which is a good place to put stop losses.

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