SMC shares fall, recover as Ang steps in

 Economy
Jul 172013
 
SMC shares fall, recover as Ang steps in

MANILA, Philippines – Shares of diversified conglomerate San Miguel Corp. (SMC) plummeted early yesterday before bouncing back to gain at the end of trading after a report that connected it to a “highly leveraged conglomerate” at risk of default was downplayed. Stocks of the Ang-led corporate powerhouse lost as much as 9.6 percent to P76.40 in early trades before recovering in the afternoon to settle 1.49 percent higher at P85 apiece. The late rally on SMC shares, nonetheless, failed to lift the Philippine Stock Exchange index (PSEi) which eased 0.13 percent or 8.83 points at 6,574.72. This was despite officials clarifying a newspaper report last July 14 that quoted the International Monetary Fund’s findings last April, warning the country against large conglomerates with high exposure to bank loans. The report, written by Manila Times columnist Rigoberto Tiglao, quoted the IMF as saying that a “highly leveraged conglomerate” – which it did not name – is at risk of default, although that risk is currently “low.” SMC, which has expanded from food and beverage to oil and transportation, initially took the brunt from investors before company president and chief executive officer Ramon Ang stepped in to calm the market. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “Yes SMC can buy back shares and yes SMC has enough funds to do that anytime,” Ang said in a text message. The statement, First Grade Finance’s analyst Astro del Castillo said, “diffused” investor concerns “on the company’s financial standing.” He explained Ang Read More …

Metrobank to exercise call option on P5.5-B Tier 2 notes

 Economy
Jul 172013
 
Metrobank to exercise call option on P5.5-B Tier 2 notes

MANILA, Philippines – Metropolitan Bank & Trust Co. (Metrobank), the main banking arm of the Ty family, will exercise its call option on its P5.5-billion Lower Tier 2 notes. In a disclosure to the Philippine Stock Exchange, Metrobank head of investor relations Juan Placido Mapa III said the bank’s board approved Tuesday the conduct of the call. He said Metrobank would undertake the call option on the notes with a rate of 7.75 percent on Oct. 4. The call option feature is in accordance with the terms and conditions of the notes. Mapa, however, said they would seek the approval of the Bangko Sentral ng Pilipinas (BSP) before carrying out the call option. “The bank is currently in the process of securing BSP approval,” he said. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The Metrobank official said the board has also approved the issuance of up to $500 million Basel 3-compliant Tier 2 capital securities to proactively manage its capital base for growth and for refinancing of maturing capital notes. The Basel 3 guidelines issued by the BSP in Jan. 15, 2003 requires that Tier-2 notes have a provision for the instrument to either be written off or converted to common equity upon occurrence of certain trigger events. The BSP circular further stipulates that banks must make the necessary amendments to their articles of incorporation to accommodate such a conversion. Metrobank said it has received  BSP approval to amend its articles of incorporation on the increase in authorized Read More …

Stocks slip on weak Wall St earnings

 Economy
Jul 172013
 
Stocks slip on weak Wall St earnings

MANILA, Philippines – The bellwether stock index slipped for the second straight session yesterday as investors took the lead from disappointing earnings in Wall St. while some stayed on the sidelines ahead of US Federal Reserve chairman Ben Bernanke’s policy speech before Congress. The Philippine Stock Exchange index (PSEI) dropped 0.13 percent or 8.83 points to 6,574.72, paring earlier losses that pushed the main index to an intraday low at 6,514.10. “The battle between the bears and the bulls turned in favor of the former as another round of not-so-encouraging numbers from the US corporate front pulled on sentiments,” said Justino Calaycay Jr., an analyst at Accord Capital Equities Corp. “Adding to the slight return to pessimism was another Fed official voicing the need to cut back on the stimulus program ahead of Bernanke’s semi-annual monetary policy report to Congress later this week,” he added. Wall St. which is in the thick of the earnings season, retreated Tuesday on the back of lower-than-expected second quarter income companies like Coca-Cola. The Dow Jones industrial average shed 0.2 percent or 32.41 points to close at 15,451.85 while the broader Standard & Poor’s 500 index slipped 0.4 percent or 6.24 points to 1,676.26, snapping an eight-day climb. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Local stocks bucked the climb in Asian stocks. Japan’s Nikkei 225 rose 0.11 percent or 15.92 points to 14,615.04, while Hong Kong’s Hang Seng index inched up 0.28 percent or 59.49 points to 21,371.87.

Public infra spending seen to more than double

 Economy
Jul 172013
 
Public infra spending seen to more than double

MANILA, Philippines – Public infrastructure spending is seen to more than double to P834.5 billion by 2016 as the Aquino government allocates more funds to build more roads, railways, airports and bridges to support its goal of inclusive and sustainable growth. In a briefing yesterday, Budget and Management Secretary Florencio Abad said the government would continue to bolster infrastructure spending to further spur economic growth to as much as seven percent this year. For this year, the Aquino administration expects to spend P299.4 billion for infra-related projects, equivalent to 2.5 percent of gross domestic product or GDP. The amount excludes projects under the government’s Public-Private-Partnership program. For next year, infrastructure spending is forecast to rise by 28.4 percent to P418.2 billion or three percent of GDP.  The budget is expected to increase further to P601.5 billion and P834.5 billion by 2015 and 2016, respectively, corresponding to 4.1 percent and 5 percent of GDP. The Philippines trails behind its Asian neighbors in terms of government infrastructure spending. According to the World Bank and the Asian Development Bank, the Philippines needs to jack up infrastructure investments to keep pace with its Asian peers in attracting foreign direct investments. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Across Southeast Asia, public works are being given priority by governments seeking to maintain growth amid the global economic downturn. Improved infrastructure would contribute to reduced costs of doing business, increased market accessibility and enhanced competitiveness, the ADB said. Higher tax collections and improved public Read More …

Bakers warn of higher pandesal prices

 Economy
Jul 162013
 
Bakers warn of higher pandesal prices

MANILA, Philippines – A group of bakery owners and bread producers warned that prices of Pinoy pandesal, other bread products, biscuits and noodles would increase by 10 to 15 percent, if the government gives in to the demand of an influential lobby group to restrict the entry of affordable flour from Turkey. The Filipino-Chinese Bakery Association Inc. (FCBA), the group of bakery owners or producers of bread, noodles, cakes, pastries, pizza, siopao, pandesal, cookies, and biscuits from Luzon, Visayas and Mindanao, said imposing a higher tariff on flour imported from Turkey would increase the price of Pinoy pandesal by 50 centavos to P3.50 per piece from the current P3 apiece. Pinoy pandesal is the brand of affordable bread products produced by small community bakers. “Because of cheaper Turkish flour, Filipino consumers enjoy lower priced breads and other flour-based products such as dry noodles, biscuits and fishballs,” the FCBA said. The FCBA said flour represents more than 50 percent of the total cost of bread production, and an increase in the price of flour would automatically translate to higher prices of bread. “There are 25,000 bakeries operating in the Philippines and many small and medium-sized bakeries are using lower priced flour for them to offer breads within the reach of the Filipino consumers,” the FCBA said. The FCBA said the Philippine Association of Flour Millers Inc. (PAFMIL), which has monopoly of the local flour market, is using its influence on the government to push the Turkish flour out of the country Read More …

Infra standstill: Risk aversion or incompetence?

 Economy
Jul 162013
 
Infra standstill: Risk aversion or incompetence?

People keep on asking me why the P-Noy administration has fallen flat on its face in the area of constructing vital infrastructure. The only major project they are claiming to have completed, the Laguindingan Airport in Cagayan de Oro was initiated during the Ate Glue watch. The portion that was the responsibility of the P-Noy watch was even botched by DOTC. They forgot the airport needs air navigation and night landing facilities. So they inaugurated the airport with only visual flight rule in place. The ILS (Instrument Landing System) and other vital facilities will come later. Another agency under DOTC forgot that the new airport needs a good public transport system. LTFRB should have been issuing franchises for buses and jeepneys but they thought of doing that too late. I was told of a Manila-bound Cebu Pacific passenger who had to pay a taxi P800 to get to the airport. His plane ticket was P300. In answer to my question, I am inclined to believe that incompetence is the basic reason why P-Noy’s boys have failed to put up infrastructure projects over the past three years. But there are those who say it is an acute case of risk aversion… as in a fear of signing any contract that may end up with the Ombudsman and will bug them way after they are out of office. They are most likely thinking they cannot be sued for corruption if they do nothing… but they risk a Sandiganbayan case if they signed Read More …

ALI to issue P21-B bonds

 Economy
Jul 162013
 
ALI to issue P21-B bonds

MANILA, Philippines – Property giant Ayala Land Inc. (ALI) has secured the approval of the Securities and Exchange Commission (SEC) to issue as much as P21 billion worth of bonds. This development will allow the property arm of the Ayala conglomerate to conduct its largest fundraising in the capital market. In a disclosure, ALI said it has received SEC approval to sell up to P21 billion in bonds. “The company will issue the initial tranche of the bonds as soon as all other necessary documents are submitted and all the required approvals are secured, which hopefully will be completed before the end of the month,” ALI said. Last week, ALI chief finance officer Jaime Ysmael said the fundraising will “partly finance our capital expenditures program for the year.” In June, ALI’s board of directors approved the sale of up to P21 billion in long-term, fixed-rate corporate bonds through a general public offering. It will be the largest fundraising of ALI thus far, eclipsing the P15 billion it secured from a retail bond offering in April last year. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Philippine companies have been tapping funds from different channels like bonds and banks amid low interest rates and high liquidity. The property firm allotted P65.5 billion in capital expenditures this year as it plans to launch 69 new projects worth P129 billion to ensure continuous growth in the coming years. It launched 67 new projects last year worth P110 billion. In the first quarter, Read More …

Fil-Chinese businessman wins award in China

 Economy
Jul 162013
 
Fil-Chinese businessman wins award in China

MANILA, Philippines – The China Outstanding Business Leaders Forum held the 4th “Outstanding Chinese Business Leader Award” recently at the Beijing National People’s Congress (NPC) Centre, in Beijing, China. Fifty business leaders from all over the world were screened of which 16 were chosen as awardees through an open voting system. All 16 awardees were described as inspiring individuals who epitomize strength, ingenuity, knowledge, vision and represent the “best of the best” in China. Dr. James G. Dy, President of Philippine Chinese Charitable Association Inc. (PCCAI), owner and operator of Chinese General Hospital and Medical Center, and chairman of the Filipino Chinese General Chamber of Commerce Inc., (FCGCCI), was chosen as the lone Filipino-Chinese awardee for this year.  The award was presented to Dr. Dy by the Chinese People’s Association for Friendship with Foreign Countries chairman Chen Hao su, son of Marshal Chen Yi. Dr. Dy expressed hope that the recognition will promote better friendship between the Philippines and China and foster unity for the Filipino Chinese community.  Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Dr. Dy credits the countless hardships and struggles he hurdled as a businessman as the foundation of his success. He recalled that in the past decades, since he started his exploits in the business society; his only capital was blood, sweat and tears which translated into pure hard work. He said his motivation for success is his desire to contribute to society and the Filipino-Chinese community through social services, and the tireless promotion Read More …

BSP seen keeping rates at record lows

 Economy
Jul 162013
 
BSP seen keeping rates at record lows

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) signaled yesterday it could maintain policy rates at their historic low levels as inflation remains manageable. “There is no urgency to change the policy because inflation remains under control,” BSP Governor Amando Tetangco Jr. told reporters on the sidelines of central bank’s stakeholders’ awarding ceremony. Policy rates  – which serve as banks’ benchmarks in charging their loans – have been kept at their record lows of 3.5 percent and 5.5 percent for overnight borrowing and lending, respectively. They have been at that level since October last year. So far this year, the BSP only chose to tweak the return it offers on special deposit accounts (SDA), parked funds by lenders and trust departments, by a total of 150 basis points to two percent from 3.5 percent. But for the next policy meeting slated on July 25, Tetangco said he also sees “no urgency to change the status” of the SDA rate, which when lowered thrice reduced idle money with the BSP from a high of P1.98 trillion to just P1.738 trillion as of June 28. The central bank said efforts to push out funds of the SDA are meant to support economic growth amid a benign inflation environment that gives more capacity to boost money supply in the system. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Economic expansion hit 7.8 percent in the first quarter, beating market expectations, as an inflation rate of three percent gave more capacity to Read More …

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