Alerts

   Adrian Alexander Yu

The overall confidence index turned positive to 4.6% in 3Q19 from -1.3% in 2Q19. The optimism was attributed to their expectations of the following: a) improvements in the peace and order situation, b) availability of more jobs, c) additional and high income, and d) good governance. Meanwhile, for 4Q19, consumer confidence was more upbeat as the confidence index rose to 15.8% from the 2Q19 survey result of 9.7% for 3Q19. Likewise, confidence index for the next 12 months improved to 29.8% from 25.2% previously.

   Adrian Alexander Yu

Coconut product manufacturer and exporter, Axelum Resources Corp., has finalized its IPO, offering its shares at Php5.0/sh with a gross value of Php4.0Bil. Note that AXLM also reduced the secondary shares being offered to 100 million from its initial plan of 400 million shares, while maintaining the same amount of primary shares at 700 million (400 million in treasury and 300 in new common shares). Post-IPO, AXLM will have a market capitalization of Php20Bil. According to management, they set the offer price to Php5.0/sh, lower than the revised max price of Php5.72, in order to attract more investors in this equity deal. Meanwhile, Jason Rosenblatt from CP Compass, which is the selling shareholder/Private equity firm, said that they decided to reduce the shares they would sell as they believe AXLM is worth more than Php5.0/sh.

   John Martin Luciano, CFA

MBT is looking to issue up to Php25Bil worth of long-term negotiable certificates of deposit (LTNCD) in one or more tranches to raise fresh funds and diversify its funding sources. These will carry tenors ranging from 5.5 to 10 years. Meanwhile, the fund-raising activity is still subject to regulatory approval and market conditions

   Adrian Alexander Yu

The country’s overall balance of payments position in August 2019 reached a surplus of US$493Mil, lower than the US$1.27Bil surplus recorded in the same month last year. Inflows came mainly from the National Government’s (NG) net foreign currency deposits and BSP’s income from its investments abroad. This brought the BOP position for the first eight months of the year to a surplus of US$5.539Bil, a turnaround from the US$2.44Bil deficit during the same period last year. The surplus may be attributed partly to remittance inflows from overseas Filipinos during the first seven months of the year and net inflows of foreign direct investments during the first half of the year

   Adrian Alexander Yu

Foreign portfolio investment transactions recorded net outflows of US$392Mil in August 2019, a reversal from the US$15Mil net inflows yielded in the prior month. Broken down, BSP-registered investments for the month dropped 27.8% m/m to US$1.2Bil. Note that around 75.7% of these investments were in PSE-listed securities, while the balance went into Peso government securities. Meanwhile, outflows for the month stood at US$1.6Bil, which is 3.6% lower than the July outflows. The US received around 78% of the total outflows. On a year-on-year basis, registered investments grew 8.3%, but were outweighed by the 79.3% increase in outflows.

   Richard Lañeda, CFA

Alliance Global Inc, (AGI) has announced its decision to appropriate another Php2.5Bil share buyback for the next 12 months. This continues the existing Php5Bil share buyback set of expire this month, of which Php4.2Bil have already been used to purchase 309 million common shares. The new shares will be purchased in cash and booked as treasury shares. Management believes that the share buy back program will improve the company’s EPS, thus enhancing shareholder value.

   Richard Lañeda, CFA

We are terminating our coverage on RWM given its plans to apply for an involuntary delisting if public float level drops below 5% after the tender offer exercise. Given that the free float level prior to the tender offer is just 10.03%, the possibility of an involuntary delisting when public ownership level drops below 10% is really high. We believe RWM will be delisted therefore we are dropping our coverage on the company.

   John Martin Luciano, CFA

Due to realignment of coverage, we are terminating coverage of Belle Corporation (BEL). Effective upon termination of coverage, the last recommendation of the stock should not be relied upon forward.

   Adrian Alexander Yu

The Federal Reserve decided to cut its benchmark overnight lending rate by 25 bps to a target range of 1.75% to 2.00%. This is in line with Bloomberg consensus expectations. The committee again cited the implications of global developments for the economic outlook as well as muted inflation pressures as the primary reasons for the cut. On the other hand, based on the Fed’s Dot Plot, policy makers were divided on further action this year. In particular, five members thought that the central bank should have held its previous range of 2% to 2.25%, five approved the 25 bps cut but keeping the rate steady for the rest of the year, while seven favored at least one more cut this year.

   Justin Richmond Cheng, CFA

Axelum Resources Corp. reduced the maximum offer price for its IPO by 16% to Php5.72/ sh from Php6.81/s, in a bid to attract more investors. The lower price was made in consultation with First Metro Investment Corp., the issue manager, bookrunner, and joint lead underwriter. Meanwhile, the company will announce the final offer price on September 20.