The Bellwether – Issue 31

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Dear All, Releasing the 31^st issue of The Bellwether, as published by FMIC's IAG-Research.

This is a fortnightly publication on market action and outlook.  The following are the highlights of the 31^st issue:

• U.S. Fed QE3 Exit Increasingly for Real
• 2Q2013 GDP Growth Breaks Away from Decade Trend of Philippine Election Years
• Aboitiz Power Corporation (AP) Clinches 120MW Ancillary Contract, Works Out Lower Steam Pricing with Chevron

  U.S. Fed QE3 Exit Increasingly for Real End of asset purchases The sharp drops in Asian stock markets and upticks in 10-year U.S. Treasuries post a detailed Fed’s view of an expanding U.S. economy signals one thing: that the end of Fed’s asset purchases is in sight, whether it happens sooner or later—September, October, November of 2013.   2Q2013 GDP Growth Breaks Away from Decade Trend of Philippine Election Years The 2Q2013 slowdown to 7.5% from 1Q2013’s 7.8% (revised to 7.7%) highlights a potential break from a decade-long trend growth as there was not an instance in Philippine election years since 2004 that 2Q GDP has slowed relative to 1Q. In 2004, 2007 and 2010, the second quarter GDP growth were above the 1Q13 by 0.4%, 1.3% and 0.5%, respectively, and were also more than 1% above the year ago’s 1Q and 2Q growth levels. See Figure 1 on page 4.   Aboitiz Power Corporation (AP) Clinches 120MW Ancillary Contract, Works Out Lower Steam Pricing with Chevron AEV’s core net income were up 4% to Php11.6bn. Quarter-on-quarter (q-o-q), earnings were 12% higher to Php6.2bn. Net debt to equity was higher at 0.6x by end-2Q2013 versus 0.4x as at end-2012. Capex will be biggest for power, Php125bn (beneficial) for 1,197MW additional beneficial capacity in the next five years to secure long-term growth. Download the full PDF here! DOWNLOAD