Weekly Equities Summary and Outlook : July 09 – 13, 2018
Outlook. We expect the PSEi to hover around 7,200-7,400 amid lack of leads and ahead of the earnings season which will start next week with the release of Q2 earnings of IMI on July 27 and BDO & MER on July 30.
Market Review. The PSEi traded sideways (+12.2 points, +0.2% day-on-day) today to 7,381.7. Last week, the local bellwether tracked Asian markets, rising by 212 points (+3% week-on-week, w/w) to 7,399.2 on easing trade tensions after US & China signaled they are open to resume trade negotiations. Year-to-date (YTD), the index fell 13.7% and by 18.5% from Jan. 29’s peak of 9,058.
Bangko Sentral ng Pilipinas (BSP) reported that cash remittances rose 6.9% y/y to $2.5bn in May, driven by strong inflows from Filipinos in the US (contributed 2.6 percentage points), United Kingdom (1.6 percentage points) and Singapore (1.3 percentage points). These countries comprised 45% of total remittances in May. Notably, cash remittances from the Middle East sustained its decline, -16.3% y/y in May. In peso terms, May cash remittances rose at a faster pace of 12% y/y to P129bn. YTD, cash remittances tallied to $11.8bn, +4.2%. Likewise, personal remittances grew 6.1% y/y to $2.7bn. YTD, it expanded by 4.4% y/y to $13.2bn. We (house view) expect OFW remittances to sustain 2-4% growth for full year 2018.Philippine Economic Zone Authority (PEZA) reported that investment pledges in H1 2018 fell by 55.9% y/y to P53.1bn. Notably, investments in ecozone development dropped 65.1% y/y to P26.3bn, manufacturing by 9.3% to PP19.5bn and IT-business processing by 13.7% y/y to P8.1bn. PEZA attributed the decline to uncertainties on the proposal to remove fiscal incentives under TRAIN 2.
Megaworld Corporation (MEG) has opened three new community malls, namely San Lorenzo Place and Three Central in Makati and The Village Square in Alabang with a combined retail space of 26,500 sqm. This has increased MEG’s full-scale and community malls to 17. The company aims to operate 18 malls by end-2018 and 28 malls by end-2020 to support its goal to generate recurring income of P20bn and total rental space of 2.5mn sqm. MEG closed today at P4.49/share, -13% YTD.Read full article here.
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