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Weekly Summary 06 27 2016 - 07 01 2016_Page_1

Duterte Euphoria, Calm Post-Brexit send PSEi to all-time high

Current Weekly YTD
PSE      7,830.35 2.63% 12.63%
FMETF         128.80 2.71% 13.48%
All Shares      4,738.03 4.30% 18.73%
Financials      1,763.81 2.02% 13.74%
Industrial    11,926.64 1.49% 8.12%
Holdings      1,655.75 3.42% 8.20%
Property      3,443.80 3.78% 18.12%
Services      7,647.91 1.68% 15.86%
Mining & Oil    11,289.54 4.08% 8.27%



Outlook:  We expect the market to correct after reaching an all-time high for the year. The market may lose steam this week as the “Duterte euphoria” ebbs after his inauguration.

The PSEi rose 2.63% last week  to 7,830.35 (on close) as investors picked up bargains post-Brexit sell-off during the other week. The inauguration of President Duterte also became a catalyst for the market to reach 7,830.35 on Friday.

Year-to-date, the index gained 12.63%. Foreigners were net buyers during the week amounting to Php5.89bn ($125mn); year-to-date foreign inflow was at Php32.11bn ($683mn). SMPH, MBT, URC, SM and BDO were the most bought stocks for an aggregate amount of Php2.41bn.

Macro News: The Indonesian government halted permit issuance to all “flagged”vessels sailing to the Philippines due to  maritime piracy and kidnapping in the Sulu Sea. The Philippines heavily relies on Indonesia for its coal requirements (68% of the 22mn metric tons coal demand by the Philippines came from Indonesia). This was positive for Semirara Mining and Power Corp. which is the country’s biggest coal miner, supplying 80% of the country’s 22m coal consumption.

Meanwhile, the Bureau of Customs collected Php37.5bn in June, up 19% year-on-year based on preliminary figures. In the first three months, collections fell 2% to Php90.5bn on weaker commodity prices.  BOC is tasked to collect Php498.7bn, a 35.9% increase year-on-year.

Imports rose 29% in April to $6.53bn on the back of growth  in industrial machinery (+74%), electronics (70%), and telecom equipment (+73%). For the first four months, imports surged 13.5% to $25.1bn. Trade balace was at a deficit of  $2.28bn in April. For the first four months, trade balance was at $7.8bn deficit.

Loan growth (net of RRPs) of commercial banks rose 17.7% in May from 15.6% in April. Loans for production increased 17.9% while consumer loans jumped 16.8%. M3 expanded by 13.5% year-on-year to Php8.66tn.

Corporate News: GTCAP increased its stake in Profriends to 51% from 22.7%. The transaction was valued at Php8.76bn, similar to the initial stake that was bought last year.

JG Summit (JGS) acquired a  22% stake in Global Business Power from Orix at Php8.6bn. The new ownership structure is now as follows: Beacon/Metro Pacific (56%), Meralco (22%) and JGS (22%).

President Duterte’s order during his first cabinet meeting  was the cancellation of online gambling licenses, citing its negative effects to the poor. This led to the slump in Philweb (WEB) and Leisure and Resorts World Corp (LR) shares.

8990 Holdings will launch a high-rise residential tower along EDSA corner Banahaw Street. It will have 5,207 units and has a sales value of Php7.2bn. Megawide will construct the tower with a contract value of Php3.6bn.


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