PH stocks end rally

The local stock barometer ended an eight-day run-up on Monday, dragged lower by a sell-off in emerging markets amid concerns on tightening credit in China.

The main-share Philippine Stock Exchange index (PSEi) tumbled by 109.80 points, or 1.78 percent, to close at 6,081.61. Investors pocketed gains alongside gloomy sentiment across regional markets. Adding to concerns out of China was an upcoming Federal Reserve meeting.

The worst hit counter was the sub-index for holding firms, which fell by 135.32 points, or 2.41 percent. The financial, industrial, services and property counters slipped more than 1 percent.

Value turnover for the day stood at P6.8 billion. There were five decliners for every gainer in the market.

Credit Agricole CIB said heightened worries over the recent emerging market selloff would indeed weigh on sentiment. As credit conditions in China tightened, jitters over emerging markets escalated. There were talks of a trust product in China that might default this month.

Investment bank Merrill Lynch said the underlying problem in China was a corporate sector insolvency issue, expecting many more products threatening to default over time.

“We suspect that, at a certain point, the involved parties will be either unwilling or unable to bail them out, which may trigger a credit crunch. The government’s attitude is critical,” Merrill Lynch said in a research note, adding this could be a systemic problem.

Citi, on the other hand, said a financial crisis was not imminent in China. “If there is a default, it would impose hard budget constraints on market participants and would allow the market to price risks correctly.—Doris C. Dumlao

Originally posted: 6:26 pm | Monday, January 27th, 2014

Source: Philippine Daily Inquirer

4:53 am | Tuesday, January 28th, 2014

Century reports reservation sales of P24.6 B

MANILA, Philippines —Property developer Century Properties Group posted growth of 15 percent in reservation sales last year to reach a record-high level of P24.6 billion, as demand from overseas Filipinos buoyed up the real estate market.

To fuel growth in the years ahead, CPG plans to bring to the property market this year at least P17 billion worth of new projects, including the recently launched Century Spire interior-designed by Armani Casa, the company said in a press statement on Tuesday.

In the coming months, CPG also expects to complete two residential buildings with 1,000 apartment units, plus the Century City Mall on Kalayaan Avenue and an urban beach club designed by Paris Hilton at the Azure Urban Resort Residences in Parañaque City. This will allow the company to recognize more revenues from residential development and likewise book recurring rental income from its inaugural retail venture.

For 2013, the reservation sales worth P24.6 billion marked the highest level achieved by CPG in a single year in its 27-year history. Reservation sales came from its Century City, Azure Urban Resort Residences, Acqua Private Residences, and Commonwealth by Century locations, the company reported.

To date, Century Properties has almost 30 buildings in different stages of development, catering to the luxury, middle income, and affordable market segments. Its projects are over 90 percent sold, the company said.

Century chair and chief executive officer Jose E.B. Antonio attributed the growth in reservation sales to the continuing expansion of the real estate industry and the strength of overseas Filipino workers (OFWs) and remittances.

“Given the strength of OFW remittances, even during the global financial crisis, we purposely differentiated our marketing strategy to cater to the needs OFWs and foreigners. Over the years, we have created a strong international sales and marketing team, which have enabled us to access the underserved overseas market. Today, Century has over 60 international sales offices and affiliates in four continents,” Antonio said.

Among CPG’s ongoing projects are the Trump Tower at Century City,  Acqua Livingstone residences,  Milano Residences,  Acqua Iguazu residences, and Armani and  Century Spire. It is also starting to build up recurring income by putting up business process outsourcing office buildings.

For the first nine months of 2013, CPG grew net income by 12 percent year-on-year to P1.6 billion.

Source: By Doris C. Dumlao | Philippine Daily Inquirer

3:45 pm | Tuesday, January 28th, 2014

BSP indicators point to continued growth of PH

The latest economic indicators point to the continued growth of the Philippine economy this year, despite the adverse effects of natural calamities on the local front and headwinds from abroad.

In its quarterly inflation report, the Bangko Sentral ng Pilipinas (BSP) cited a significant jump in the country’s Purchasing Managers’ Index (PMI) last November.

The monthly PMI is a reliable leading indicator for increases or decreases in output of the manufacturing and services sectors.

The composite PMI remained above the 50-point threshold to reach 63.3 percent in November, higher than the 60.1 percent in September.

Any score higher than 50 indicates an expansion in output over the coming months, while a score below 50 shows a likely decline in output.

The PMI score for manufacturing alone was 54.6 in November 2013, lower than the 59.5 index and 54.9 index registered in September 2013 and November 2012, respectively.

“Although still in expansion mode, the manufacturing industry experienced a slowdown due to the disruption of business activities in the aftermath of Supertyphoon ‘Yolanda,’” the BSP report read.

The PMI for the services sector in November was significantly higher at 68.3 from 60.2 in September 2013 and 65.2 posted in November 2013.

“All key indices expanded relative to September 2013 levels,” the BSP said.

A decline was posted in the retail and wholesale PMI, which stood at 58 in November 2013 from 60.6 in September 2013 and 59.8 in November 2012.

“All major indices, except for employment, slowed down relative to September 2013 levels,” the report read. The BSP said the sector grew at a slower pace due to uncertainties in supply and demand conditions after the onslaught of Supertyphoon Yolanda in the Visayas.

On the demand side, the BSP cited the continued strength in car and power sales—both indicators of consumer confidence.

Source: By Paolo G. Montecillo | Philippine Daily Inquirer

8:10 pm | Sunday, January 26th, 2014

Asian stocks sink on global economy fears

A man walks by an electronic stock board of a securities firm
in Tokyo, Monday, Jan. 27, 2014. Asian stock markets tumbled Monday
as investors factored in the possibility of slowing growth in China
and a further reduction in U.S. central bank stimulus. AP

HONG KONG – Asian stock markets were pummeled Monday by the possibility of slowing growth in China and a further reduction in U.S. central bank stimulus.

Stocks sank as investors sought out havens such as the Japanese yen, which strengthened to a seven week high against the dollar, and gold, which was at its highest in more than two months.

Investors were awaiting a two-day meeting of the U.S. Federal Reserve starting Tuesday, where officials are expected to reduce the central bank’s monthly bond buying by another $10 billion to $65 billion. Recent signs of a sustained recovery in the world’s biggest economy will play a big role in the decision by Fed officials to scale back stimulus for a second time.

Emerging markets have been propped up for years by investors seeking higher returns using a tide of so-called “easy money” from the Fed and other central banks but now that the end for those policies looks to be near, some investors are fleeing stocks. The turmoil has slammed some places particularly hard, such as Argentina, where the peso dropped 16 percent against the dollar over two days last week.

“The growing turmoil in emerging markets is inflicting damage on risk assets across the board and no letup is expected in the near term,” said Mitul Kotecha, head of global markets research for Asia at Credit Agricole CIB, in a report.

The global sell-off was triggered by the preliminary results Thursday of a survey showing that China’s massive manufacturing industry would contract in January for the first time in six months, the latest sign that a painful slowdown in the world’s No. 2 economy is likely to continue.

“We’ve seen brief slowdowns in China before,” said Michael Every, head of financial markets research for Asia-Pacific at Rabobank. “The difference is we don’t expect to see rapid acceleration again this time, because they’re trying to clamp down on credit growth to prevent nonperforming loans going even higher than they are.”

Japan’s Nikkei 225 sank 2.3 percent to 15,023.08 as they dollar edged higher to 102.42 yen from 102.38 late Friday. The yen has strengthened significantly in the past few days, which is negative for export stocks.

Hong Kong’s Hang Seng lost 2 percent to 21,987.65 and Seoul’s Kospi dropped 1.3 percent to 1,915.27. In mainland China, the Shanghai Composite Index dropped 0.7 percent to 2,031.24. Benchmarks in Taiwan, Singapore, Philippines, Indonesia and New Zealand also slipped.

The Australian stock market was closed for a holiday.

In the U.S. on Friday, the Dow finished down 2 percent at 15,879 and the Standard & Poor’s 500 fell 2.1 percent to 1,790. 

The Nasdaq composite fell 2.2 percent to 4,128.

The euro strengthened to $1.3683 from $1.3676.

In energy markets, benchmark crude for March delivery was up 6 cents to $96.70 in electronic trading on the New York Mercantile Exchange. The contract fell 68 cents to close at $96.64 on Friday.

Source: Associated Press | Business Inquirer

PH economy seen growing by 7% this year

MANILA, Philippines — The Philippine economy is likely to grow by at least 7 percent this year, aided by additional spending for post-Supertyphoon “Yolanda” reconstruction, First Metro Investment Corp. said Monday.

“We believe fundamentals will remain strong in 2014 as the country will benefit from the recovery of the global economy, particularly the U.S. and emergence of eurozone from recession. We expect emerging markets to stabilize in the next two years,” FMIC president Roberto Juanchito Dispo said at a press briefing.

The global economic rebound will in turn support the recovery in the export market while business process outsourcing and overseas Filipino remittances would continue to support domestic demand, Dispo said, supporting a gross domestic product (GDP) growth of 7 to 7.5 percent this 2014. At the same time, he said, massive rehabilitation work in the aftermath of Yolanda would drive growth due to the multiplier effect.

Economist Victor Abola of the University of Asia and the Pacific, FMIC’s partner in macroeconomic research, said the additional spending for Yolanda reconstruction would add at least 1.2 percentage points to GDP this year, bringing full year GDP average to 7.3 percent.

The outlook for 2014 was thus seen as favorable despite a potential 2 percent drop in agricultural output caused by natural calamities in 2013.

The Philippine economy has sustained a growth of at least 7 percent in the last five consecutive quarters.

Source: By Doris C. Dumlao

Philippine Daily Inquirer

4:55 pm | Monday, January 6th, 2014