Trader's Logbook

US stocks posted marginal gains for the weekled by the Nasdaq (+0.56%) and lagged by the Dow Jones Industrial Average (+0.13%). Recently sliding into a surprising quarterly decline, investors shrugged off the data as temporary, noting a jump in factory orders and ISM Non-Manufacturing data this week. Ahead: Jobless claims (previously 366,000) on Feb. 14 and Industrial production (previously 0.3%) on Feb. 15.

Local / News

ALI unit, DirectPower Services Inc. has obtained a 5-year retail electricity supplier license to engage in retail electricity operations, largely to supply Ayala-owned and managed malls, office buildings, business process outsourcing (BPO), hotels and affiliates. (AC) Ayala plans to build at least 1,000 megawatts of power-generation capacity in the next 5 years.  

http://www.rappler.com/business/21295-ayala-land-unit-to-retail-power?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rappler+%28Rappler%29

COAL commercial production in its mine in Davao Oriental will begin earlier than expected (moved to October this year from January next year), adding that a reevaluation of its coal reserves and resources is underway, to be finalized before end Q1.

http://www.interaksyon.com/business/54757/coal-asia-completes-exploration-at-davao-oriental-mine-ahead-of-schedule

DMC in talks with MER, Marubeni, and AC Energy Holdings Corp. for possible partnership in DMC’s 600MW coal-fired power plant in Batangas (SCC). DMC intends to grow it by another 600MW; Construction for the first 300 MW has begun and was expected to be finished by end of 2014 or early 2015. The three firms are pitching for equity stake. DMC said the co. will choose among them before the first half of the year is over.

http://www.businessmirror.com.ph/index.php/news/economy/9059-dmci-talking-with-3-firms-on-expansion-of-calaca-power-plant

GTCAP property unit Federal Land raised its capital expenditure budget for 2013 P10-12 billion from P7-8 billion to finance the expansion of its residential, office and retail businesses. Federal Land is spending P4 billion to ramp up development in its 37-hectare land at the Manila Bay; constructing a 15-storey office building catering to the business process outsourcing (BPO) market (25,000 sqm. GLA); P4-5 billion will be earmarked for the Veritown project, a luxury complex.

Note: GTCAP is spending P35-40 billion this year, bulk of which will be allotted for its power and property businesses.

http://www.interaksyon.com/business/54754/federal-land-sets-higher-capex-for-2013

GLO announced a higher cash dividend payout for shareholders (P33.50/share from P32.50 the previous year, representing 6.1% dividend yield or 86% of the firm’s core net income in 2012) despite posting a steep drop in its fourth quarter income due to modernization costs and higher phone subsidies.

http://business.inquirer.net/106729/globe-raises-payout-to-shareholders

LPZ unit FPH to retire P7.48 billion worth of debt as part of a strategy to pare down servicing cost. FPH board approved:

• Redemption of all outstanding 43 million series-B preferred shares worth P4.3 billion; issued in 2008
• Prepayment of the remaining fixed-rate corporate notes (FXCNs) consisting of 7- and 10-year notes amounting to P3.18 billion. Proceeds for prepayment will be funded partly by internal funds and through the issuance of P5 billion of lower cost term debt.
• Payment of a cash dividend on the series-B preferred shares

http://business.inquirer.net/106725/lopez-company-to-retire-p7-5b-worth-of-debt

MWIDE

• Sources say is in talks with three groups including The Medical City, a foreign company and a major local entity with expertise in hospital operation, for a joint bid to rehabilitate the 68-year old Philippine Orthopedic Center in Quezon City. The Orthopedic modernization is a build-operate-transfer project involving the construction of a 700-bed super-specialty tertiary orthopedic hospital located within the National Kidney and Transplant Institute compound along East Ave. Other interested groups include include MPI, Siemens Inc. Healthcare Sector, GE Health Care General Electric Phils., Sta. Clara International Corp., Mount Grace Hospital Ventures, Philips Electronic & Lighting Inc. and Data Trail Corp.
• Currently negotiating with MPI to jointly bid for the $377.6 million Ninoy Aquino International (NAIA) Expressway, a four-lane, 7.75 kilometer elevated expressway and 2.22 kilometer feeder road that will link three terminals of the NAIA with each other and to the Entertainment City along Roxas Boulevard.

http://m.philstar.com/315469/show/49c630d5b0ac0f011ba2e09d0234659b&t=raf1qtkgtlctab20g8g1nfak32

PX is set to collect US$25 million in insurance claims following its Padcal mine spill incident in August 2012; to receive full settlement within 15 days from Feb. 8. The board has yet to discuss where proceeds will be spent.

Note: Last September, the Mines and Geosciences Bureau fined Philex P1.034 billion for the waste discharge at the Agno and Balog rivers in August.

http://www.rappler.com/business/special-report/whymining/whymining-latest-stories/21350-philex-to-claim-$25-m-insurance-after-mine-leak?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rappler+%28Rappler%29

Local / Economy

BSP: Rate of rise in consumer prices would likely remain modest this year and in 2014 due to expectations that the peso would stay relatively firm against the US dollar; inflation to fall below 4% this year and the next. Inflation will continue to be within the 3-5% target range.

http://business.inquirer.net/106731/bsp-expects-tempered-rate-of-rise-in-ph-prices

ING: Peso to gain more ground in the next two years and the domestic economy moving toward a higher trend growth rate of 6-7%. There is still some room for local stock market to rise although valuations are “quite stretched;” so re-rating is needed to give legs to a further run-up. If Q1 GDP exceeded expectations, PPP would move forward in in next 3-4 months, could fuel bull run. Peso to appreciate 39.50 to the dollar. And further to 38.50 in 2014.

http://business.inquirer.net/106757/peso-seen-to-rise-in-next-2-years

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