DA Market Securities 
No Comments DA Market Securities Morning Brief February 5, 2013
U.S. stocks fell on concern that the European debt crisis may intensify; smaller-than-forecast increase in American factory orders. GLO, ICT, MER, MPI, JGS, PNX, PX, SECB, AC, GLO, Deficit, Bonds, Inflation.
International
U.S. stocks fell, driving the S&P 500 to its biggest decline of the year, on concern that the European debt crisis may intensify and a smaller-than-forecast increase in American factory orders.
Local / News
GLO postpaid subscriber base grew by 19% to 1.7 million in 2012 from 1.4 million in 2011 on higher sales of iPhone 5 units and a lower churn rate. The co. will announce its 2012 financial results tom, Wednesday, February 6.
http://www.interaksyon.com/business/54292/globe-reports-19-pct-growth-in-postpaid-subscribers
ICT said it secured a 30-year contract to operate and maintain a container terminal in Honduras. The container and general cargo terminal of Puerto Cortes will have 1,100 meters of quay for containers and 400 meters for general cargo, 14 meters of draft (that can reach 15 meters), 62.2 hectares of total surface area, 12 ship-to-shore (STS) cranes and an annual volume capacity of about 1.8 million twenty-foot equivalent units (TEUs).
http://www.interaksyon.com/business/54274/ictsi-bags-30-year-contract-to-operate-honduras-port
MER to spend up to P95 billion up to 2019 to boost its power distribution and generation business and is eyeing opportunities elsewhere in Asia.
- Of the P95 billion, P65 billion will be allocated for distribution, while power generation will take the remaining P30 billion. For 2013, MER has earmarked a capex of P13 billion. MER is looking at countries like Vietnam, Myanmar, China and Thailand.
- The aim is to do this in joint venture with other companies, and second this will be fully funded by financing overseas so that they will be self-liquidating, that we will not be utilizing our own funds
Note: The co. increased customers by 3.2% to 5.19 million in 2012 from 5.03 million in 2011, and grew sales by 7.1% to 32,771 gigawatt-hours (GWh) last year from 30,592 GWh in 2011. Meralco has yet to release its 2012 annual report.
(MPI, JGS) MVP, Gokongwei groups – already allies in giant Philippine Long Distance Telephone Co. (TEL) – are moving into the airport business, a possible joint bid for the Mactan-Cebu airport expansion project. On Feb. 1, DOTC revised the bidding guidelines to allow limited participation by airline companies following a concern banning them might affect foreign investments. Other companies eyeing the airport project include the Ayala and Aboitiz groups (AC, AEV), San Miguel Corp. (SMC), and foreign companies Samsung C&T Corp. and Malaysia Airports Holdings Berhad.
MPI is again tweaking its proposal to the government as it seeks to finally bag the concession for the 94-kilometer Subic-Clark-Tarlac Expressway (SCTEx). The company already submitted an “improved” offer last year which involved increasing total nominal proceeds for the government to P90 billion from almost P65 billion; But this version appears to have been rejected by President Aquino, who needs to approve the concession agreement.
PNX consolidated net earnings grew by 16% to P643.3 million last year from P556 million in 2011 brought about by the 26% increase in fuel sales volume during the year plus additional revenues amounting to P274 million from the consolidation of Chelsea Shipping Corp., which was acquired in 2012. Chelsea’s income from its operations in 2012 will reflect as the income of Phoenix being a fully owned subsidiary. The co. grew its stations to 300 in 2012 from 220 in 2011; and market share to 6% from 5.6%.
SSS with P18.7 billion invested will benefit form re-opening of PX’s Padcal mine. SSS reportedly owns 21.5% of the mining company (1,063,009,428 shares as of yearend).
http://m.philstar.com/315469/show/dc6163635d7e534d2fe084c7042b7d7e&t=4880lpgui1212cea2gv5tjgm13
SECB said unaudited earnings for 2012 rose 12% to P7.5 billion from P6.7 billion in 2011, when profit hit a record, as trading gains grew by almost half from a year ago. Net interest income +8% despite low interest rate; however, net interest margin last year narrowed to 3.94% from 4.08% in 2011. Customer loans grew 30% to P119.6 billion, whereas deposits also expanded by 19% to P142.4 billion. Non-interest income jumped 44%, mainly due to higher trading gains on securities, as well as fee-based income. Total assets P259.5 billion (+21%), NPL 1%, Reserve Cover at 213%, CAR 16.3%, TIER 1 CAR 14.7%.
http://www.interaksyon.com/business/54290/security-bank-grows-2012-earnings-by-12-pct
Local / Sector
DOTC moved to March 14 at 2:00 p.m. from the original deadline of February 14 the deadline for the submission of qualification documents for the P1.72 billion Common Ticketing System for Metro Manila’s overhead mass rail services. AC, GLO were among those that purchased bid documents for the project.
http://www.interaksyon.com/business/54284/timetable-for-lrt-mrt-common-ticketing-project-pushed-back
Local / Economy
Budget Secretary Butch Abad: Spending rose in Dec. on infrastructure. 2012 deficit ranged from 2%-2.3% of GDP. Dec. spending included Php20 billion capital infusion of government to BSP. Note: Shortfall in first 11 mos. of 2012 was Php 127.3billion.
Philippines’ 91-, 182- day bill yields held near record lows. Average yield of 91-day notes unchanged at record low 0.05%, 182-day rose to 0.33% from 0.3% on Jan. 7 auction.
DBS: Inflation likely inched up to 3% from 2.9% in December. Amid impressive growth, price pressures are likely to build over the coming quarters and inflation is set to edge up moderately. The government is scheduled to release the January inflation numbers today. DBS sees a “fairly strong” turnaround in the Chinese economy, which could push oil prices higher noting that Brent crude prices have already stayed above $115 per barrel.
http://www.interaksyon.com/business/54280/inflation-likely-picked-up-in-january—-dbs
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