U.S. markets closed for Martin Luther King holiday. European stocks near 2-year high ahead of international economic meeting in Davos. ACR, AP, JFC, LOTO, MJIC, MJC, PCOR, PGOLD, SM/SMPH, Waltermart, Zest Airways, Zest-O.
European stocks near 2-year high as euro-area finance ministers met for the first time this year to address the region’s debt crisis. The international economic meeting in Davos, Switzerland will start Wednesday which is also when IMF publishes an updated outlook on worldwide economy. U.S. markets closed for Martin Luther King holiday. Futures advanced.
Local / News
ACR set to tap new loan facilities to help raise funds for roughly P14 billion worth of power projects in Mindanao – P12.7 billion to fund the planned 105MW coal-fed power project in Talisayan, P1.2 billion for the reacquisition and rehabilitation of the 105MW Iligan diesel-fed power plant. The Iligan plant will undergo immediate rehabilitation and operation in time by summer months April and May to provide power to Mindanao.
AP has contracted nearly half the capacity of its upcoming 300MW coal power plant in Davao, Mindanao. The plant is on track to be completed by early 2015.
JFC plans to enter the Indonesian market even as mid-term elections provide a boost to sales this year. It is also looking at China and India. JFC will continue its domestic and overseas expansion, setting a capex budget of P5.5 billion (vs. P4 billion in 2012), to roll out 300 new stores across its different brands. JFC is looking at China, saying it is still expanding, as well as India. JFC grew by double-digits in terms of earnings and sales in 2012 – something that could be sustained this year, according to Chairman Tony Tan Caktiong. JFC grew its profits by 21.4% to P2.52 billion from P2.073 billion last year on the back of strong sales and better margins.
LOTO said sales hit a record last year, rising 23% year-on-year to reach an all-time high of P11.7 billion in 2012. At end-September 2012, LOTO registered a net profit of P281.2 million, 58% higher than the previous year’s P178 million
MJiC issued 73.5 million common shares to “non-related parties to comply with the 10-percent public float requirement.” These were on top of the 15.17 million non-public shares that were sold through the exchange on Monday for compliance.
Parent firm, MJC sold 33% of the former to a Hong Kong-based consortium for P450 million, divided into 450 million common shares at P1 each; shares to be locked up for 2 years. The company is developing its first project, a five-star hotel, tourism and entertainment hub on a 7,500-square-meter site at the San Lazaro Tourism and Business Park.
PCOR will tap the debt market this year to help fund its capex program. The company will issue dollar-denominated debt this year but no amount or other details were disclosed.
Note: In the first nine months of 2012, Petron reported its consolidated net income plunged to P932 million from P7.6 billion a year earlier, largely on depressed margins in global markets.
The company also said its consolidated net income of P500 million was down by 68% from P1.56 billion a year earlier.
PGOLD completes acquisition of 4 Eunilane food marts and 11 Grocer E supermarkets for P330 million. PGOLD purchased 290,000 common shares of Company E Corp at P1,137.93 per share, representing 5.5x the 2013 estimated net income. The stores are expected to be renovated and rebranded into PGOLD stores. Company E’s earnings are estimated to hit P5.79 million, down 8.87% from P6.35 million a year ago. PGOLD will then expand its store network to 171 stores including 131 Puregold hypermarkets, supermarkets and extras; 19 Parco supermarkets; and 6 S&R warehouses. It previously targeted 200 stores by 2015 but is seen to reach this ahead of schedule.
(SM, SMPH) Sy group will not push for management control of the upcoming venture between its malls unit and the Waltermart Group, saying it’s a 50-50 partnership.
Owned by the Lim family, Waltermart is engaged in the shopping mall and supermarket business. It has 17 malls located in Metro Manila, Batangas, Laguna, Cavite, Bulacan, Pampanga and Nueva Ecija. The Lim family also owns Abenson, a chain of appliance stores with over 75 outlets nationwide; concept store Avant, which carries the latest high-end technology products currently available in the market; Electroworld; and Home Plus.
Zest Airways to focus on Chinese travelers as owner Alfredo Yao notes that cancellation of bookings by Chinese tourists to PHL destinations from April-November 2012 has turned the corner and picked up speed again. About 50 million Chinese tourists are seen going to various destinations in Southeast Asia this year.
Zest-O is in talks to build manufacturing plants in China and Myanmar worth P250 million each, following what the company did in the PHL for RC cola. Myanmar is on the brink of economic resurgence as it opens up to foreign investment and trade following decades of military rule. “Galing ‘yan [Myanmar] sa embargo. Like you’re pouring water in the dessert area,” said owner Alfredo Yao.
Note: Zest-O has production plants in the Middle East and Indonesia, with operations abroad accounting for less than a tenth of the company’s total business. It exports products to China, Indonesia, Vietnam, the Middle East, and the United States.
Local / Sector
Finance Secretary Cesar V. Purisima pushes for idea of auctioning mining contracts.
Note: In July last year, the government unveiled a new mining law that aims to generate more revenues, improve environmental standards and make national and local laws consistent with each other. The government imposed a moratorium on new contract at least until a law on sharing mining revenues is passed by Congress.
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