Trader's Logbook

Dow    13,954.42 up 72.49 pts.

S&P    1,507.84 up 7.66 pts.

U.S. stocks advanced, sending the Dow Jones Industrial Average to a five-year high, as companies including Pfizer Inc. and Valero Energy Corp. reported earnings that beat estimates.

Stocks have been climbing higher for most of the past year as worries about the European sovereign debt crisis have receded, and the global economy continues to prove its resilience.

Note: The Dow and S&P closed at all-time highs of 14,164 and 1,565 in October 2007.

Bloomberg, Cnn Money

Local / News

AC, GLO have purchased bid documents for the P1.72 billion for common ticket system of LRT1, LRT2, MRT3. Similar to Hong Kong’s “Octopus” card, the Philippine version would allow daily commuters to use a single ticket when they ride the Light Rail Transit Lines 1 (LRT 1) and 2 (LRT 2), as well as MRT 3. The three rail services have a combined ridership of a million a day.

Notes:

• In 2006, GLO launched G-Pass which requires a stored-value chip to be tapped on a sensor lodged at the gates of the MRT 3. The chip can be reloaded using GCash. The G-Pass service was phased out in 2009 because of problems in the platform.
• The group is looking at three sectors on the transportation side: it is the airport, toll roads and rail; other projects like ticketing, which is a support system, is also affiliated in the transport sector.
• 22 firms purchased bid documents for the unified ticketing system for the country’s three mass rail services.

http://www.interaksyon.com/business/53842/ayala-group-to-bid-for-common-ticket-system-of-lrt1-lrt2-mrt3

EEI is keen on participating in the government’s public-private partnership (PPP) program, particularly roads, bridges, ports and airports. The co. however has non-disclosure agreements for its participation in the infrastructure projects, adding that the company has been approached “as builders, not as investors.”

Notes:

• Earlier expressed its interest in bidding for the rehabilitation, as well as the operation and maintenance, of the Angat hydropower plant.
• CEO Roberto Jose Castillo says outlook for the company continues to be rosy even without the impact of PPP projects. At-end September 2012, EEI had P18.63 billion worth of in-progress portions of existing contracts. Foreign operations continue to account for about 60% of business despite concerns of a global economic slowdown.

http://www.interaksyon.com/business/53845/eei-keen-on-ppp-projects

IP unit EG is beefing up its capital to P50 billion to accommodate the entry of new investors and to raise equity to bankroll its venture into the gaming tourism business – 5 trillion shares with a par value of one centavo from the existing P300 million comprised of 30 billion shares with a par value of one centavo.

Proceeds of the issuance of new shares would be used to buy into large gaming and resort development projects. EG acquired 36,000 square meters of land at the planned casino complex in the Cagayan Special Economic Zone. It is also looking at acquiring another property worth about P70 million also in Cagayan as well as two more properties in Metro Manila and in a popular tourist destination in the Philippines.

http://www.philstar.com/business/2013/01/30/902538/ipe-games-hikes-capital-p50b

LTG subscribed to 380 million shares of Solar Holdings Corp and 900 million shares of Caravan Holdings Corp, partially paid by way of conversion into equity of the listed holding firm’s advances to the latter two firms. Solar and Caravan each own a 13.81% stake in ABC. LTG will become the controlling shareholder of Solar and Caravan, holding 95% and 90%.

Notes:

PNB-ABC merger is set on February 9

• LTG is the holding firm for Tan’s beer, liquor, tobacco, real estate and banking businesses. It has been subscribing to shares in Asia Brewery Inc, Fortune Tobacco Corp and Eton Properties Philippines Inc.
• The company is reportedly eyeing to hold an equity offering involving about 3 billion new shares in April.

http://www.interaksyon.com/business/53808/lucio-tan-holding-firm-acquires-2-shareholders-of-allied-bank

MEG, I-Remit (I) seal a real estate collection scheme, to improve the collection efficiency of the property firm. I will act its real estate collection and remittance agency for their clients worldwide including Filipino workers, immigrants and other nationalities.

http://www.philstar.com/business/2013/01/30/902539/megaworld-i-remit-seal-collection-scheme

MER power unit Meralco PowerGen Corp, GTCAP power unit Global Business Power Corp. (GBPC) to sign a Memorandum of Understanding (MOU) to jointly pursue power generation projects in Mindanao – “more-or-less” 50-50, under which GBPC will develop the power projects while MER will have opportunity to invest. Other reports indicated that these projects could be 4 coal-fired power plants in Mindanao; “some of the projects are around 100MW.

Note:

• MER is developing a diversified power portfolio of up to 2,700MW in the next 5 years which may consist of two 600-MW coal-fired power plants that are expected to cost roughly $2.6 billion and combined and liquefied natural gas (LNG) facilities that can generate a total of 1,500 MW.
• It has taken a majority stake in Redondo Peninsula Energy Inc., which is developing a 600MW coal project in Subic.
• MER continues to look for opportunities in grids outside Luzon and potentially even outside the Philippines.

http://www.rappler.com/business/20674-meralco,-global-power-to-build-4-power-plants-in-mindandao?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rappler+%28Rappler%29

PNX said its revenue grew over a quarter last year on account of its expansion. PNX sales ncreased 26 percent to P34.7 billion in 2012 compared with P27.5 billion in 2011. Market share rose to 6% in 2012 from 5.4% in 2011. The co. however did not disclose full-2012 earnings.

Note:

In Q3 2012, its net income jumped 45% to P252.4 million from the previous year’s P173.8 million. At the close of 2012, the company had 300 retail outlets, 191 of which are in Mindanao, 21 in the Visayas and 88 in Luzon.

http://www.interaksyon.com/business/53835/phoenix-petroleum-grows-more-than-a-quarter-in-2012

SMC is looking to pay off its debts through new loans worth about $2 billion – $1 billion through five-year loans to repay the $1-billion, five-year funding it secured from banks in 2010. It is also looking at generating $300 million for its working capital. SMC was reportedly in talks with Deutsche Bank and Standard Chartered Bank to draw a $650-million, one-year loan to buy back $600-million exchangeable bonds due next year.

http://www.philstar.com/business/2013/01/30/902535/san-miguel-seeks-2-b-new-loans

DOTC: The DOF has endorsed the establishment of a train service that would run from Bulacan to Quezon City. Implementing guidleines will go to NEDA-ICC and goes to the DOF for issuance of performance undertaking. The “improved” concession agreement for the project would be signed soon. Costing $2.2 billion, the MRT 7 project was supposed to start commercial operations this year had construction begun in 2010 as scheduled. The project was delayed for 5 years because of proponent’s failure to secure performance undertaking. The DOTC and proponent Universal LRT Corp (ULC) signed the contract to build the railway in 2008. SMC, through unit San Miguel Holdings Corp (SMHC), is 51% owner of ULC.

http://www.interaksyon.com/business/53840/after-5-years-in-the-back-burner-govt-revives-mrt-7-project

Local / Sector

Biz Buzz, Inquirer

Mactan change of heart / (JGS, SMC) The government is reviewing its earlier policy of barring companies with stakes in airlines from bidding for the redevelopment of the Mactan-Cebu International Airport terminal. The party that pushed really hard for the policy to be amended was a local bidder who had planned to bring in a foreign airport operator as its partner, also stakeholder in the largest airline in that foreign country.

http://business.inquirer.net/104989/biz-buzz-from-fr-doom-to-dr-boom

 Local / Economy

Finance Secretary Cesar Purisima: Nation to keep deficit target of 2% of GDP this year until end of President Benigno Aquino’s term in 2016.

President Benigno Aquino: “All of us will be impressed” with last year’s economic growth, tells reporters in Manila, adds 2012 GDP growth target of 5%-6% “definitely” exceeded. Aquino says he was told by central bank that there’s need to absorb dollars in system to lessen pressure on peso. According to median forecast in Bloomberg, the economy grew 6.4% last year. Official data is due Jan. 31.

Economic Planning Secretary Arsenio Balisacan: Government keeping GDP growth target of 6% – 7% for 2013 as external risks remain.

Market Outlook

Biz Buzz, Inquirer

From Fr. Doom to Dr. Boom / Nouriel Roubini, famous for having predicted the 2008 collapse of the US housing market, which eventually led to a global recession, prefers the Philippines and Indonesia as investment destinations compared to the over-hyped powerhouses such as China and India. Expect Dr. Doom to say good things about the long-term growth prospects of the Philippines and predict that the country will receive the coveted investment grade this year.

http://business.inquirer.net/104989/biz-buzz-from-fr-doom-to-dr-boom

Read more at itrade.ph