Sunday, March 2, 2014

Del Monte ’13 profit down to $16.1M








Food manufacturer Del Monte Pacific Ltd. halved its 2013 net profit to $16.1 million due to one-time expenses arising from its big US consumer food business acquisition and the listing of its shares on the local stock market.


Taking out nonrecurring expenses, last year’s net profit would have risen by 5 percent to $33.9 million, DMPL told the Philippine Stock Exchange last week.


DMPL’s net profit in 2012 amounted to $32.2 million.


“The full year 2013 results —without the nonrecurring expenses—were in line with earlier guidance that the group’s 2013 profits are expected to be better compared to that of the same period last year,” the company said.


For 2014, DMPL expects to generate higher earnings on a recurring basis in the first quarter but report a lower nonrecurring net income afterwards due to one-off transaction fees in closing the $1.675-billion acquisition of Del Monte Foods’ US business.


DMPL plans to align its fiscal year with that of Del Monte Foods (May to April financial year), as the US business is expected to account for about 80 percent of the enlarged group’s sales.


“Group earnings will improve in the new financial year 2015 (May 2014-April 2015) as it drives both top-line growth across its key markets in the USA, the Philippines and rest of Asia, optimizes synergies and manages cost actively,” DMPL said.


Last year’s group turnover grew by 7 percent to a record $492.2 million, attributed to better performance for the Del Monte brand in the Philippines and in the Indian subcontinent and S&W in Asia and the Middle East. Doris C. Dumlao



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Magat plant repairs done by mid-2014

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SN Aboitiz Power-Magat, Inc. (SNAP-Magat) is set to complete the rehabilitation of the 360-megawatt Magat hydro power plant for optimal performance.


This is seen to boost power resources in Luzon ahead of 2015, a period of tight power supply as new large-scale power plants have yet to be built.


“We put it down the middle of January of this year and we expect that to be running early June or earlier than that,” SNAP president Emmanuel Rubio told reporters, referring to the last unit of Magat to be overhauled.


SNAP-Magat is working on Unit 1 of the power plant, with electro-mechanical equipment being replaced at a total cost of about P500 million. When completed, the facility will be good as new.


Company VP for corporate services Michael Hosillos said three units of the hydro power plant were earlier refurbished at a cost of about P1.3 billion.


In 2009, SNAP began the refurbishment project with Unit 2, which was overhauled that same year. Work on Unit 4 followed in Nov. 2010 and was completed in 2011. Unit 3 was completed in 2013.


SNAP-Magat is Aboitiz Power’s joint venture company with SN POWER, a leading Norwegian hydropower company with projects and operations in Asia, Africa and Latin America.


On Dec. 14, 2006, SNAP-Magat participated in and won the bid for the 360-MW Magat hydroelectric power plant for $530 million.


The Magat hydroelectric power plant, at the border of Isabela and Ifugao provinces in northern Luzon, was completed in 1983. It is suitable as a peaking plant since it can be started up quickly to provide electricity during times of high demand.



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Tags: Business , electricity , Energy , Inc. , News , power industry , SN Aboitiz Power-Magat



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Money supply expansion hits new record high


Growth in the country’s money supply accelerated to another record high in January amid high demand for loans to support the domestic economy’s expansion, central bank data showed.


The Bangko Sentral ng Pilipinas (BSP) said January numbers were also coming from a low base due to the slow growth in domestic liquidity in the same month a year ago.


Domestic liquidity or M3, referring to the amount of money circulating in the economy, rose 38.6 percent, higher than the 32.7 percent recorded in December. This also beat the previous record set in November when M3 rose 36.5 percent year-on-year.


“Money supply continued to expand due to higher demand for credit in the domestic economy,” the BSP said in a statement issued late Friday.


The acceleration in money supply growth comes amid concerns over rising consumer prices as a result of higher costs of basic commodities like food and fuel, which may be exacerbated by the increase in the amount of cash in people’s hands.


Inflation in January reached 4.2 percent—the fastest in two years. The BSP expects inflation to settle between 3.8 percent and 4.6 percent in February.


“The BSP will continue to assess the medium-term impact of strong monetary growth on the outlook for inflation as well as on financial prices,” the BSP said.


The uptick in M3 growth was mainly driven by higher bank lending for the month, the central bank said. In January, loans extended by the country’s major banks jumped 17.1 percent, faster than the 16.4-percent growth the month before.


Loans for production activities, which comprised more than four-fifths of banks’ aggregate loan portfolio, expanded further by 16.2 percent in January from 15.3 percent in December.


The expansion in production loans was driven primarily by increased lending to the following sectors: Real estate, renting and business services (which grew by 17.3 percent); electricity, gas and water (29.6 percent); wholesale and retail trade (16.2 percent); manufacturing (12.7 percent), and other community, social and personal services (46.5 percent).


“The sustained growth momentum of credit reflects the stable financial conditions and continued solid growth prospects of the domestic economy,” the BSP said in a separate statement.


Public sector credit also helped drive growth in domestic liquidity, reflecting higher spending by the national government for various projects.


Public sector credit climbed 15.2 percent due to withdrawals by the national government of its deposits with the BSP to fund the redemption of bonds and spending on public works projects.


Meanwhile, net foreign assets (NFA) in peso terms also expanded by 8.7 percent, reflecting in part the higher valuation of foreign assets due to the depreciation of the peso relative to year-ago levels.


BSP Governor Amando Tetangco Jr. said that inflation was expected to be consistently higher this year than last year’s average of 3 percent due to supply-side pressures, including disruptions caused by recent natural calamities.


Nonetheless, he stressed that inflation this year, which is expected to stay in the 4-percent territory, would remain manageable and within the official target of 3 to 5 percent. “We see inflation inching up but still remaining manageable over the policy horizon,” Tetangco said in a speech during an economic forum organized by Security Bank.


The BSP expects the Philippines to remain in the so-called “sweet spot” this year, with inflation staying within target even if economic growth stays robust. Tetangco said productive capacity and efficiency in the economy have improved over the years and these were the reasons why the rising demand for goods and services was not causing worrisome inflation.





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Saturday, March 1, 2014

‘Halo-halo’ takes Peninsula world by storm



THE PENINSULA Manila General Manager Sonja Vodusek



The target was to raise $500,000 to help the victims of Supertyphoon “Yolanda” that hit the Philippines hard on Nov. 8, 2013.


The Peninsula Hotels, however, was able to collect more, making the Yolanda campaign the biggest fundraising event so far of the luxury hotel group, according to The Peninsula Manila general manager Sonja F. Vodusek.


Vodusek spearheaded the program, spurred by the desire to contribute to the massive effort to bring the Yolanda-hit areas and residents back on their feet.


The fundraising campaign was called “Hope for the Philippines.” Through this program, guests in all nine Peninsula hotels—Hong Kong, Shanghai, Beijing, Tokyo, New York, Chicago, Beverly Hills, Bangkok and Manila—were offered a special menu of Filipino favorites from Nov. 22, 2013 to Jan. 31 this year, the proceeds of which would go to rebuild homes and communities in the typhoon-hit areas.


The star of the menu was the halo-halo and the Philippine-themed “Tea of Hope,” which proved to be big hits with the guests, as well as the staff members of the different properties.



THE PENINSULA Tokyo Afternoon Tea



Halo-halo was chosen as it is considered iconic and emblematic of the Philippines. It is also fun, festive and easy to replicate in all kitchens.


In Bangkok, for example, the employees had a halo-halo appreciation day, during which the employees made and then bought their own halo-halo, which featured ingredients flown in from the Philippines.


In Hong Kong, the chilly weather did not help sell a lot of halo-halo, but the Philippine Tea of Hope was a huge success. Over 200 of the three-tiered tea sets were sold. The sets contained bistek Tagalog tortilla wrap, chicken empanada, egg salad and smoked salmon sandwich, pan de sal with pulled pork adobo and slaw, Baguio vegetable spring roll, traditional Pinoy leche flan, coconut dome, caramelized banana cashew tart, mango opera cake, coconut cookies and mango scones with calamansi curd.



THE PENINSULA Manila Halo-halo of Hope



“It was a very Pinoy twist to the campaign, a way of branding the Philippines in another way,” Vodusek says.


The “Hope for the Philippines” also comprised of a donation for each guest stay and the “Trees of Hope” in each hotel.


The Peninsula Hong Kong ended up with the biggest contribution at $181,517, followed by The Peninsula Manila at $173,961.81, and The Peninsula Tokyo at $102,263.77.


The campaign also marked the first time that the halo-halo was offered in all nine Peninsula hotels at the same time.


The “Hope for the Philippines” campaign kicked off on Nov. 15, 2013 in the Philippines and Nov. 22 in the other properties. It concluded on Jan. 31, giving The Peninsula Manila the funds it needed to proceed with the plan to put up a Peninsula village in the Visayas, in partnership with Gawad Kalinga.


Gawad Kalinga was founded in 2003, and The Peninsula Manila has been working with the group since 2008.


According to Vodusek, guests around the world and the Peninsula management passionately responded to the call to help in the “Yolanda” rehabilitation because Filipinos “touch everybody.”



THE PENINSULA Hong Kong Hope for the Philippines Afternoon Tea



“Filipinos are all over. From the medical care personnel to the professionals and domestic help, somebody has been touched by a Filipino,” says Vodusek, who has been working with Filipinos throughout her career. “That is why the generosity has been overwhelming.”


The Hope for Japan, which was launched after a series of disasters hit that country, was the first group-wide effort where some $500,000 was raised.


When Vodusek and her team proposed that a similar campaign be implemented for the Philippines, the group board did not hesitate and threw its full support behind the program.



THE PENINSULA New York Hope for the Philippines tree



Foremost on everyone’s minds, she says, was how to help, which was why the campaign was embraced wholeheartedly.


The next stage is for the team to go to the stricken areas and identify exactly where the Peninsula village will be set up.


“Once we get all the figures, we will work with the Gawad Kalinga team and discuss options on where to build. We want to make sure that the site for the Peninsula Manila Village is clear,” Vodusek says. “Our long-term vision is to put up a school there, and have a farm, just to keep that sustainability.”


Thus, Vodusek says, The Peninsula Manila will gear all of its fundraising activities toward financing the village. These include the Pink Month in October that seeks to raise breast cancer awareness, and the Christmas programs.


Vodusek adds that The Peninsula Manila will not just provide cold cash to establish the Peninsula village. What is more important, she says, is for the spirit of charity to live in the hearts of the employees and express this by being intimately involved in the outreach programs.


“Charity begins at home,” Vodusek says, “We plan to fly our employees over there so that there will be a buy-in to the program. We have done other programs, but never on this scale.”


Employees will be involved with the local government units, and hotel management and staff will be involved in the actual building of the houses. The Peninsula Manila group is even looking at the possibility of being involved in livelihood projects and starting a college scholarship fund at a local university.


Vodusek is confident that the employees will heartily respond to the challenge to be involved considering that volunteerism and social responsibility are in the genes of the Peninsula group, one of the world’s most exclusive hotel chains.


“We want to be a good neighbor, and we have been involved in these programs even before corporate social responsibility became popular,” says Vodusek. “This is part of the culture, the DNA of the company.”





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Buyers or Sellers


If you follow our blog, then you are definitely familiar with trader Larry Levin, President of Trading Advantage LLC. We have gotten such a great response from some of his past posts that he has agreed to share one more of his favorite trading tips as a special treat to our viewers. Determining the direction of the market can be tricky and just plain confusing at times, but Larry’s expert opinion keeps it simple and straight-to-the-point.


If you like this article, Larry’s also agreed to give you free access to his Weekly Trading Tip.


A question I often receive is, "How can there be more buyers or sellers at one price? Isn't there a buyer for every seller and a seller for every buyer?"


The answer is yes, but people are forgetting one important thing. There is a bid and an ask (or offer), and only one of them can be traded at a time.


A bid is an expression of willingness to buy at a price; an ask (or offer) is an expression to sell.


If the ES is trading at 1200.50, the bid is either 1200.25 or 1200.50. The answer depends on which way the market has just traded. Let's make it easy and simply say the ES is between 1200.25 & 1200.50, making the bid 1200.25. In order for the market to move from 1200.25 to 1200.50, someone must pay up to get filled.


You may not be in a hurry and attempt to wait to buy 1200.25, but that will usually only happen when the bid/ask drops to 1200.00 & 1200.25 and you are actually filled on the ask.


If you are trying to buy and really want to get filled, you must pay up at the offer or risk missing the trade. Conversely, if you really want to get filled on a sale, you must hit the bid, or reach down to get filled.


Sure, there is someone on the other side of the trade, but without you choosing to reach up and pay the offer the market stands still. Therefore when trades are executed at the offer it is said to be done by the buyers even though there are sellers at that price taking the other side.


Every buy will be filled on the offer and every sell will be filled on the bid, period.


Let's say we once more have a number of 1200.50 and we see that over time (sometimes just a few seconds) the fills were 100 x 1300. We can say that there were 1200 more buyers than sellers at 1200.50 because of how traders reacted to the bid/ask spread when it was at 1200.25 x 1200.50 and higher at 1200.50 x 1200.75 (called the spread.)


When the market was at the lower spread, 1300 buyers reached UP to pay the 1200.50 offer.


When the market was at the higher spread, 100 sellers reach DOWN to sell the 1200.50 bid.


When the spread traded around this price range there truly were more buyers than sellers at 1200.50.


Understanding bid and ask can open up other realms of technical analysis.


There are some traders who will look at the bid and ask order flows to try to get clues to potential movement in the market based on what buyers and sellers are doing. This is often referred to as reading order book flow or depth-of-market.


If you look at the number of orders for each bid and ask around the current market price you can see the probable number of transactions available at those levels. Reading this information is the key to certain kinds of volume based trading systems and other trading methods that follow the book order flow.


Click here to see Larry’s Weekly Trading Tip


Larry Levin

President & Founder- Trading Advantage

larry@tradingadvantage.com


Disclaimer: Futures and options trading involves a substantial degree of risk and may not be suitable for all investors. Past performance is not necessarily indicative of future results. Secrets of Traders LLC provides only training and educational information. By accessing any Secrets of Traders or Trading Advantage content, you agree to be bound by the terms of service. Click Here to review the terms of service.



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With no solution in sight for Thailand, investors look to PH, Indonesia



Protesters chant slogans in support of Prime Minister Yingluck Shinawatra and her government outside the gate of the National Anti-Corruption Commission office in Bangkok, Thailand, Thursday, Feb. 27, 2014. AP



BANGKOK—Foreign investors prefer Indonesia and the Philippines right now as they do not see any sign of a solution to Thailand’s political crisis, Chua Hak Bin, Asean economist at Bank of America Merrill Lynch, told The Nation during an exclusive interview.


“If you had put your money into Indonesia or Thailand five years ago, you would have tripled your investment by now, and it was the same for the Philippines. These were the three best-performing markets in Asia,” he said. However, investors who put their money into China five years ago were lucky if they broke even.


But the situation has changed. Looking forward to the next five years, Thailand is no longer attractive to investors, Chua said.


Key factors


Three key factors make the economic outlooks of the Philippines and Indonesia much better than Thailand’s. These are stable politics, lower levels of debt, and large labor forces, said Chua, head of economics research for emerging Asia at Merrill Lynch (Singapore).


Foreign investors are finding it hard to understand the political situation in Thailand fully, he said. “They worry that the political stalemate may drag on indefinitely.”


He said everyone was waiting for the end of the political crisis, which is undermining the proper functioning of the government.


“We have seen growth collapse in the fourth quarter last year,” Chua said, referring to a sharp slowdown of consumer spending and investment.


The conflict now has dragged on for nearly four months, and some are even wondering if it will last until the second half of the year. There is speculation that an interim government may be formed midyear, and this might provide some relief. But it would raise questions of how long such a government would last, he said.


So far the year the Indonesian and Philippine stock markets have risen by about 7 per cent, while the Stock Exchange of Thailand has been flat.


“If some end games are in sight, the Thai stock market could catch up with these markets. It could go up by 5 per cent, but it is a big if,” he said.


Indonesia will have a legislative election in April and a presidential election in July. But it is unlikely to experience the kind of political unrest that Thailand is facing now.


Household debt


“The second [factor] is the balance sheet: Indonesia’s leverage is very low,” he said.


Thailand has faced fast-rising household debt, which currently is equivalent to 80.1 per cent of gross domestic product, compared with 17 per cent in Indonesia and 6.2 per cent in the Philippines. Higher household debt will lead to lower consumption. Domestic credit in Thailand is relatively high at 103.7 per cent of GDP, compared with 36.6 per cent in Indonesia and 42.4 per cent in the Philippines.


Among Asean economies, Malaysia ranks first in household debt at 86.1 per cent of GDP and Singapore third at 77.1 per cent, while Thailand is between those two.


Demographic change


The third factor is demographic change. Shrinkage of the working-age population will have an impact on Thailand’s competitiveness. As growth of the working-age population in Thailand between 2013 and 2023 will turn negative, that contrasts with high growth rates of more than 20 per cent in the Philippines and 15 per cent in Indonesia, according to estimates by Bank of America Merrill Lynch Global Research.


To boost economic growth, Chua expects the Bank of Thailand’s Monetary Policy Committee at next month’s meeting to cut the benchmark interest rate by 25 basis points, from 2.25 per cent currently to 2 per cent. Inflation is not a cause for concern, he said.


He does not think the BOT will worry much about a weaker baht and the possibility of capital flight. The central bank will be comfortable with a weak baht, which will boost exports, given that domestic demand is so weak. As foreign capital has stopped coming into Thailand, “We’re not worried about capital flight, but if there is such flight it is because of politics, Thais taking their money out,” Chua said.


Regarding the impact of the US Federal Reserve’s scaling back its bond-buying program, Chua said that under the leadership of Janet Yellen, the Fed’s newly appointed chairwoman, tapering of its quantitative-easing policy would be very gradual, and the first increase on the federal funds rate would be in 2016.


Yellen will look at broader economic indicators, no longer relying on the goal of a 6.5-per-cent unemployment rate, since the drop in the US jobless rate has been partly caused by many people giving up looking for work, leading to a lower labor-participation rate.


East Asia and developed markets such as Europe and the United States remain promising as Europe has come out of recession, and the US economy is expected to accelerate after April as pent-up demand bounces back from the effects of severe winter weather.


Though the Dow Jones Index often hits a new record high, Bank of America does not think the US stock market is in a bubble, as the recovery is in an early stage, so valuation is not too demanding.


RELATED STORY


Protest-hit Thai economy slows in 4th quarter





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Friday, February 28, 2014

China’s manufacturing slows to eight-month low








BEIJING—China’s manufacturing activities expanded at the slowest pace since June, amid government efforts to rein in credit and investment growth, according to the industry group China Federation of Logistics & Purchasing.


The federation on Saturday released the purchasing managers index for February, which slid to 50.2, down from 50.5 in the previous month.


The measure is a 100-point scale on which numbers above 50 indicate increasing activity.


China’s economic activity has slowed steadily as the government tries to reduce reliance on investment in industry and infrastructure and encourage more sustainable growth based on domestic consumption.


Analyst Zhang Liqun said the February data could have been distorted by the Lunar New Year holiday, when factories shut down for two weeks when workers went home in late January and early February.


RELATED STORY


Asian shares mostly down after China data



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Tags: China , Investment , manufacturing



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