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Saturday, September 29, 2012

SM plans five more malls in Mindanao

3:37 pm | Saturday, September 29th, 2012

DAVAO CITY, Philippines—Giant mall operator SM Prime Holdings is so bullish about Mindanao consumers, whom it considers power buyers, that it plans to build five more malls on the island within the next four years.

Hans Sy, president of SM Prime Holdings, said that based on a survey conducted by SM Prime Holdings, “Mindanao has a very strong buying power, stronger compared to Metro Manila.”

Metro Manila’s only advantage over Mindanao, he said, was that there were more consumers there. “But per transactions average, Mindanao turned out to have a stronger buying power,” he said.

This strong buying power among Mindanao consumers has encouraged SM Prime Holdings to expand its business on the island.

“Next year we will be opening another SM mall in Cagayan de Oro City (CDO) and another in Butuan City,” he said.

Sy described the upcoming second CDO SM Mall as similar to the one the company has in Olongapo City while the Butuan SM Mall will be similar to the newly opened General Santos City mall.

Negotiations, he said, were ongoing for the building of three more SM malls in Mindanao.

“We have already identified the three sites and negotiations are ongoing,” he said without saying where these malls were to be put up.

When all these are completed, SM will have nine malls in Mindanao.

Sy said SM Prime Holdings was confident the existing four SM malls in Mindanao will contribute 6 to 8 percent of the total revenues of SM malls in the country.

“We are so impressed with the performance of our Mindanao malls. The island has a lot of potential,” he said.

Sy admitted that SM came to Mindanao “a little bit late because we were so focused on the Luzon area.”

Currently, there are 46 malls operated by the Sy family all over the Philippines.

Sy said SM was trying to help spur the country’s development by providing economic opportunities outside Metro Manila.

He said SM Lanang Premier, whose opening he graced on Friday, has 7,000 employees now, including salesgirls, managers, security guards and service crew, and 3,000 more will be hired as the mall and the Park Inn Hotel within it go into full operation.

Most Philippine department stores employ salesgirls on five-month contracts only.

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Short URL: http://business.inquirer.net/?p=84580

Tags: Business , Henry Sy , Malls , Mindanao , Real Estate , regions , Retail , SM

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Friday, September 28, 2012

China manufacturing contracts for 11th straight month

Agence France-Presse

1:27 pm | Saturday, September 29th, 2012

AP photo

BEIJING—China’s manufacturing activity shrank for an 11th straight month in September, HSBC said Saturday, adding to pressure on Beijing to provide fresh stimulus to boost the world’s second largest economy.

The final reading of the purchasing mangers’ index (PMI) released by the British banking giant hit 47.9 this month, a mild improvement from a final reading of 47.6 in August, HSBC said in a statement.

The index is closely watched as it gauges nationwide manufacturing activity, a key sector of the Chinese economy. A reading below 50 indicates a contraction in manufacturing, while a reading above 50 indicates expansion.

China’s official PMI figure for August released earlier this month hit a nine-month low of 49.2.

The final HSBC reading was slightly above the preliminary PMI of 47.8, announced on September 20, and may ease concerns over China’s sharp slowdown.

The latest figure marked nearly a year of continuous contraction since November, underscoring broader economic weakness and shrinking demand in key overseas markets.

New export orders fell at the fastest rate in 42 months, HSBC said, indicating that economic weakness in major export markets such as the United States and Europe were continuing to weigh on the Chinese economy.

Qu Hongbin, HSBC’s Hong Kong-based chief economist for China, said that manufacturing was probably hitting its low-point but that Beijing still needed to introduce further stimulus to help the economy.

“Chinese manufacturing growth is likely to be bottoming out,” he said in a statement.

“However, the sharper contraction of new export orders and the lingering pressures on job markets mean that Beijing should step up easing to support growth and employment,” he added.

“Fiscal measures should play a more important role in the coming months”.

Authorities this year have tried to boost the economy with interest rate cuts and by lowering the amount of cash banks must keep on hand in a bid to spur the kind of lending that could stimulate stronger growth.

There are expectations that the government will take the upcoming week-long public holiday as an opportunity to introduce a new round of stimulus.

China’s economic growth slowed to 7.6 percent in the three months through June, the sixth straight quarter of weakening expansion and the worst result since the height of the global financial crisis.

Weak economic data in the current third quarter have raised fears China’s growth may have slowed for a seventh straight quarter when gross domestic product figures are released next month.

Problems in the broader global economy, including Europe’s prolonged debt crisis and a sluggish recovery in the United States — both major trading partners for China — have been a drag on growth.

Premier Wen Jiabao said this month that China is still likely to achieve its annual economic growth target of 7.5 percent. Even so, that would mark a significant slowdown from 9.3 percent growth in 2011 and 10.4 percent in 2010.

The commerce ministry said this month that China faced “enormous difficulties” in meeting its target to maintain 10 percent growth in trade this year, citing weak overseas demand as the world economy remains under pressure.

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Short URL: http://business.inquirer.net/?p=84570

Tags: Business , China , economy , manufacturing

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Stocks close the week with a loss

After showing a strong upward move over the course of the previous session, stocks gave back some ground during trading on Friday. Selling pressure waned as the day progressed, however, and the major averages ended the session well off their worst levels.

The major averages moved roughly sideways going into the close, stuck in negative territory. The Dow fell 48.84 points or 0.4 percent to 13,437.13, the Nasdaq slid 20.37 points or 0.7 percent to 3,116.23 and the S&P 500 dropped 6.48 points or 0.5 percent to 1,440.67.

For the week, the major averages all posted notable losses. The Nasdaq tumbled by 2 percent, while the Dow and the S&P 500 fell by 1 percent and 1.3 percent, respectively. Nonetheless, the major averages all showed upward moves for the month of September and the third quarter.

The moderately lower close on Wall Street on Friday came amid lingering concerns about Europe as well as the release of disappointing U.S. economic data, including a report showing an unexpected contraction in Chicago-area business activity in the month of September.

The Institute for Supply Management – Chicago said its business barometer dropped to 49.7 in September from 53.0 in August, with a reading below 50 indicating a contraction in business activity. With the drop, the barometer fell to its lowest level in three years.

A separate report from Reuters and the University of Michigan showed that consumer sentiment improved by less than previously estimated in September, although the consumer sentiment index was still at a four-month high.

Before the start of trading, the Commerce Department released a report showing that personal income edged up by 0.1 percent in August, matching the downwardly revised increase reported for July.

The report also showed that personal spending rose by 0.5 percent in August, although the increase was largely due to higher gas prices. When adjusted to remove price changes, spending inched up by just 0.1 percent.

However, a positive reaction to the results of a stress test of Spanish banks helped to lift stocks off their lows, with the results coming in roughly in line with estimates.

The results of the stress test showed that Spanish banks have a combined capital shortfall of 59.3 billion euros compared to estimates for about 60 billion euros.

Among individual stocks, Nike (NKE) ended the day in the red after the athletic apparel giant reported stronger than expected first quarter results but also reported future orders that trailed estimates on weak demand from China. Shares of Nike fell by 1.1 percent.

Sector News

Steel stocks saw significant weakness on the day amid continued concerns about the outlook for global demand. The NYSE Arca Steel Index fell by 1.4 percent, extending the sharp downward move seen throughout the past two weeks.

ArcelorMittal (MT) and L.B. Foster (FSTR) turned in two of the steel sector’s worst performances, sliding 3.6 percent and 3.2 percent, respectively.

Considerable weakness was also visible among networking stocks, as reflected by the 1.5 percent loss posted by the NYSE Arca Networking Index. Adtran (ADTN) helped to lead the sector lower, tumbling by 9.8 percent after cutting its third quarter guidance.

Housing stocks also showed a notable move to the downside, dragging the Philadelphia Housing Sector Index down by 1.5 percent.

Tobacco, airline, and trucking stocks also came under pressure, while most of the other major sectors ended the day showing relatively modest moves.

Other Markets

In overseas trading, stock market across the Asia-Pacific region moved mostly higher on Friday, although Japanese stocks bucked the uptrend. While Japan’s Nikkei 225 Index fell by 0.9 percent, Hong Kong’s Hang Seng Index rose 0.4 percent and China’s Shanghai Composite Index jumped 1.5 percent.

Meanwhile, the major European markets turned lower over the course of the trading day. The French CAC 40 Index tumbled 2.4 percent, while German DAX Index fell 1 percent and the U.K.’s FTSE 100 Index dropped 0.7 percent.

In the bond market, treasuries ended the day nearly flat after failing to sustain an early upward move. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.637 percent.

Looking Ahead

Next week, trading is likely to be driven by two key events, a European Central Bank meeting on Thursday and the Labor Department’s monthly U.S. jobs report on Friday.

Ahead of those two major headlines, trading could be impacted by the release of reports on construction spending, manufacturing and service sector activity, and private sector employment.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, and traders may be interested in the discussions that led up to the decision to provide further stimulus. (RTTNews)

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PAL to acquire 10 more Airbus jets

By Paolo G. Montecillo

Philippine Daily Inquirer

1:15 am | Saturday, September 29th, 2012

PAL BUYS AIRBUS JETS. Philippine Airlines has inked with Airbus the biggest aircraft deal in Philippine history involving a firm order for more than 50 single-aisle and wide-body jets which are shown in this photo, with a list price of approximately US$7 billion. CONTRIBUTED PHOTO

Flag carrier Philippine Airlines (PAL) has exercised an option to acquire 10 more wide-body, long-haul Airbus planes from European manufacturer EADS as the company slowly phases out its old gas guzzlers in favor of more efficient aircraft.

The new planes would be on top of a previous batch of 10 Airbus A330 jets, which are part of an original order to buy 54 planes from EADS worth $7 billion.

PAL president Ramon S. Ang said the new planes would bring the worth of the company’s new orders to a total of $10 billion if published list prices were followed.

“The new planes will bring our unit costs down tremendously,” Ang told reporters at the sidelines of the PAL Holdings stockholders’ meeting Friday. “We can save as much as 20 percent per passenger with the new planes.”

PAL Holdings is the flag carrier’s parent company.

Ang described the company’s current fleet of older planes as “gas guzzlers,” especially when compared with the new orders that have newer, more fuel efficient engines.

Ang said the option to acquire the new planes, which was included in the airline’s original deal to buy the first batch of planes, was exercised two weeks ago.

He said the airline was also nearing a deal to acquire an additional 36 long-haul, wide-body planes either from EADS or its American plane-making rival, Boeing Co.

The new planes would likely be used for flights to the Middle East in the absence of an upgrade for the Philippines to “category 1” status with the US Federal Aviation Administration (FAA). The country’s current “category 2” grade prevents local airlines from expanding operations in the United States.

Meantime, San Miguel and the Lucio Tan group are in talks to form a joint venture for plans to build a new international airport that both groups hope would serve as the country’s premiere gateway.

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Short URL: http://business.inquirer.net/?p=84548

Tags: airbus jets , Business , Philippine Airlines

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Window-dressing lifts stocks

By Doris C. Dumlao

Philippine Daily Inquirer

1:12 am | Saturday, September 29th, 2012

Most local stocks surged on Friday on the back of month- and quarter-end window-dressing alongside mostly buoyant regional markets.

The main-share Philippine Stock Exchange index surged 44.61 points or 0.84 percent to close at 5,346.10, nearing all-time highs. The main index was up for the second straight day.

The upswing was led by cyclical counters financial and property sub-indices, which respectively rallied by 1.11 percent and 1.27 percent. Only the mining/oil index was in the red (-2.41 percent) due to concerns over the monetary penalty on Philex and the implementing rules of the mining policy framework, which were deemed unfavorable to the industry.

Value turnover amounted to P6.81 billion. There were 86 advancers, which edged out 72 decliners while 55 stocks were unchanged.

Among the day’s biggest index gainers were URC (+5.94 percent), AGI (+3.23 percent), Globe (+3.21 percent), JG Summit (+2.85 percent), BDO (+1.72 percent), SM Prime (+1.72 percent), BPI (+1.66 percent), RLC (+1.49 percent) and ALI (+1.49 percent).

PLDT, Megaworld, SMIC, DMCI, ICTSI and MWC also contributed gains to the index.

Among non-index stocks, Security Bank (+1.17 percent) also benefited from the day’s upswing.

On the other hand, the day’s index laggers were Metrobank (-0.11 percent) and Ayala Corp. (-0.65 percent).

Overnight, the Dow Jones industrial index rose 0.54 percent to 13,485.97 while regional markets were mostly higher as investors were appeased by news that Spain had released its 2013 budget. Investment bank credit Agricole CIB said the “ambitious Spanish budget is likely to be welcomed by the EC (European Community).”

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Short URL: http://business.inquirer.net/?p=84546

Tags: Business , stocks , window-dressing

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San Miguel lists P80B worth of preferred shares

By Doris C. Dumlao

Philippine Daily Inquirer

1:10 am | Saturday, September 29th, 2012

Diversifying conglomerate San Miguel Corp. listed on the Philippine Stock Exchange Friday P80 billion worth of a new series of preferred shares, the biggest capital market foray in the country to date.

SMC listed 1.07 billion series 2 preferred shares that were recently sold to retail and institutional investors at P75 each. The bulk of the investment comprising 67.6 percent flowed to the sub-series 2A with an annual dividend rate of 7.5 percent and a step-up rate in five years. This was listed under the ticker “SMC2A.”

Another 23.9 percent of the issue consisted of sub-series 2C—listed under ticker “SMC2C”—that carries an annual dividend rate of 8 percent with a step-up provision in 10 years. The remaining 8.5 percent consisted of sub-series 2B under ticker “SMC2B” that carries an annual dividend rate of 7.625 percent and a step-up provision on the 7th year.

SMC said this landmark capital-raising activity was completed as investors were seeking higher yields in a low-interest environment. The listing gave investors the option to buy or sell the preferred shares in the secondary market ahead of SMC’s redemption of the debt paper.

The preferred shares are peso-denominated, perpetual, cumulative, nonparticipating and nonvoting. SMC has the option to redeem the shares starting the 3rd, 5th and 7th year and every dividend payment thereafter or otherwise pay a higher rate (step-up provision).

“Our presence today points to our company’s commitment as an active participant in the capital markets and a value creator for the many investors who hold San Miguel shares or bonds,” SMC president and chief operating officer Ramon Ang said in a statement.

From its stable core food, packaging and beverage businesses, San Miguel embarked on a diversification program in 2007 and has since gained a foothold in high-yielding industries such as energy, fuel and oil, infrastructure, airlines and mining.

“Ever since we embarked on our diversification strategy in 2007, our goal has been to make a deep and lasting positive impact on the Philippine economy through our businesses,” Ang added.

Bulk of the proceeds from the series 2 preferred shares issuance will be used for the redemption of the company’s outstanding series 1 preferred shares with the balance going to general corporate expenses, including short-term debt repayment.

HSBC was the lead issuer for this transaction while the bookrunners included Union Bank, BDO Capital, China Bank, RCBC Capital, First Metro Investment, ING, PCCI, SB Capital, Standard Chartered Bank and UCPB. Participating underwriters were Insular Investment Corp. and PNB Capital and the selling agents were Bank of Commerce and trading participants of the PSE.

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Short URL: http://business.inquirer.net/?p=84542

Tags: Business , capital buildup , preferred shares , San Miguel Corp.

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Daily Video Update: Is gold becoming the new Apple?

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Friday, the 28th of September.

As we come to the end of the week, and more importantly, the end of the quarter we see gold closing near its highest levels ever on a quarterly basis. So it begs the question, is gold going to become the new Apple for investors?

We think so, and with all of our indicators positive on gold, we believe we will see this market continue its upward trend for the next several months. We would not be surprised to see gold break over the $2,000 level before the end of the year.

It looks like the S&P 500 index is going to have its best closing quarter in 19 months. We would not be surprised to see this market move up on the close, as it is the end of the quarter.

Now, let’s analyze the major markets and stocks on the move using MarketClub’s Trade Triangle Technology.

Click Here to view today’s video

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