Wednesday, August 15, 2012

Philippine Market Update for August 14: Peso Strengthens

The PSEi traded within a narrow band and on very thin volumes of Php3.88 billion as investors remained on the sidelines pending stronger market-making news domestically and abroad. The local bourse drifted down 5.84 points, or -0.11%, ending the day flat for the third day in a row at 5,265.94.

Sectoral indices closed mixed with holding firms (+0.14%), financials (+0.14%), and mining & oil (+0.05%) closing positively and property (-0.44%), services (-0.32%), and industrials (-0.20%) closing in the red. Top index gainers include MWC (+2.48%), FGEN (+2.21%) and MEG (+1.77%), while AGI (-1.62%), JFC (-1.50%), and ALI (-1.50%) were the day’s laggards. Market breadth was also mixed with 83 declines against 70 advances and 43 stocks unchanged.

SM Investments Corp. saw its net profit for the first semester climb by 13% year-on-year to Php10.9 billion on the back of higher gains from its banking, retailing, shopping mall and residential property businesses.

The company’s total revenues rose by 14% from the same period last year, to Php105.2 billion as all its core businesses reached their sales targets. Cash flow as measured by earnings before interest, taxes, depreciation and amortization (EBITDA) grew 12% year-on-year to Php24.1 billion for an EBITDA margin of 22.8% while return on equity was steady at 14%.

Atlas Consolidated Mining and Development Corp. reported that its consolidated net income for the first semester fell by 20.61% to Php1.61 billion against Php2.028 billion it posted from a year-ago level.

This is partly due to a decline in earnings from its operations in Cebu. Carmen Copper., wholly-owned subsidiary of Atlas, saw its core net income for the first semester decline by 20.42% to Php1.66 billion from Php2.09 billion from the same period last year. However, the company said that its subsidiary’s revenues rose by 13% to nearly Php7 billion due to better production which offset lower copper prices realized in the period.

The Bureau of the Treasury sold Php9 billion worth of bonds due in 25 years. Government received Php26.26 billion total bids, allowing the Bureau of Treasury to sell all the debt on offer. The coupon rate for 25-year bond is 5.75% while bids ranged from 5.610% to 5.800%.

The Philippine peso strengthened today as traders snapped up the local currency following its 2-day decline. The local currency gained 1.5 centavos, or 0.04%, to close at 41.915.