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Bids for BSP’s term deposits decline

BIDS FOR term deposits dropped on Thursday as the central bank placed a lower volume on offer two weeks ahead of the second round of cuts to banks’ reserve requirement ratio (RRR).

The Bangko Sentral ng Pilipinas (BSP) received P26.962 billion in tenders for its term deposit facility (TDF) yesterday, below the P30 billion on offer. This is also lower than the bids worth P31.614 billion seen last week versus a P40-billion offer following the first round of RRR reductions.

Bids for the six-day papers totalled P10.77 billion, higher than the P10 billion on offer. However, this was less than the P18.895 billion in tenders received last week for the auction of P20-billion worth of seven-day deposits.

Accepted yields ranged between 4.5% and 4.75%, slightly below the 4.5-4.7718% margin seen last week for the one-week deposits. This caused the average rate of the six-day term to slip to 4.6661% yesterday from 4.6669% a week ago.

Meanwhile, total tenders for the 13-day tenor amounted to P7.418 billion yesterday, higher than the P6.665 billion bids received last week but still below the P10 billion the BSP placed on the auction block.

Banks sought yields ranging between 4.5% and 4.9%, wider than the 4.5-4.75% range seen a week ago. The average rate for the tenor declined slightly to 4.6562% on Thursday from last week’s 4.6048%.

On the other hand, the 27-day papers received P6.774 billion in tenders, above the P6.054 billion worth of bids last week but still failing to fill the P10 billion up for grabs.

Yields sought by lenders ranged between 4.6-4.95%, slightly above the 4.595-4.9% margin in the previous week, causing the average rate for the one-month papers to climb to 4.7848% on Thursday from 4.6602% last week.

Some term deposit tenors offered this week were slightly shorter due to Wednesday’s Independence Day holiday.

The TDF stands as the central bank’s primary tool to shore up excess funds in the financial system and to better guide market interest rates.

Last month, the BSP cut benchmark yields by 25 basis points (bp), bringing the interest rate on the central bank’s overnight reverse repurchase facility to 4.5%. The rates on the overnight lending and deposit facilities were also reduced accordingly to 5% and 4%, respectively.

The BSP also reduced the RRR of lenders by a percentage point effective May 31 to 17% for universal and commercial banks, 7% for thrift banks, and 4% for rural and cooperative banks.

The reserve ratios of big banks and thrift lenders will be reduced further to settle at 16% and 6%, respectively, on June 28 and July 29.

BSP Governor Benjamin E. Diokno has said he wants to reduce big banks’ RRR to a single digit rate to put at par with those being implemented in neighboring countries.

BSP Board Member Felipe M. Medalla earlier said banks would rather place their money on other income-generating activities such as loans — hence the decrease in TDF tenders despite extra liquidity due to recent reductions to their reserve ratios.

On Tuesday, Mr. Medalla said further interest rate cuts may not be necessary amid the current inflation trend.

“Inflation is going to be a little bit below 3% this year, a little bit higher than 3% next year. Therefore, there’s really no reason to change policy rates… If you look at the chart of inflation, there’s a 16-month period when inflation was below 2% and was even below 1% at that time,” Mr. Medalla said.

“So if something like that would happen, the economy is going to be very weak. Then you’ll have to make a position — counter that by maybe accelerating the reserve cuts or the policy rates. But right now, as I see it, its a safe bet that there’s no need to make adjustments unless we see new data,” he added. — R.J.N. Ignacio

Davao dialysis centers, hospitals starting to feel impact of nurse shortage

DAVAO CITY — Officials of the Southern Philippines Medical Center (SPMC), the biggest government hospital in Mindanao, said hospitals and hemodialysis (HD) centers in Davao City are facing a “brain drain” of nurses amid the rising number of patients with kidney-related diseases.

Trisha V. Manalaysay, adult nephrologist at SPMC, said while there has been an increasing number of private HD centers offering services, there seems to be not enough nurses on the job market.

“There are many patients they cannot cater to, and many more in need,” Ms. Manalaysay, speaking in Filipino, said at a media forum earlier this week.

“The number is already alarming. In Davao City… not everyone can be accommodated due to lack of manpower and cost,” she added.

Aileen L. Herceda, also an adult nephrologist at SPMC, said the shortage of nurses is due to hiring elsewhere in the country and overseas.

“We have a scarcity of nurses already. We really lack nurses to address the problem of kidney-related diseases,” she said in the same forum.

She said that each hospital and HD center on average perform up to 6,000 weekly dialysis sessions.

Some patients with an extreme kidney-related disease require as many as three sessions a day.

Ms. Herceda said one of the measures being taken is encouraging patients to adopt peritoneal dialysis, which can be done by the patient without assistance from a medical professional.

“Peritoneal dialysis is free as long as the patient has PhilHealth (government health insurance coverage). Peritoneal is also being used for those who don’t have access to HD centers, especially in far-flung areas,”she said.

SPMC Nephrology Section Chairman Franklin Guillano said the Department of Health (DoH) lists kidney disease as among the top 10 causes of mortality in the Philippines.

The SPMC currently provides 24/7 dialysis services and the construction of a five-level kidney center within the hospital complex is ongoing. — Maya M. Padillo

Dorm operator ramps up expansion

SY-LED Philippine Urban Living Solutions, Inc. (PULS) plans to have over 4,800 beds under its portfolio by 2020, as it looks to provide housing solutions to young professionals in the metro.

The operator of urban dormitories carrying the MyTown brand currently operates 14 buildings offering more than 2,800 beds, according to an investor’s presentation by SM Investments Corp. (SMIC) posted on its website this week.

The listed conglomerate owns a 61% stake in PULS, which it described as the pioneer of urban dormitories as communities with amenities.

Earlier this year, PULS launched MyTown Los Angeles, its largest project so far that will offer more than 1,000 beds. The seven-storey building will rise along Kalayaan Avenue in Makati, and is scheduled to be completed by next year.

The company expects MyTown Los Angeles to benefit from the completion of the Bonifacio Global City (BGC)-Ortigas Link Bridge by the end of this year, giving residents better access to Ortigas.

Rates at MyTown range from P4,050 per bed for a six-bed sharing unit, up to P16,100 for a private room every month. Tenants could choose among two-bed, four-bed, and six-bed sharing options. Rooms are fully-fitted and ready for occupancy.

SMIC said MyTown provides a “scalable solution to metro traffic and lack of affordable housing.”

Each building also offers amenities such as fitness gyms, study rooms, roofdeck pools, cinemas, and other recreation areas. All its properties are within walking distance to BGC, and are accessible to other business districts such as Makati and Ortigas, according to its website.

Established in 2012, PULS is one of SMIC’s equity investments in the property space. SMIC also has a 95% stake in Net Buildings, which operates seven commercial buildings inside the only IT park in BGC that is certified by the Philippine Economic Zone Authority. The Net Buildings cover a total gross floor area of 267,763 square meters.

SMIC has a further 34% stake in CityMall Commercial Centers, Inc., with the 66% owned by listed property developer DoubleDragon Properties, Inc. CityMall develops community malls in tier 2 and 3 municipalities in the country where SM Malls are usually not present.

The company has committed to spend about P94-98 billion in capital expenditures this year, mostly for the construction of new malls and residential projects in the country.

SMIC saw its net income attributable to the parent rise 26.2% to P10.7 billion in the first quarter of 2019, after revenues also grew 14.7% to P109 billion.

Shares in SMIC went up 0.52% or P5 to close at P960 each at the stock exchange on Thursday. — Arra B. Francia

Comic book hero

Lapu-Lapu
Directed by Lamberto Avellana
Citizen Jake vimeo site

(Another LVN Film, available on Mike De Leon’s Citizen Jake vimeo website)

LAMBERTO AVELLANA’s Lapu-Lapu (1955) is about as straightforward a biopic as you can get about the famed Mactan warrior, other than the fact that this was adapted from Francisco Coching’s highly romanticized (to put it mildly) komiks (comics) serial.

Have not read the comic, but there are excerpts online, and one passage has been directly translated to the screen: Lapu-Lapu duels with a Chinese warrior over the hand of Princess Miraha, a duel he easily wins; he’s about to kill his opponent (pausing while he considers the gravity of taking a life vs. his lifelong hatred for foreigners) only for one of the warrior’s guards to take the princess at swordpoint, allowing the party (hostage in hand) to flee on their ship.

Here’s where Coching’s exuberant graphic style takes flight, literally: Lapu-Lapu’s men tie five strong bamboo trees together, the chieftain perched at one end; he’s flung hundreds of feet in the air in a high parabola towards the ship, catches a yardarm to halt his flight, swings deckward at the armed and angry sailors below…

And that’s where the excerpt ends (too bad; I’d love to have finished the story — maybe buy the book if available). Avellana’s big screen version (with Lapu-Lapu played by Mario Montenegro) limits himself to more grounded exploits, alas, for budgetary and logistical reasons, though his feats are no less superhuman: he dives into the sea in pursuit of the princess (played by Delia Razon), catches up to and capsizes the Chinese ship, fleeing on a large rowboat, and attacks the commander he had fought earlier. Avellana, shooting the rare underwater sequence in mostly tight shots, suggests the slow-motion poetry of the combatants’ life-or-death struggle through a swirl of bubbles; a cloud of what looks like blood (the film is black and white, of course) concludes the battle.

I’ve talked about the opening to Avellana’s works: this film features what may be his most elaborate: massive miniatures of three Spanish galleons, sailing into a harbor. The image quality isn’t the best, but judging from production photographs this was a spectacle for movie audiences. It’s Magallanes (Oscar Keesee) arriving at the tail end of his quest to establish a western route to the Spice Islands, incidentally circumnavigating the globe. Avellana doesn’t turn the explorer into a larger-than-life monster slavering at the chance to abuse the natives — rather he’s a somewhat sophisticated traveler who asks the Cebuano chiefs for supplies and possible trade in as courtly a manner as possible, or as courtly as his Western European pride will allow. If one comes away from this film with anything, it’s the sense of stiff backs and proud demeanors all around, not just Magallanes’ and his men but Lapu-Lapu’s as well. Probably the most common way strangers meet, but also a tense powder keg of a situation able to detonate with an intemperate spark.

Not sure if this is Coching’s invention or Avellana’s team of writers — composed of Donato Valentin (Avellana under a pseudonym), Jessie Ramos, Avellana’s younger brother Jose Jr. — but arguably the most interesting element added to the story (little is known about the actual figure) is a love affair between the chieftain’s younger sister Princess Yumina (the fresh-faced Priscilla Cellona) and one of Magallanes’ lieutenants, Arturo (Vic Silayan, who played everything from arrogant warrior to sleazy playboy to parish priest [?!] in Avellana’s films). That complicates matters considerably: Lapu-Lapu, in trying to keep his sister under control, comes across as an intolerant killjoy of a father figure, while the soft-spoken Arturo by default earns the status of most broad-minded male around — or as broad-minded as males can possibly be in this narrative (or era); every once in a while the Cebuanos clash among themselves, and the Spaniards (Arturo included) aren’t that much more mature.

It helps (again, I’m not sure if this is Coching’s or Avellana’s idea) that when the explorers talk among themselves they are untranslated and unsubtitled. We gawk and have some idea what’s going on (the actors mime and emote clearly enough) but basically the outsiders remain outsiders — incomprehensible, unintelligible, utterly alien (unless you’re fluent in their language, which presumably 1950s Filipinos were, at least compared to today; mine is sadly inadequate). The only relief from the unrelenting Spanish comes from the translator Enrique, who Oscar Obligacion plays as a simple buffoon, alas. Of course Avellana only knows what he knew then, and presumably the thinking at the time was that Enrique must have been some kind of bootlicking collaborator if he came with the Spaniards. But a translator’s is a delicate difficult role — he bridges two worlds, must faithfully deliver a message from one to another without distortion or self-interest; more, he was possibly an enslaved Filipino and his arrival in Cebu was in effect a homecoming — making him (and not his fellow Spaniards) the first man to ever circumnavigate the globe. Kidlat Tahimik’s long-gestating Memories of Overdevelopment subscribes to this more nuanced view of the man, and one wishes Avellana had the prescience or progressiveness to depict the man differently… well, one can always wish.

Oh, there are moments. When Arturo and Cellona’s eyes lock you don’t need help to understand what’s going on; later, when Arturo is freed by one of Lapu-Lapu’s men while the village burns, the former holds his hand out and flashes his dark Silayan eyes, speaking a few phrases of useless Spanish: the latter understands anyway (“I want to help!”) and reluctantly hands over his sword.

Avellana’s contemporary films celebrate democracy and the equality of men (more or less), but his period films allow him to indulge in a little class worship: thus in Badjao it’s the tribal chief’s son (and not some seafaring nobody) who’s allowed to woo the Datu’s niece; here, Lapu-Lapu pretends to be a mere fisherman when he first meets the princess but when his right to fight for the princess’ hand is questioned, he quickly reveals himself to be a Lakan (hooray for royalty!). Likewise, when Magallanes himself falls, (do we need to post spoiler warnings for an event that happened 500 years ago?) it can’t be by the hand of some common warrior but by the chief of Mactan himself.

Much of the fighting is excitingly choreographed and shot, but more interesting than the swordplay is the process by which Lapu-Lapu approaches war: he sees that the Spaniards are armored, and possess spears spouting fire and iron; he can do little about the latter but with a bit of bribery procures an intact set of armor, and sets about developing blades capable of cutting through the heavy metal. Later (an, I suspect, more effective tactic) he also drills the men on fighting techniques that bypass armor, focusing on thighs, arms, and neck. The man is fearless and possessed of extraordinary strength (Ever tried to capsize a rowboat full of men? It isn’t easy.), but also knows the importance of tactical advantage.

As a film Lapu-Lapu is a bit of a mess. Some of the sets and effects are impressive (the miniature galleons, the datu’s soaring triangle-roofed palace) but the final battle is mostly medium shots of men whacking at each other with blades and spears; you get the sense this was more of a skirmish than an all-out battle for the future of a nation. For the finale on the beach, though, Avellana does resort to low-angle shots, giving the men standing in sand and water a suitably monumental look. Perhaps the film’s single most impressive shot happens two-thirds of the way through, when Lapu-Lapu is forced to foreswear allies reluctant to follow him in his campaign against Magallanes. He loudly demands that they leave; the camera retreats from his wrath and assumes a low-angle — almost supplicating — stance beneath his looming sweat-streaked face.

Avellana consistently coaxes strong performances from his leads, and here Mario Montenegro (despite mestizo features and the brown-skin makeup) gives a fiery performance as the eponymous hero; Delia Razon stands by his side as the equally proud princess. The characters don’t seem complex — they’re legendary figures out of history after all, and one tampers with their myth at one’s peril — but that’s where Silayan’s Arturo and Cellona’s Yumina come in, giving us an alternate pair of lovers, younger and more open to possibilities (Enrique was the perfect opportunity — but I’ve already talked at length about him). Enjoyed the film, but can’t help thinking this was a dress rehearsal for a more streamlined effort, where the depiction of a faraway culture approaches offhand poetry, and the clash between heritage and desire is incarnated in one man. That would be two years later, with what I submit is Avellana’s masterpiece, Badjao.

Far from devalued, euro surges as trade war hits yuan

LONDON — If evidence is needed of how far ripples from the Sino-US trade war are reaching, have a look at Europe where the yuan’s slump is driving up the euro’s value against trade partners’ currencies, handicapping the export-reliant bloc’s economy.

Contrary to US President Donald Trump’s grumbles about a “devalued” euro handing the region’s exporters an unfair advantage over US rivals, the euro has risen to five-month highs versus trading partners’ currencies, an index compiled by the European Central Bank (ECB) shows.

Since Mr. Trump took office in early 2017 the index, which measures the euro’s weighted average against a basket of the bloc’s 19 main trading partners, has risen four percent.

Worsening trade tensions have fueled the appreciation. The euro is up 1.6% since early May and stands two percent below three-and-a-half year highs hit in 2018.

The strength presents another headache for the European Central Bank as it struggles to revive the region’s sluggish economy, highlighting the need to stimulate domestic demand and reduce the bloc’s reliance on exports.

REWEIGHTED BASKET
Shifting trade patterns mean the share of emerging currencies in the trade-weighted euro basket has risen sharply. China’s yuan has around 23%, up from less than 10% in 2003, while the dollar’s share has shrunk to 17% from 22% over the same period.

Policy makers in Frankfurt are concerned.

Sources familiar with ECB discussions told Reuters after its meeting last week that rate-setters were open to cutting benchmark borrowing costs further from 0.40% if euro strength continued to hurt an economy bearing the brunt of the trade war.

“I’ll give you five reasons for a rate cut,” one of the sources said, before repeating “exchange rate” five times.

While the ECB does not formally target an exchange rate, its President Mario Draghi last week noted the euro’s appreciation in his post-meeting news conference.

“For a central bank that is looking at the risk of a slowing economy and with weak inflation, the last thing they need is a stronger exchange rate,” said Jane Foley, an analyst at Rabobank. European policy makers would not welcome Trump “talking down the dollar,” she added.

On some valuation models, such as purchasing power parity, the euro is indeed undervalued, given the dollar has strengthened in recent years, Ms. Foley said.

But she attributed that to the US economy’s outperformance and the Federal Reserve hiking interest rates steadily since late 2015.

“You can’t have it both ways,” she said.

And while Mr. Trump could plausibly carp at the euro’s 4%-plus decline versus the dollar over the past year, the single currency has actually risen around 7% against the greenback since he was sworn in.

THE MAGIC NUMBER
Where the euro goes from here will depend to a large extent on how far Beijing allows the yuan to weaken.

The Chinese currency has fallen heavily since May, nearing the psychologically important 7-per-dollar level after new US tariffs on Chinese goods heightened fears of a sharp economic slowdown.

Beijing might well allow that mark to be breached if trade wars escalate, with central bank chief Yi Gang saying recently he didn’t think any “numerical number” was more important than another.

Meanwhile, the trade-weighted euro is already blunting the competitive edge of the region’s big exporters, including in powerhouse Germany whose sales abroad dropped in April by nearly 4%, the biggest decline since August 2015.

The euro exchange rate shift makes it harder to reverse the economy’s slowdown, but the bloc’s problems go deeper — sluggish domestic demand, political instability in Italy and resistance in Brussels to growth-boosting fiscal expenditure.

It is also unclear that a weaker euro would actually help at a time when slower world growth is hurting consumer demand for goods and services.

Konstantinos Venetis, senior economist at TS Lombard, said exchange rates were a lesser issue than some years ago when “currency wars” saw countries actively try to influence exchange rates to get an edge over rival nations.

“What you really need is to see global demand picking up. If that happens, euro even at $1.20 won’t be so painful,” Mr. Venetis said.

“Currency depreciation can be a way to help your exports only if the world is growing briskly and demand is healthy.” — Reuters

Amazon Web Services to offer second year of cloud skills training for schools

AMAZON Web Services (AWS), a unit of Amazon.com, said it has started to offer a second year of cloud technology training sessions for higher educational institutions, expanding beyond Metro Manila to include participants in other parts of Luzon as well as Cebu and Davao.

The event is called Siklab Pilipinas 2019, a series of sessions running from May to December, with the kickoff sessions beginning recently in Metro Manila.

“At the inaugural AWS Siklab Pilipinas event in Manila last year, we saw enthusiastic participation from hundreds of students, educators and customers,” AWS said in a statement, quoting Vincent Quah, the company’s Asia-Pacifc head for Education, Research and Not-for-Profits. “Since then, ore education institutions have asked us to brng (the event) back to the Philippines, to continue with out cloud skilling program.”

AWS cited World Economic Forum data which found that 72% of companies in the Philippines are expected to adopt cloud computing technologies, with 84% signalling their intent to hire new permanent staff to address the need for skills “relevant to new technologies.”

AWS said it is partnering with Edukasyon.ph, an online social enterprise connecting students with education opportunities.

Participants completing their training will be invited to job fairs run by AWS customers Globe Telecom, Inc., Cebu Pacific Air, and the Aboitiz group for possible employment or internship opportunities.

The next leg is scheduled for Cebu City on July 16-18.

Harbor Star inks deal with Malaysian company

A SUBSIDIARY of listed firm Harbor Star Shipping Services, Inc. said it signed a deal with a Malaysian wholesaler to provide it with harbor tug services.

In a disclosure to the stock exchange Thursday, the tugboat and cargo vessel firm said its subsidiary in Malaysia, Peak Flag Sdn Bhd, was tapped by Westports Malaysia Sdn Bhd to provide its services in Port Klang.

“Peak Flag will provide a 60-ton bollard pull tug for a period of three years with an option for extension for another two years. Peak Flag is expected to commence the harbor tug services to Westports Malaysia on the 3rd week of June 2019,” it said.

Port Klang is Malaysia’s main sea gateway, where Harbor Star said Westports Malaysia is the biggest terminal operator handling 75% of the port’s throughput. It noted in the first quarter, Westports Malaysia handled a total of 2.53 million twenty-foot equivalent units (TEUs) and 2.36 million metric tons of conventional cargo from the port.

Harbor Star posted an attributable loss of P84.6 million in the January to March period, a turnaround from its attributable profit of P27.3 million in the same period last year, due to a 12% drop in service income.

It earlier said its plan was to sign more exclusive service contracts with companies to help it ensure recurring revenue.

Harbor Star signed such deals with Mariveles Grains Corp. (MGC), GNPower Kauswagan Ltd. Co. and Chevron Philippines, Inc. to offer its range of services to the companies. — Denise A. Valdez

1960s singer says he has Alzheimer’s

THE 1960s-era singer and comedian Steve Lawrence, seen here with his wife and performing partner Edyie Gorme in 2000, said on Tuesday he has been diagnosed with Alzheimer’s disease. In a letter released by his publicist, the 83-year-old Lawrence said the disease was in its early stages and he was “being treated with medications under the supervision of some of the finest doctors in the field,” adding “Fortunately, they have managed to slow down this horrific process.” Lawrence married Gorme in 1957 and together they became a staple on American late-night and variety television programs. Their playful husband-and-wife banter was a distinctive element of their performances over the decades. We Got Us, the first album from the duo that came to be known as Steve & Eydie, won a Grammy in 1960. Gorme died in 2013. Lawrence said he was “living my life, going out in public and trying to spend as much time as possible with my family and friends while I am still able to engage and enjoy.” He added: “I ask for your prayers, your good wishes and implore you to find the joy every day, because what I feel is gratitude, love and hope — nothing more and nothing less, and I hope you can find the same.” — Reuters

Regulated Bitcoin futures markets boom as investors seek a safer ride

LONDON — When Bitcoin was born it was a symbol of counterculture, a rebel currency with near-anonymity and a lack of regulation. A decade later, there are growing signs it’s entering the establishment its creators sought to subvert.

As the cryptocurrency has surged in value, bigger investors, from trading firms to hedge funds, have increasingly turned to exchanges regulated in traditional financial centers. They are buying Bitcoin futures to gain exposure to the asset while avoiding the hacks and heists that plague the industry.

The crypto market, associated by many with the dark web, money laundering and the Wild West, is beginning to be discussed by financiers in the same breath as derivatives, hedging instruments and compliance.

Investors plowed record levels of money into Bitcoin futures at regulated exchanges in the United States and Britain last month, hungry for a piece of the action but seeking the kind of protection that will satisfy their compliance officers.

Between March and May, Bitcoin more than doubled in price, an ascent peppered by double-digit price swings reminiscent of its 2017 bubble, which was driven by smaller retail investors.

During that period, Chicago-based CME Group Inc.’s average daily volumes of futures contracts climbed over seven-fold to a record $508 million in May. The number of open interest contracts — those that haven’t been settled — also hit a record.

CME said Bitcoin’s price gains, and the subsequent increase in volatility, attracted new investors seeking to hedge risk.

Crypto Facilities, a London-registered platform bought this year for over $100 million by major US cryptocurrency exchange Kraken, said Bitcoin futures daily trading volumes jumped over three-fold from March to a record $84 million in May.

In a sign of the growing mainstream market, the owner of the New York Stock Exchange, Intercontinental Exchange Inc (ICE), plans to offer Bitcoin futures in the coming months through a new crypto-trading platform, Bakkt.

“It’s logical they (institutional investors) would want to be moving in this direction, especially considering their size and how much more there is at stake,” said Joel Kruger, currency strategist at LMAX Exchange Group.

HEDGING INSTRUMENT
Futures — financial contracts that lock buyers and sellers into trading an asset at a set date and price — are seen as key components of any mature market, as they boost market liquidity and allow investors to bet on the direction of prices.

“It’s a useful hedging instrument,” said Daniel Matuszewski, head of trading at Goldman Sachs-backed crypto firm Circle. “Futures are much easier to trade, much easier to use for hedging, much easier to get leverage on.”

Playing out in the spiking demand is the emergence of a twin-track global Bitcoin futures market — on “onshore” exchanges like CME and “offshore” exchanges, which are more lightly regulated and still command the bulk of the multi-billion-dollar daily market.

Onshore exchanges — those regulated in established financial centers — are usually subject to strict checks on governance, technology and client vetting. They demand a high degree of transparency.

Offshore platforms, in contrast, are typically registered in jurisdictions with less onerous rules. They tend to accept business from investors who can sign up with few checks on their identity or the provenance of their funds.

Larger investors, bound by strict compliance rules, are heading to regulated platforms in financial hubs like CME, according to industry players. Traders with more tolerance for risk — including retail investors from north Asia and companies earning money in cryptocurrency, from miners to gaming firms — use of offshore exchanges.

“Offshore exchanges aren’t really exchanges — they are more like private markets,” said Vladimir Jelisavcic of trading firm Cherokee Acquisition in New York.

‘STARS HAVE ALIGNED’
Offshore exchanges have offered Bitcoin futures since as early as 2011. One of the biggest, Seychelles-registered BitMEX, said it now accounts for over 65% of global cryptocurrency derivatives trading. Trading volumes were $4.3 billion in May, it said.

BitMEX CEO Arthur Hayes said, however, that larger investors were being increasingly drawn to onshore exchanges like CME.

“It’s the perfect product (for bigger investors) — it’s US-dollar based, they never have to touch actual Bitcoin, it’s financially settled,” he said.

The launch by CME and rival Cboe Global Markets in December 2017 marked the first time mainstream exchanges offered cryptocurrency derivatives.

They initially faced tepid demand. Cboe said in March, when Bitcoin languished below $4,000, that it planned to discontinue its futures, with the final contracts expiring this month.

For their part, CME’s futures have typically seen thin liquidity and high barriers to entry for smaller investors, said Ricky Li of crypto trader Altonomy in New York.

The growing gap in the market for futures from onshore exchanges is stimulating growing competition and attracting new entrants, such as ICE.

Sui Chung, head of cryptocurrency pricing products at Crypto Facilities, said compliance-wary institutional investors had been assessing the various futures products offered by regulated exchanges for some time, as they awaited a spike in prices to allow them to enter the market.

“This is the first time those stars have aligned,” he said. — Reuters

Reckitt picks PepsiCo executive as CEO, going outside for first time

CONSUMER GOODS group Reckitt Benckiser has picked PepsiCo executive Laxman Narasimhan as its next chief executive, becoming the latest industry heavyweight to turn to a company outsider to tackle faltering growth and new media-savvy rivals.

Narasimhan, PepsiCo’s global chief commercial officer, is the first external candidate to be appointed as CEO at Reckitt since the maker of Durex condoms, Nurofen tablets and Dettol cleaners was formed in 1999.

The 52-year-old takes over as CEO on Sept. 1, replacing Rakesh Kapoor, 60, who has led Reckitt for more than eight years and said in January he would retire this year.

Analysts welcomed the appointment, saying the new CEO would inject a fresh perspective to a company facing industrywide challenges to growth, though some said it raised doubts about the fate of Reckitt’s restructuring plan.

The appointment is the latest in a series of external hirings as major consumer goods groups look to make up ground lost to smaller brands that have done a better job selling online and connecting with millennials on social media, while also facing investor pressure to boost efficiency.

Analysts had tipped Reckitt’s health division operations chief Aditya Sehgal and hygiene home president Rob de Groot as potential internal successors to Kapoor.

In the end, Narasimhan’s experience running large scale consumer businesses in developed and emerging markets helped him beat out 60 candidates reviewed for the job, Reckitt Benckiser Chairman Chris Sinclair told Reuters.

“He has got great perspective, but first and foremost we saw him as a consumerist and a consumer marketer and that’s what set him apart,” Sinclair said.

At PepsiCo, the chief commercial officer position held by Narasimhan will now be filled by the company’s Greater China CEO Ram Krishnan, the US drinks maker said.

As well as industry challenges, Reckitt has faced company-specific setbacks in recent years, including a safety scandal in South Korea, a failed product launch and a cyber attack.

Kapoor launched a restructuring plan, dubbed RB 2.0, to split the group into two business units — one for health and one for hygiene and home products — under the same parent company.

Reckitt said on Wednesday Narasimhan would be charged with delivering the plan, due to be completed in 2020, but some analysts suggested he might have other ideas.

“The appointment of a new, external CEO is bound to raise questions regarding the timing of the end of the group’s RB 2.0 plan and whether it will ultimately lead to a split of the company,” Liberum analyst Robert Waldschmidt said.

Sinclair, however, said Reckitt was on track to complete the 2.0 program by mid or late 2020 and that Narasimhan agreed with the plan.

‘FRESH PERSPECTIVE’
Jefferies analyst Martin Deboo questioned why a company already smaller than rivals Procter & Gamble and Unilever wanted to “descale itself,” which could hobble its ability to compete in emerging markets.

Reckitt shares were up 1.6% in afternoon trading on the London Stock Exchange.

At least three analysts welcomed Narasimhan’s appointment.

“Narasimhan’s strategic and leadership background make him a strong fit for Reckitt. We believe he will bring a fresh perspective to both the business and to investors,” Morgan Stanley analyst Richard Taylor wrote in a note.

Narasimhan led Strategy, Global Category Groups and Global R&D in his capacity as Chief Commercial Officer at PepsiCo.

Prior to that, he headed the beverage maker’s Latin America, Europe and Sub-Saharan Africa operations, managing annual sales of 14.5 billion pounds ($18.5 billion) — more than the total annual sales of Reckitt Benckiser. At one time he was also chief financial officer of the group’s Americas Foods business.

Narasimhan studied mechanical engineering in India before moving to the United States for an MBA degree. Before joining PepsiCo, he worked at consultants McKinsey for two decades, where he advised on large consumer and health care deals. — Reuters

SMC to build food bank in Tondo

SAN MIGUEL Corp. (SMC) is building a food bank and community center in Tondo, Manila as part of efforts to ramp up its sustainability programs.

The diversified conglomerate said in a statement that the 1,000-square meter facility called Better World Community will be located in Barangay 101 in Tondo, across relocation sites Aromaland and Happyland. The facility will stand on what used to be a beer warehouse and distribution center for the company.

“This is just the first. By building more sustainable communities in the country we hope to empower those in reduced circumstances to be able to transform their lives,” SMC President and Chief Operating Officer Ramon S. Ang said in a statement.

The facility will serve as a food bank, soup kitchen, and livelihood training center for low-income families. SMC has partnered with the local chapter of international organization Rise Against Hunger for its operations.

“The target is to feed more than 5,000 people every day. Rise Against Hunger will help in recovering surplus food from San Miguel Food and Beverage, Inc. (SMFB), its food service arm Great Food Solutions, as well as the Manila Diamond Hotel and Makati Diamond Residences,” Mr. Ang said.

Aside from the food bank, SMC will also be providing after-school learning to children in the community with partner A-HA! Learning Center. It will also tap other organizations to set up livelihood training and other capacity-building programs.

The conglomerate earlier said it will spend P1 billion to clean up the Tullahan River, whose water flows to Manila Bay.

SMC has also committed to cut its group-wide water use by 50% by 2025. In 2018, the company already recorded a 25% reduction in its water use, equivalent to about 8.8 billion liters of water. — Arra B. Francia

Your Weekend Guide (June 14, 2019)

Beautiful the musical

KAYLA RIVERA plays the lead in Beautiful: The Carole King Musical.

BASED on the true story of Carole King’s remarkable journey from teenage songwriter to rock ‘n’ roll legend, Beautiful features classics such as “You’ve Got a Friend,” “One Fine Day,” “So Far Away,” “Will You Still Love Me Tomorrow,” and “Natural Woman.” Beautiful: The Carole King Musical, a production of Atlantis Twenty, will run until July 7 at the Meralco Theater, Pasig City. It stars Kayla Rivera and Nick Varricchio, and is directed by Bobby Garcia. Tickets are available at TicketWorld (891-9999, www.ticketworld.com.ph).

Swan Lake

THE Moscow Ballet’s classical choreography arm La Classique will perform the ballet classic Swan Lake, at the New Frontier Theater from June 14 to 22. Sharing the stage with the Moscow Ballet company are two Bolshoi Ballet principal dancers, Nina Kaptsova and Alexander Volchkov. The production of Swan Lake will be accompanied by the Russian Symphony Orchestra, under the baton of conductor Yaroslav Tkalenko. Tickets are available at all TicketNet (www.ticketnet.com.ph, 911-5555) and TicketWorld (www.ticketworld.com.ph, 891-9999) outlets.

Father’s Day at Shangri-La Plaza

SHANGRI-LA Plaza mall features the up and coming Male Ensemble Nine (MEN) in HANDOG: Father’s Day Tribute Concert 2019 on June 16, 7 p.m., at the mall’s Grand Atrium. The all-male group’s repertoire ranges from all-time favorites and classic OSTs, to OPM hits.

24th French Film Festival

ONGOING is the 24th French Film Festival whose slate of 15 films “explore the depths of human relationships and the importance of family.” The festival run until June 18 at the Bonifacio High Street Cinemas and Greenbelt 3 Cinemas. The festival will then move to the Ayala Center Cebu, June 20 to 22; the Abreeza Mall, Davao, June 28 to 30; and Ayala Capitol Central Mall, Bacolod City, July 10 to 12. Tickets are P150 per screening and can be purchased through the box office or via sureseats.com. For details on the film-line-up, synopses, trailers, and screening schedule, visit www.ph.ambafrance.org or www.facebook.com/FrenchEmbassyManila.

We Bare Bears tour

THE We Bare Bears bros — Grizz, Pan-Pan, and Ice Bear — have been in the country to give hugs and spread PAW-sitivity over the past few weeks. On June 16, they will be at the Glorietta Activity Center for a day filled with activities, prizes and, lots of selfie opportunities. For updates visit HugsTour.CartoonNetworkAsia.com/event/Philippines.

Malaya Music Festival

CELEBRATE Philippine independence by rocking out with some of local music’s hottest acts at the Malaya Music Festival at the Garden in Okada Manila on June 15. Performing are OPM icons Ebe Dancel, Urbandub, and Mayonnaise, as well as Johnoy Danao, Bullet Dumas, Gracenote, and December Avenue. Doors to the Malaya Music Festival open at 4 p.m. Food stalls and mobile bars are available at the event. Tickets are P1,000 each and include a free San Miguel Beer and access to the indoor beach club and nightclub Cove Manila. Tickets are available at okdmnl.ph/Malaya2019. For more information on tickets and upcoming events, visit okadamanila.com.

PHL Fashion Week Holiday

CROWNE PLAZA Manila Galleria will be hosting Philippine Fashion Week’s 2019 Holiday collection show on June 15 and 16 at the hotel’s Grand Ballroom. The two-day event kicks off the fashion event’s three-year partnership with the hotel as its official venue for its series of shows from 2019 to 2021. There will be four shows each day, at 2, 4, 6, and 8 p.m. June 15, 6 p.m., will see the Crowne Plaza Manila Galleria Bridal Fashion Show. The show is in conjunction with the “She Said Yes! Bridal Fair” on June 15. For inquiries, call 633-7222 or e-mail cpgm.resevations@ihg.com.

Mark Siwat in Manila

ONE of Thailand’s fastest rising young actors, Mark Siwat, revisits the Philippines for his first solo fan meeting on June 16, 3 p.m., at Shaw Zentrum, Shaw Boulevard, Mandaluyong City. He has starred in I Am Your King: The Series, and performed in Love by Chance. Tickets are available at www.facebook.com/wishusluckteam.

Ticket range in price from P3,500 (with a group photo, a handshake with gift giving, and game participation raffle) to P7,500 (which includes a meet and greet, signed Polaroid shot, a selfie, poster signing, a handshake with gift giving, send-off, and game participation raffle). My Turn: Mark Siwat 1st Live and Meet in Manila 2019 is presented by Wish Us Luck (Philippines) in partnership with 2gether House (Thailand).

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