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Nissan employees paint Habitat for Humanity community homes in Tanza, Navotas

IN ITS COMMITMENT to enriching people’s lives, employees of Nissan Philippines participated in an outreach activity in partnership with Habitat for Humanity Philippines.

For the past seven years, Nissan has helped more than 3,300 families through the partnership, with Nissan Philippines employees, contributing more than 316 volunteer hours. The latest in a seven-year partnership involved helping the local residents by painting the houses of Habitat for Humanity’s partner-community in Tanza, Navotas.

Forty employees, led by Nissan Philippines’ President and Managing Director Atsushi Najima, volunteered to complete the painting of a total of five houses.

“Our volunteer work with Habitat for Humanity Philippines is an extension of our company’s vision by moving people to a safe, sustainable, and inclusive world. We aim to enrich the lives of Filipino people as a natural part of our operations, and through community service,” Mr. Najima said.

Nissan’s partnership with Habitat for Humanity started in 2012 with the disaster response and shelter repairs in the wake of Typhoon Pablo (International code: Bopha). The partnership continued to include projects such as employee volunteer programs, disaster risk reduction and mitigation projects, and youth leadership training. Nissan also donated a total of four vehicles — Nissan X-Trail, Nissan Urvan, and two Nissan Navara — as part of the disaster response objectives.

Vista Land Q3 profit jumps 13%

VISTA LAND & Lifescapes, Inc. expanded its earnings by 13% in the third quarter, as its real estate sales continued to grow.

The Villar-led property developer posted a P3.16-billion attributable net income in the July to September period, from P2.87 billion a year ago.

Consolidated revenues climbed 7% to P10.96 billion as expenses rose 12% to P6.98 billion during the same three months.

Broken down, real estate sales went up 3% to P8.19 billion, while rental income slipped 4% to P1.59 billion. Interest income surged 92% to P663 million. Miscellaneous income, which refers to “forfeited reservation fees and partial payments from customers whose sales contracts are cancelled before completion of required down payment,” soared 60% to P529 million

Year to date, the company’s attributable net income stood at P8.83 billion, up 12% from last year.

This was driven by a 9% growth in consolidated revenues to P34.36 billion. Leasing revenues increased 13% to P5.8 billion during the nine-month period. Reservation sales also grew 8% to P61.6 billion, coming mostly from overseas Filipino workers.

Expenses in the nine months jumped 12% to P21.13 billion.

“We are well-poised to achieve another record year this 2019 as Vista Land continues to deliver solid performance both from our leasing and residential businesses,” Vista Land Chairman Manuel B. Villar, Jr. said in a statement over the weekend.

“As what we have said in the past two quarters, we remain bullish for the industry, given the sustained demand for our housing products as well as our success in our leasing business propelled by the steady growth in the disposable income, Overseas Filipino remittances, sound Philippine macroeconomic fundamentals and the government’s drive to accelerate economic activities and infrastructure developments outside Metro Manila, where we have a competitive advantage given that we have the widest geographic reach around the country,” he added.

Vista Land President and Chief Executive Officer Manuel Paolo A. Villar also noted the company is motivated by the strong growth of its existing investment properties of more than 1.4 million square meters.

“We remain confident about the company’s prospects for the rest of the year as our leasing portfolio will be growing which complements our existing core and stable end-user housing business,” he was quoted as saying. — Denise A. Valdez

China’s sneakerheads chase 6,600% returns flipping Air Jordans

ONE OF THE hottest commodities in China right now is a pair of sneakers.

The SoleFly x Air Jordan 1 in black patent leather rocketed in value by 6,600% to a high of 75,999 yuan ($10,730) on the online marketplace Nice after its release in December. Only 223 pairs of Nike Inc.’s retro high-top were made for sale, according to online magazine Sneaker Files.

The model is among the most profitable sneakers traded on the exchange created by Beijing-based Nice App Mobile Technology Co. Such outsize returns are hard to come by, but they’ve nonetheless caught the attention of sneakerheads like Lei Xiaoming, 20, a mechanical engineering student in Huangshi.

Lei has collected limited-edition shoes for years but only started investing in them in April.

“Prices were surging so much I thought it would be a better choice to sell them rather than wear them,” he said. “It’s more exciting than trading stocks.”

Since then, he’s spent about 200,000 yuan buying more than 200 pairs — mostly Air Jordans and Adidas AG’s Yeezy line, a collaboration with rapper Kanye West. He’s earned profits of about 100,000 yuan by reselling some, he said.

Across China, more than 10 million monthly active users frequent online-resale apps, such as Poizon, Nice, and DoNew, according to Chinese data-mining company QuestMobile. While many products suffer from the effects of the trade war, pairs of collectible sneakers are flying off the shelves, and that’s attracting the attention of US sneaker exchanges StockX and GOAT — as well as China’s central bank and state media.

‘CHINA WILL SOON BECOME THE SNEAKER CAPITAL OF THE WORLD’
Most of what’s traded on these platforms are basketball sneakers — a testament to China’s love of the sport, even as the NBA faces backlash for a Houston Rockets executive’s tweet appearing to support Hong Kong’s protests.

The buzz over shoe reselling made a unicorn out of Poizon, developed by Shanghai Shizhuang Information Technology Co. In April, funding from Digital Sky Technologies vaulted its valuation to $1 billion, according to CB Insights.

China’s sneaker-resale market exceeds $1 billion in value, said Scott Cutler, chief executive officer of Detroit-based sneaker exchange SoleTrade LLC, known as StockX.

Chinese investors long have speculated in alternative assets, including cryptocurrencies, fiery liquor from Kweichow Moutai Co., and garlic.

Now, sneakers have their attention. Unlike Chinese stocks, which only can move 10% in either direction, there’s no cap on shoe returns.

“As with all frothy assets, there’s no telling where the peak is,” said Yu Yingbo, investment director at Shenzhen Qianhai United Fortune Fund Management Co. “As long as there are high returns, there is going to be money chasing them.”

Sneaker collecting went mainstream in the US after Nike launched Air Jordans in the 1980s, and the trade went digital with eBay Inc. about a decade later.

Today’s technology makes the trade more sophisticated. Apps collect bid and ask prices, chart costs and volume in real time, and allow users to share investment advice. Some also let customers buy coupons that can be traded for shoes before coveted models arrive — in effect selling sneaker futures.

Now more-established trading sites in the US want a piece of the action in China.

StockX plans to introduce local payment and language support this year, said Cutler, previously the head of global listings at the New York Stock Exchange. China already comprises about 10% of StockX’s transaction volume.

Culver City, California-based 1661 Inc.’s GOAT launched a mini-app on WeChat in July after receiving $100 million in funding from Foot Locker Inc.

“China will soon become the sneaker capital of the world,” said Henek Lo, general manager of GOAT China. The demand from Chinese millennials is “something we haven’t seen anywhere else.”

Significant rewards typically are accompanied by significant risks, and sneaker trading is no different. Of more than 2,600 collectible models sold on Nice, 56% lost value, according to company data. Only 0.4% of footwear saw returns of more than 1,000% on the app.

But Tian Hao, 27, is convinced he’s cracked the code. These days, his 90-square-meter Beijing apartment mostly serves as storage space for his inventory, which he estimates to be worth hundreds of thousands of dollars.

There’s hardly any space to walk around in his living room, where hundreds of shoeboxes are stacked up on the sofa, TV console and coffee table.

As Tian runs low on space, he’s stashing sneakers with a friend. In return, Tian helped him invest 260,000 yuan in sneakers. After splitting the profits, they each cleared 90,000 yuan in two months.

“This is one of my luckiest investments this year,” Tian said. “My friend can’t stop admiring me.”

Operating in a country known for its copycats, Poizon and Nice say they have strict processes to ensure they’re selling authentic products. Poizon hires “hardcore master-level sneakerheads” to inspect every shoe, including packaging, labels, stitching, and glue, and it issues certificates to verified products.

“There are so many details — the material, the label, the box, etc. — it’s extremely hard for knock-offs to get it exactly right,” Nice CEO Alex Zhou said.

GOVERNMENT ATTENTION
Both Poizon and Nice offer guarantees against fakes, promising to compensate buyers at triple the value of their fraudulent purchases.

Lately, though, the Chinese apps are concerned about deflecting the government’s attention. It may be too late. An article published in June on state-run China Daily mentioned Poizon and StockX, calling out sneaker resellers for the “chaos” in surging prices.

And last month, the Shanghai branch of the People’s Bank of China warned the city’s financial institutions about the risks associated with sneaker speculation, according to people familiar with the matter. It said the resale platforms are a “financial game of hot potato.”

Adidas discourages the reselling of its sneakers, the company said. Nike did not respond to a request for comment.

Poizon has since spoken out against flipping shoes and in August stopped offering storage space that enabled traders to avoid taking deliveries.

“Shoes are for wearing, not for speculation,” said Charles Xing, the head of marketing.

Poizon CEO Yang Bing declined an interview request.

Nice also cautioned against the practice in a Sept. 27 WeChat post.

“Don’t embark on the unreturnable path of speculation for the greed of short-term profit,” Zhou said. “It’s going to harm others as well as yourself.”

The app suspended price charts, a leaderboard for price performance and discussions about investments.

Still, that’s not deterring resellers like Tian, who said he expects to continue trading for the next three to five years.

“The ‘chives’ who rush into this market may leave,” he said, using a nickname for bandwagon investors. “The sneaker lovers and collectors will be enough to nurture this resale industry.” — Bloomberg

T-bonds may fetch lower rates

THE RATES on reissued 10-year Treasury bonds (T-bond) on offer on Tuesday will likely decline amid easing inflation and as the market waits for updates on the US-China trade war.

The government is looking to raise P20 billion worth of reissued 10-year via the reissued T-bonds with a remaining life of nine years and two months and a coupon rate of 6.875%.

The yields on the securities are expected to fall within the 4.5-4.6% range, according to Michael L. Ricafort, economist at Rizal Commercial Banking Corp. (RCBC).

During the Aug. 13 auction, the Treasury borrowed P20 billion as planned via the 10-year papers as the offer attracted P65.2 billion in total bids. The papers fetched an average rate of 4.196%, 145 basis points (bp) lower than 5.644% quoted during the auction on May 28.

At the secondary market on Friday, the ten-year notes were quoted at 4.674% based on the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System’s website.

“Market participants are closely watching any developments regarding the US-China trade spat and the possibility that domestic inflation could tiptoe higher in the coming months,” Robinsons Bank Corp. peso debt trader Kevin S. Palma said in a phone message over the weekend.

Last week, the Philippine Statistics Authority reported headline inflation slowed further to 0.8% in October from September’s print of 0.9% and the 6.7% a year ago. The PSA attributed this decline, which was the slowest in nearly three-and-a-half years, to the lower prices on heavily weighted food and non-alcoholic beverages, transportation and utilities.

Overseas, US President Donald Trump said over the weekend that negotiations on its trade dispute with China are moving “very nicely” but was firm on saying that it has to be a “great deal”.

Mr. Trump assured that China is also keen on closing in on a deal to put a stop to the prolonged war.

As part of the first phase of their deal, the two big economies had agreed to roll back tariffs that they imposed earlier.

Back home, Mr. Ricafort said the “major catalyst” for the auction will be the central bank’s move to reduce banks’ reserve requirement ratio (RRR) further which provided additional liquidity to the system.

“The RRR cuts for the first reserve week of November 2019 amounted to P125 billion, as additional supply of peso funds/liquidity into the financial system that could temper any upside on the auction yield,” he said in a phone message over the weekend.

The 100-bp cut announced in September took effect this month, bringing the reserve requirement ratios of universal and commercial banks to 15%, thrift banks to five percent, while that for rural banks now stands at three percent.

In October, the Bangko Sentral ng Pilipinas (BSP) announced another 100-bp reduction in the reserve ratios of universal, commercial and thrift banks by December, taking the overall reductions to their RRR to 400 bps for this year.

This cut will also apply to the reserve ratio of non-bank financial institutions with quasi-banking functions (NBQBs) to bring their RRR to 14% next month.

Meanwhile, the reserve ratio of universal and commercial lenders to 14% by December, while the RRR of thrift banks will stand at four percent.

Mr. Ricafort added that the recent appreciation of peso versus the greenback “would tend to support relatively lower local yield benchmarks as a stronger peso supports lower import prices and lower overall inflation.”

The government is planning to borrow P220 billion from the domestic market this quarter broken down into P100 billion in Treasury bills and P120 billion via T-bonds. It is looking to raise P1.189 trillion this year from local and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — B.M. Laforga with Reuters

Heavy rains slow European Union winter crop sowings, disrupt maize harvest

LONDON — Heavy rains have delayed grain sowings in parts of the European Union with the situation particularly severe in Britain where they could trigger a significant shift to spring planted crops.

The rains have also disrupted the harvesting of maize and sugar beet, adding to the challenge faced by farmers who are trying to get winter crops planted.

“Overall it is estimated that wheat plantings are just about 40-50% complete in the UK. We still have a bit of time but the weather forecast is far from ideal,” said Ben Bodart, Director at CRM AgriCommodities.

Bodart noted the last time that Britain had significant planting issues was for the 2013/14 campaign when the final wheat area fell by nearly 19%.

UK wheat futures on ICE have been rising sharply for 2020/21 crop positions with the Nov. 2020 contract climbing to a peak of 160.00 pounds a ton on Thursday, up 10% from a month earlier.

“Some farmers are already considering rolling their 2019 harvest over to sell it next season,” Bodart said.

In France, winter barley is most at risk of losing area because of its earlier planting period compared with wheat.

However, the main threat from rain was to the ongoing maize harvest, with potential for disease in late-gathered crop, analysts and traders said.

“The rain has hampered winter barley sowing quite a bit in France and the UK, and there will be some sowing intentions that won’t be fulfilled,” Benoit Fayaud of crop analysts Strategie Grains said.

“It’s also slowing soft wheat sowing but there’s a longer window than for winter barley.”

French farmers had sown 67% of the expected soft wheat area as of Nov. 4, with sowing now eight days behind the average of the past five years, according to farming agency FranceAgriMer. Winter barley sowing was 81% complete and also eight days behind the five-year average.

German winter grains sowings have also been delayed.

“It is the winter grain sowings on the harvested maize and sugar fields which are being delayed, earlier sowings went very well,” one German grains analyst said.

“Currently it is not a very serious problem but it is making estimates of the winter wheat planted area for next summer’s crop difficult as we do not know if some farmers will be compelled to move to planting more spring grains.”

Poland also had a rainy autumn, but with enough sunny days allowing farmers to sow winter crops, said Wojtek Sabaranski of analysts Sparks Polska.

“Polish farmers have generally managed to plant winter crops in a timely manner,” Sabaranski said. “Warm weather helped establish winter crops already sown and enabled maize harvesting to run at a pretty good pace.” — Reuters

Porsche introduces new Taycan sports sedan in Barcelona

By Manny N. de los Reyes

FUTURISTIC VISIONS of supercars zooming along highways without consuming a drop of fossil-based fuel is happening — right now. This future is today as Porsche introduces its latest model lineup — the fully electric Porsche Taycan — to its global dealer network during an event held recently in Barcelona, Spain. And because a Porsche event is never complete without including the firsthand experience of driving, guests were able to put the Taycan through its paces on the iconic racetrack of Catalunya — the home circuit of the Spanish Grand Prix.

The Taycan is no mere concept car. In fact, the dealer launch program, themed as “Soul Electrified,” presented Porsche’s first fully electric vehicle in preparation for its much-anticipated arrival in various markets next year. Included among these markets is the Philippines.

“We promised a true Porsche for the age of electromobility — a fascinating sports car that not only excites in terms of its technology and driving dynamics, but also sparks a passion in people all over the world, just like its legendary predecessors have done. Now we are delivering on this promise,” said Michael Steiner, member of the Executive Board of Porsche AG — Research and Development.

The Taycan dealer launch culminated in an impressive unveiling that focused on the model’s design elements. With its clean, pure design, the Taycan signals the beginning of a new era even as it retains the unmistakable Porsche design DNA. The model’s technical features, as well as the e-preparedness of all the countries, also formed a crucial part of the launch program.

Currently available in two versions, the Taycan is the first production vehicle with a system voltage of 800 volts, instead of the usual 400 volts for electric cars. This is a particular advantage for Taycan drivers. Because in just over five minutes, the car’s battery can be recharged using direct current (DC) from the high-power charging network, which is good for a range of up to 100 kilometers (according to WLTP). The charging time for 5% to 80% SoC (state of charge) takes 22.5 minutes under ideal conditions, and the maximum charging power, or peak, is 270 kW. The overall capacity of the Performance Battery Plus is 93.4 kWh. This all means Taycan drivers can comfortably charge their cars with up to 11 kW of alternating current (AC) at home.

The flagship Turbo S version of the Taycan can generate up to a whopping 761ps. It has a combined power consumption of 26.9 kWh/100 km and a combined CO2 emissions 0 g/km on overboost power in combination with Launch Control. It accelerates from zero to 100 km/h in a mere 2.8 seconds. Its driving range is rated at up to 412 kilometers.

Meanwhile, the Taycan Turbo can deliver up to 680ps and has a combined power consumption of 26.0 kWh/100 km and a combined CO2 emissions 0 g/km. It can sprint from zero to 100 km/h in 3.2 seconds and has a range of up to 450 kilometers. The top speed of the Taycan Turbo S and Taycan Turbo — both all-wheel drive — is 260 km/h.

“The Taycan links our heritage to the future. It carries forward the success story of our brand — a brand that has fascinated and thrilled people the world over for more than 70 years,” said Oliver Blume, chairman of the Executive Board of Porsche AG.

Porsche simultaneously premiered the Taycan in three continents — North America, China and Europe — last September. The new four-door sports sedan is a unique package offering characteristic Porsche performance and connectivity with everyday usability. At the same time, highly advanced production methods and the features of the Taycan are setting new standards in the fields of sustainability and digitalization.

Skyway extension to be completed by Oct. 2020

THE construction of the Skyway extension at South Luzon Expressway (SLEx) is expected to be finished by September or October next year, two to three months ahead of the initial target completion date.

“By next year, September or October, we will complete the Skyway Extension. This will solve northbound and southbound traffic congestion once and for all,” San Miguel Corp. (SMC) President and Chief Operating Officer Ramon S. Ang was quoted as saying in a statement on Saturday.

SMC manages the Skyway Operations and Maintenance Corp. (SOMCO) which is currently undertaking a P10-billion extension on both directions of the Skyway from the toll plaza of the main line linking to Susana Heights. Construction of the four-kilometer elevated viaduct started in June and was initially scheduled for completion by December 2020.

Once completed, the project’s three new northbound lanes will be able to accommodate an additional 4,500 vehicles per hour. The two additional southbound lanes will be able accommodate an additional 3,000 vehicles per hour.

Mr. Ang admitted the preliminary work on the project has inconvenienced motorists. He reiterated that the traffic flow along SLEx will normalize by Dec. 1 this year.

“My commitment to you is that by Dec. 1, all preliminary work will be done,” he said, adding that the company has started installing a temporary steel on-ramp connecting the Alabang viaduct to the Skyway.

SMC said the ramp will have two lanes and will be operational by Dec. 1. It will expand the northbound section of SLEx in Alabang from three lanes to five lanes.

“Traffic will not only return to normal levels, it will even improve. That’s because we are also opening the temporary ramp from the Alabang viaduct going up to Skyway. With a total of five lanes northbound, I think we can expect a significant improvement in the traffic,” Mr. Ang said. — Arjay L. Balinbin

Sarah Jessica Parker on ‘stunning’ demise of ‘beacon’ that was Barneys

ACTRESS Sarah Jessica Parker is forever linked to New York City and its luxury shops. In six seasons of HBO’s Sex and the City, her character, Carrie Bradshaw, cherished the gilded halls of Saks Fifth Avenue, Bergdorf Goodman, and Bloomingdale’s, with their pristine shelves and racks filled with Chanel handbags and Prada dresses. But her heart belonged to Barneys, its Madison Avenue flagship heralded as one of the premier couture epicenters of America. (“So what district do you vote in?” someone asks Carrie in the third season. “Whichever one is near Barneys,” she responds.)

Now Barneys New York is bankrupt, and those glory days are long gone. But for Parker, now a shoe-selling businesswoman with two SJP Collection boutiques in the city, it wasn’t just her character that had the love affair with that illustrious department store.

“To me, Barneys was the gold standard,” Parker says backstage at Bloomberg’s The Year Ahead conference, one week after it was announced that the Barneys business would be sold for scraps. “It wasn’t a store that I could afford, but I didn’t mind it. It was like a beacon. Like maybe one day — if you save smart and earned enough…” she stops herself, trying to find the right words to properly eulogize a fading New York cultural icon. “It’s stunning. It’s really shocking.”

In August, Barneys New York, Inc. filed for bankruptcy protection with the hopes that it could find a buyer that would allow it to keep seven stores open, but that didn’t work out. Authentic Brands Group has bought the Barneys name and will license it out to other companies. Its stores will shutter, and the couture goods will be liquidated, sold off in ongoing clearance sale with private events for Barneys loyalists. As of Friday, gift cards can no longer be redeemed. The flagship store, once a nine-story titan of high fashion, will remain open for now — albeit in a shrunken state. Remnants of Barneys will cling to life within Saks, which will roll out scaled-down Barneys-branded shops inside some of its locations.

The store’s founder Barney Pressman opened the original shop in 1923 hawking discounted men’s clothing for the salesmen who couldn’t afford the higher realms of tailoring. Parker, who moved to New York from Cincinnati as a kid in the 1970s, remembers when her brothers would get suits for themselves there. The store went upmarket decades later, replacing the dusty overstock merchandise with European designer goods to court Wall Street bankers and businessmen. Her parents, Parker says, would sometimes shop there, but they’d always wait for that annual warehouse sale.

As sad as it is for shoppers, it’s even more trying for designers, says Parker, as the fall of Barneys also closes an important avenue for fashion’s upstarts to get visibility in a crowded industry. Barneys played a role as a gatekeeper to the city’s other department stores and trendy fashion boutiques because it was willing to take chances on new label. (Parker’s show label wasn’t sold at Barneys, but it’s on the shelves and websites of many of its competitors, including Saks, Bergdorf, and Bloomingdale’s.)

“It’s been a leader in fashion, and I think it’s really upsetting for a lot of designers who have counted on that relationship to open the door to other retail opportunities,” says Parker.

Despite clearance-tagged items and “Everything must be sold!” signs in Barneys’ windows, Parker doesn’t plan to scurry to the liquidation sale. She has already cashed in her last gift card, given to her years ago. The last item she bought at Barneys was a backpack, although she couldn’t remember the brand.

“There are some really dedicated and devoted Barneys shoppers. I don’t count,” says Parker, “but a moment of silence will be observed.” — Bloomberg

Yields on gov’t debt flat

By Lourdes O. Pilar
Researcher

GOVERNMENT BOND yields barely changed last week even with lower inflation and faster-than-expected economic growth in the third quarter.

Debt yields, which move opposite to prices, went down by 0.4 basis point (bp) on average week-on-week, based on the PHP Bloomberg Valuation (BVAL) Service Reference Rates of Nov. 8 published on the Philippine Dealing System’s website.

Yields on Treasury bills (T-bill) fell across the board, led by the 364-day T-bill with a 3.7-bp decline to 3.578%. This was followed by the 91- and 182-day T-bills, which dropped one basis point and 0.8 bp to yield 3.162% and 3.3%, respectively.

Bonds at the belly of the curve also went down. The two- and three-year Treasury bonds (T-bonds) yielded 3.877% and 3.997%, down 0.4 bp and 0.2 bp, respectively. Similarly, the four-, five-, and seven-year papers yielded 4.125%, 4.253%, and 4.466%, which were lower by 0.1 bp, 0.6 bp, and 1.3 bps week on week.

On the other hand, yields on longer-term T-bonds went up, with the 10-, 20-, and 25-year debt papers yielding 4.674%, 5.094%, and 5.108%, up by 0.5 bp, 1.2 bps, and 2.1 bps, respectively, from a week ago.

“[Y]ields may have been nearly sideways week-on-week as inflation is already widely expected by the financial markets to have bottomed out in October 2019 at 0.8%…due to the easing high base/denominator effects starting November 2019,” said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in an e-mail interview.

“Local benchmark yields were also nearly steady with minimal changes week-on-week after the stronger-than-expected Philippine gross domestic product (GDP) growth data of 6.2% year-on-year in [third quarter of 2019], the highest so far [this year] and above market expectations of about six percent, as this may have been an offsetting factor to the slight easing in the latest inflation data and the softer data on imports and exports,” he added.

In a separate e-mail, a bond trader said yields on the short- and medium-term tenors mostly declined after the Bangko Sentral ng Pilipinas (BSP) reduced the reserve requirement ratio (RRR) by another 100 bps effective this month, as well as from market expectations of subdued domestic inflation for October.

The reserve ratio of universal and commercial banks (U/KBs) now stands at 15% following the effectivity of the 100-bp cut in the RRR that was announced in September. Meanwhile, the RRRs of thrift banks and rural banks are now at five percent and three percent, respectively.

The BSP announced last month that the reserve ratio of universal, commercial and thrift banks will be slashed by another 100 bps effective December, bringing total reductions to their reserve ratios for this year to 400 bps. This cut will also apply to the reserve ratio of non-bank financial institutions and quasi-banking functions (NBQBs).

This will bring the RRRs of U/KBs and thrift banks to 14% and four percent by December, respectively. On the other hand, the reserve ratio of NBQBs will be cut to 14% next month.

Meanwhile, the Philippine Statistics Authority (PSA) reported last Tuesday the headline inflation decelerated to 0.8% in October from 0.9% in September, the slowest in three-and-a-half years or since April 2016’s 0.7%.

The day after, PSA reported the country’s trade-in-goods deficit narrowed to $3.12 billion in September from $4.02 billion in the same month last year amid an import decline of 10.5% outpacing that of exports, which contracted by 2.6%.

On Thursday, the government reported a third-quarter GDP growth of 6.2%, marking the fastest clip this year so far and picking up from the year ago’s six percent. This brought year-to-date GDP growth to 5.8%, closer to the lower end of the full-year goal but still a slower than last year’s 6.2%.

“Local interest rate benchmarks could again be steady to slightly lower, in view of the upcoming local monetary policy-setting meeting on [Thursday], especially if the BSP keeps its key policy rates unchanged, as consistent with earlier signals from local monetary authorities that there will be no more cuts in both local policy rates and RRR for the rest of 2019,” Mr. Ricafort said.

“However, in view of the 0.25-percentage-point [policy rate cut by the US Federal Reserve] on October 30, a possible cut in local policy rates cannot be completely ruled out, especially in the coming months.”

For the bond trader, local yields “might move with an upward bias” this week as the BSP is expected to hold its policy rates steady during its November meeting amid views that inflation has already bottomed out in October.

“Moreover, positive developments on the US-China trade talks are also seen to boost yields,” the bond trader added.

For ING Bank N.V.-Manila Senior Economist Nicholas Antonio T. Mapa: “Market players will be looking to the BSP meeting later next week for direction even if BSP Governor Benjamin E. Diokno signalled no more policy adjustments.”

“Possible comments from Governor Diokno on forward guidance could still give traders direction,” he said.

Social enterprise to set up urban farms on subscription model

SOCIAL enterprise Uproot Urban Farms said it hopes to establish 10 grow hubs in Metro Manila next year to serve the growing population which it believes may not be adequately served by the agriculture industry in its current state.

“Next year, we are hoping to have at least 10 across Metro Manila,” Uproot Founder and Chief Executive Officer Robi F. Del Rosario told BusinessWorld in an interview.

“I really believe our present agriculture system is not enough to feed our population, and they say that by 2030, majority of the people will be living in cities, so it us makes sense that we grow the food where it is consumed,” he said.

According to the Philippine Statistics Authority (PSA), the National Capital Region (NCR) has a total population of 12.877 million in 2015, up 8% from the last census.

According to the Social Weather Stations (SWS) polling organization, the national hunger rate in the third quarter was 9.1%, or about 2.3 million families experiencing involuntary hunger at least once during the period. Of this total, 7.4% or about 1.8 million families experienced “moderate hunger”, down from 8.7% in the second quarter, and 1.7% or 426,000 families experienced “severe hunger,” up from 1.3%.

People are classified under the “moderate hunger” category if they experienced involuntary hunger once or a few times in the past three months. Those under “severe hunger” experienced hunger often or always.

“For a country still struggling to attain food security, this is unacceptable. Our goal is to have every barangay to have a grow hub to lessen food waste and to provide our consumers, not just high-quality, but also high-nutrient produce,’ Mr. Del Rosario said.

He noted that target areas include the cities of Pasig, Taguig, Makati, and Pasay. Currently, the company has three hubs in Rizal province, while another hub will soon be built within Intramuros, which will be built through the prize money the company received from the country’s first-ever Total Philippines’ Startupper of the Year challenge in February.

“The plan is really to grow food within the cities, and (there is really) limited space, and the only way to grow a significant amount of food is by using… aquaponics,” he said.

Aquaponics is a combination of aquaculture, or growing fish and other aquatic animals, and hydroponics, or growing plants without soil.

Prior to building 30-square meter (sq.m.) hubs, the company establishes facilities which could contain 100 tilapia and grow 36 varieties of plants. Capital needed to build such a facility is P30,000; for a 30-sq.m. grow hub, the required investment is P200,000-P250,000.

Mr. Del Rosario said that one of the main reasons why people choose to eat unhealthy food is the need to travel to the market or grocery, which adds cost and time. These hubs serve as growing centers for a variety of vegetables, which are then delivered to subscribers. The company also shares recipes with subscribers.

“The most common feedback that we have received is convenience… they do not have to go to the grocery to buy more tomatoes than the one or two that they need,” with the rest going to waste,” Mr. Del Rosario said. — Vincent Mariel P. Galang

Honda introduces new City variant, the 1.5 S CVT

HONDA has introduced a new variant of its best-selling City model, the 1.5 S CVT. This new variant is designed for customers who wish to own a well-equipped City in a more affordable package.

The Honda City is Honda’s best-selling nameplate in the Philippines. It enjoys the trust of Filipinos looking for a practical, stylish and comfortable subcompact sedan, equipped with a powerful and efficient engine, spacious interior and cargo capacity.

The new City 1.5 S CVT is Honda’s most affordable variant in the City model lineup to be equipped with a Continuously Variable Transmission. Together with the City’s 1.5-liter SOHC i-VTEC engine that produces a maximum power of 120 ps and a maximum torque of 14.8 kg-m, the synergy of the engine and the CVT transmission provides a smoother ride with uncompromised fuel efficiency. Combined with the various safety and convenience features such as LED Daytime Running Lights, Front Driver and Passenger Airbags, Anti-Lock Braking System (ABS) with Electronic Brake-force Distribution (EBD), 1-DIN Audio with USB and AUX inputs, and Keyless Entry as standard, the City 1.5 S CVT aims to give customers one of the best value for money propositions in its class.

The New Honda City 1.5 S CVT is now available at all Honda Dealerships with a suggested retail price of P820,000 and will be available in four colors: Lunar Silver, Modern Steel Metallic, Crystal Black Pearl, and Taffeta White.

Better-than-expected earnings drive SMIC stock higher

SM Investments Corp. (SMIC) was the most actively traded stock last week after the company’s third-quarter earnings exceeded expectations.

A total of P3.345 billion worth of 3.181 million SMIC shares exchanged hands from Nov. 4 to 8, Philippine Stock Exchange (PSE) data showed.

SMIC stock grew by 3.88% on a week-on-week basis to P1,070 apiece last Friday. Since the start of the year, the stock has risen by 16.88%.

“SMIC recently reported 3Q earnings, which were above expectations,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in an e-mail interview last Friday.

“The strong performance of its core businesses, namely property and banking, was enough to offset the one-percent decline in SM Retail, Inc…,” he added.

Unicapital Securities, Inc. Technical Analyst Cristopher Adrian T. San Pedro likewise cited the conglomerate’s earnings growth, noting foreigners are taking positions on the stock.

“It also recorded net foreign buying of P985.64 million (Nov. 4-7) in value turnover [last] week as the investors anticipate the rosy third-quarter earnings report,” Mr. San Pedro said.

The day before the release of the earnings report saw 729,660 SMIC shares being traded, bringing the stock’s intraday and closing price to P1,091 apiece. Some traders then took profits the day after, bringing the stock’s closing price down to P1,057 per share.

Net foreign buying for SMIC stood at P1.53 billion last week, 41% more than the P1.08 billion recorded the previous week.

The holding firm of the Sy family posted a net income of P33.1 billion as of end-September, up 26% from a year ago.

Its banking business accounted for 44% of SMIC’s reported net earnings. The period saw the earnings of BDO Unibank, Inc. and China Banking Corp. surge by 49% to P32.1 billion and 21% to P6.7 billion, respectively.

SM’s property segment, which is operated by SM Prime Holdings, Inc., saw an 18% year-on-year growth in its net income to P27.6 billion amid a 14% rise in revenues to P85 billion. Its mall segment posted an 8% growth in revenues to P42 billion while that of its residential business increased 26% to P31.9 billion.

On the other hand, its retail business, which is operated by SM Retail, reported a net income of P7.8 billion during the nine-month period, lower by 1% as a result of the implementation of the Philippine Financial Reporting Standards (PFRS) 16 that took effect this year. Excluding the impact of PFRS 16, net income in this segment grew by eight percent.

SM Retail’s revenues rose 12% to P253.9 billion during the nine-month period.

“We believe SMIC is in a position to break out net income forecast of P45 billion given that it is already ahead by 26% for the first nine months of the year,” Regina Capital’s Mr. Limlingan said.

For Unicapital’s Mr. San Pedro: “We expect the company to earn at least P36.4 billion [for the full-year 2019] to be driven by the core business of its property and banking segments.”

Mr. San Pedro noted the stock “remains bullish” as it is “supported by the bullish rounding bottom pattern in the medium term.”

“We expect the stock to range between [the support of] P1,020 and [the resistance level of] P1,091 with a [target price of] P1,142 if it stays above P1,040 in the short term,” Mr. San Pedro said.

Meanwhile, Regina Capital’s Mr. Limlingan pegged the stock’s support at P1,020 and resistance at P1,100. — Jobo C. Hernandez

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