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Rambo producer Vajna, 74

BUDAPEST — Andrew G. Vajna, the Hungarian movie producer behind Rambo, Evita and other international hits, died in his Budapest home on Sunday following a long illness, the Hungarian National Film Fund said.
Mr. Vajna produced 59 films in all, including the 1996 Evita starring Madonna and Sylvester Stallone’s first three Rambo movies.
He was born in Budapest in 1944 and at the age of 12, when Hungary’s 1956 revolution against Soviet rule was crushed, he fled the country and emigrated to Canada with the help of the Red Cross. He was reunited with his family in Los Angeles.
His 1997 comedy, based on a play titled Out of Order by English playwright Ray Cooney, holds the record for ticket sales among Hungarian movies produced over the past two decades.
Since 2011, he had worked as a government commissioner under Prime Minister Viktor Orban, presiding over a revival of Hungarian cinema.
“We are bidding farewell to the greatest Hungarian film producer. Hasta la vista, Andy! Thank You for everything, my Friend!” Mr. Orban said on his Facebook page.
Movies during his term as commissioner won hundreds of international awards. They included Son of Saul, which won an Oscar for its portrayal of life in a Nazi concentration camp.
As part of Mr. Orban’s efforts to expand his influence over the domestic media, Mr. Vajna also acquired one of Hungary’s main commercial television channels and had stakes in the commercial radio market. — Reuters

Quintel tapped as US distributor of Filtronic

A SUBSIDIARY of Cirtek Holdings Philippines Corp. (CHPC) has been tapped by London-based electronics manufacturer Filtronic PLC for the distribution of certain antenna products in North America.
In a disclosure to the stock exchange on Monday, CHPC said its wholly-owned unit Quintel USA, Inc. has been appointed by Filtronic as the exclusive distributor in North America of antenna products to some mobile network operators.
“This distribution agreement is an excellent opportunity for Filtronic to gain greater traction in the US market. We are delighted to be working with Quintel and we believe that we complement each other very well,” CHPC quoted Filtronic Chief Executive Officer Robert Smith as saying in a statement.
US-based firm Quintel was acquired by CHPC in July 2017, as part of efforts to expand its footprint in the antenna market. The company looks to grow Quintel into a $500-million revenue firm, after which they target to list the company in the Nasdaq Stock Market.
Aside from a distribution agreement, the two firms also signed a memorandum of understanding where they can identify areas of cooperation ranging from product co-development to manufacturing.
Filtronic designs and manufactures advanced radio frequency communications products, which are supplied to leading original equipment manufacturers in the mobile telecommunications infrastructure and critical communications markets.
CHPC noted that Filtronic’s antenna products are complementary to Quintel, with very minimal overlaps in the product lineup.
The products covered by the deal include Quasi-Omni and Panel antennas which are specifically produced for the US market. Other products are for 4G/LTE and 5G Evolution applications for frequency ranges between 600 megahertz and 6 gigahertz.
“The cooperation will augur well for both groups due to clear symbiotic business objectives as Filtronic can leverage on Quintel’s extensive organic sales force supported by a strong sales representative organization covering entire US markets for the distribution of its products,” CHPC Vice Chairman and President Roberto Juanchito T. Dispo said in a statement.
Mr. Dispo also noted that there is a “strong potential” to further elevate their partnership to a “higher level of business collaboration in the future.”
CHPC booked a net income attributable to the parent of $5.53 million in the first nine months of 2018, almost double its $2.77- million profit in the same period a year ago. This followed a 30% jump in gross revenues to $88.48 million in the nine-month period.
Shares in CHPC dropped 1.44% or 45 centavos to close at P30.85 each at the stock exchange on Monday. — Arra B. Francia

Gov’t partially awards T-bill offer

THE GOVERNMENT made a partial award of the Treasury bills (T-bill) it auctioned off yesterday amid robust demand for the longest tenor, as it opened its tap and over the counter (OTC) facilities to accommodate more bids.
The Bureau of the Treasury raised P16.347 billion out of the programmed P20 billion at its auction on Monday, lower than the P22.405 billion raised a week ago.
The BTr opted to partially award the instruments even as tendered bids amounted to P51.404 billion, more than twice the amount it intended to raise. However, yesterday’s total offers were lower than the P66.939 billion fetched during the previous T-bills auction.
Broken down, the BTr borrowed just P2.347 billion out of the P6 billion the government wanted to raise via the 91-day debt. Total offers stood at just P3.16 billion, fetching an average rate of 5.418%, 2.2 basis points (bp) higher than the 5.396% last week.
Had the government accepted all tenders, the papers would have fetched an average rate of 5.66%, up 26.4 bps from the previous offer.
Meanwhile, the Treasury made a full award of the 181-day debt notes on offer, borrowing P6 billion as planned versus total offers amounting to P12.037 billion. The average yield declined 24 bps to 5.914% from last week’s 6.154%.
The government likewise fully awarded the 364-day bills, accepting P8 billion out of the total bids worth P36.207 billion. Its average yield also slid by 28.4 bps to 5.969% from the 6.253% tallied in the previous auction.
Based on the PHP Bloomberg Valuation Service Reference Rates, the three-month, six-month and one-year papers were quoted at 5.698%, 6.124%, and 6.255% yesterday, respectively.
To maximize the strong demand, the government opened a tap facility for the one-year papers from 2 to 4 p.m. yesterday to raise up to P8 billion more. It was made available to the 10 financial institutions earlier named as market makers.
On the other hand, the Treasury also opened the OTC sale of the 91-, 182- and 364-day instruments to government-owned and -controlled corporations.
Sought for comment, Deputy Treasurer Erwin D. Sta. Ana said the Treasury saw a good turnout during yesterday’s auction as it saw tenders totalling P51 billion.
“We have opened the tap [facility] for the 364[-day bills]. Obviously, [given that we saw] P36 billion in total tenders, there’s really excess demand on the 364[-day tenor],” Mr. Sta. Ana told reporters yesterday.
He added that the interest rates should stabilize in the near term given that market players are pricing in the steady increase in commodity prices.
“It (interest rate) normally follows the inflation trajectory. So given that the market is factoring in stabilized inflation in the near term or maybe until next year, we would expect interest rates to behave the same.”
“As you know we aim to raise…a sizeable amount of domestic borrowings given our target mix. So we see that there’s liquidity now in the secondary market. Trading volume is up so it’s just riding that opportune window,” Mr. Sta. Ana added.
Meanwhile, a trader said the auction was within market expectations, as longer tenors continue to receive the bulk of the bids.
“Right now, there’s demand in the T-bills, but since its rates significantly dropped from the start of the year, we might see some resistance going forward. The rates might only move sideways in the subsequent auctions,” the trader said in a phone interview. — Karl Angelo N. Vidal

Momoland to hold fan meet

MOMOLAND the girl group behind the dance hit “Bboom Bboom” will be coming to the Philippines for a fan meeting on Jan. 25 at the Smart Araneta Coliseum in Cubao, Quezon City. The nine-member group recently bagged numerous awards, including the MNET Asia Music Award’s\Discovery of the Year, and Asia Artist awards Best Icon — Music. Fan meet tickets range in price from P1,500 for General Admission to 7,000 for SVIP Seated and are available at Ticketnet outlets and online. For details about the Momoland Fan Meeting in Manila, follow DnM Entertainment on Facebook: www.facebook.com/dnmentph; Twitter: www.twitter.com/dnmentph; and, Instagram: www.instagram.com/dnmentph.

Run-down buildings are hot property in land-scarce Hong Kong

IN A CITY with stratospheric land prices, run-down buildings can be hot property.
Hong Kong developers are increasingly acquiring and revamping old buildings as land gets more expensive. The number of applications for compulsory sales — allowing developers to gain full control of an apartment block after securing 80 percent ownership — climbed to a six-year high in 2018, government figures show.
“A red-hot government land sales market in 2017 and early 2018 and large plots on offer — which translates into bigger lump-sum investments — effectively shut out a lot of small-to-medium sized developers,” said Denis Ma, head of research at Jones Lang LaSalle Inc.
These companies were forced to focus on breathing new life into old buildings to sustain their development pipelines, he said.
Rejuvenating old buildings also allows developers to get a foothold in prime areas where land is scarce, according to Reed Hatcher, head of research at Cushman & Wakefield Plc.
During the height of the property boom between early 2017 and mid-last year, land sold at government tenders fetched increasingly eye-watering prices. Sun Hung Kai Properties Ltd. paid an unprecedented $3.2 billion for a residential site near the city’s former airport in May, almost one-and-a-half times the previous record set in November 2017. — Bloomberg

PCC clears Cosco deal to sell Liquigaz

COSCO Capital, Inc. has completed its divestment from Liquigaz Philippines Corp., after the Philippine Competition Commission (PCC) approved its sale to Fernwood Holdings, Inc last week.
In a decision posted on its website last week, the PCC said it “has resolved to take no further action with respect to the proposed transaction.”
“(T)he proposed acquisition by Fernwood Holdings, Inc. of shares in Liquigaz Philippines Corp will not likely result in substantial lessening of competition within the market for bulk and cylinder supply of liquefied petroleum gas in the Luzon geographic market…,” the PCC said.
Cosco disclosed its decision to sell its entire stake in Liquigaz to Fernwood Holdings in October 2018, saying this will allow the firm to maximize shareholders’ value and achieve financial flexibility moving forward.
While the listed firm did not disclose the deal’s value, it noted that it is less than 12% of the company’s total assets as of December 2017 or P111.61 billion.
Cosco acquired Liquigaz from SHV Energy of the Netherlands in 2014.
Incorporated in 1988, Cosco’s interest spans to grocery retail, real estate and property leasing, liquor distribution, oil and mining, and specialty retail. Its subsidiaries include Puregold Price Club, Inc. and S&R Membership Shopping, Ellimac Prime Holdings, Inc., and Office Warehouse, Inc.
The company realized a 16% increase in net income attributable to the parent to P3.97 billion during the first nine months of 2018, following a 17% increase in gross revenues to P122.18 billion.
It attributed the positive performance to Puregold and S&R, which contributed 59% of total profits. Cosco’s businesses were boosted by the continued economic growth, as well as higher consumer spending due to the implementation of the tax reform law.
The commercial real estate segment accounted for 22%, while liquor distribution provided 13%. At the time, the combined earnings of Liquigaz and Office Warehouse contributed a total of 10% to net profit.
Shares in Cosco gained 0.56% or four centavos to close at P7.24 each at the stock exchange on Monday. — Arra B. Francia

IC defers implementation of IFRS 17 by another year

By Karl Angelo N. Vidal, Reporter
THE INSURANCE Commission (IC) has deferred by another year the implementation of new accounting rules for life and non-life insurers to give these firms more time to comply.
Insurance Commissioner Dennis B. Funa said in a statement on Monday that the regulatory agency has deferred the implementation date of International Financial Reporting Standard (IFRS 17) Insurance Contracts for local insurers to Jan. 1, 2023, granting an additional year from the date of effectivity proposed by the International Accounting Standards Board (IASB).
“There is a necessity for an additional period of time, in addition to that proposed by the IASB, to prepare for the implementation of IFRS 17,” Mr. Funa was quoted as saying in the statement.
The new accounting standard was issued by the IASB on May 18, 2017, with a mandatory effective date of annual periods beginning at the start of 2021. This was later deferred for a year to Jan. 1, 2022.
Mr. Funa said the implementation of IFRS 17 was bombarded by challenges such as tight timeline, determination of model, lack of clarity, and tight budget, among others.
He added that other countries have varying implementing periods for IFRS 17 in their jurisdiction.
“In the case of India, they will have an early adoption of IFRS beginning either 2020 or 2021. Malaysia, on the other hand, will adopt it in 2021 but subject to the development of IASB,” the commissioner said, adding that only Thailand intends to comply with IFRS based on the date proposed by the IASB.
Meanwhile, local insurance companies that are willing to comply with the new accounting rules can already do so.
“Insurers who wish to voluntarily comply with the IFRS 17 before the deferred effectivity date are not precluded to implement the same. In fact, based on the issue papers submitted to the Insurance Commission, there are insurance companies set to implement IFRS 17 due to the requirement of their respective parent companies,” Mr. Funa said.
The IFRS is a set of accounting standards that are recognized by 166 economies, including the Philippines. It provides a guide on how transactions and other information should be reported in financial statements.
Currently, the IFRS 4 Insurance Contracts is being observed and implemented.
Sought for comment, Philippine Insurers and Reinsurers Association Deputy Chairman Michael F. Rellosa said it welcomes the decision, as the extra year will give non-life insurers more time to comply with the new requirements.
“The effect of the [new rules] is widespread. For one, it changes the way we recognize our assets and liabilities… We might have to put up our reserves,” Mr. Rellosa told BusinessWorld in a phone interview.
He added that the new accounting standards may require insurers to procure new software and servers, which will cost them millions.
The implementation of IFRS 17 comes at a time when insurers are beefing up their capital ahead of the upsized minimum statutory requirement of the IC, wherein insurance companies should have at least P900 million in net worth by the end of 2019 from the current P550 million.
Mr. Funa told reporters on Friday that he is “concerned” that some non-life insurers are “still far off” from the minimum required capital.
“It’s going to be a huge disruption. The additional one year will be helpful so we can do extra preparation like simulation,” Mr. Rellosa added.
He also urged the concerned agencies such as the IC, the Securities and Exchange Commission (SEC) as well as the Bureau of Internal Revenue to reconcile on what time frame will be followed by insurance companies to avoid confusion.
“However, if SEC did not defer, the deference of IC won’t matter. We might end up giving three different financial statements, so they have to reconcile it.”
Meanwhile, the Philippine Life Insurance Association, Inc. has not replied to request for comments as of press time.
The IC added that pre-need firms, health maintenance organizations and mutual benefit associations shall maintain compliance with the currency accounting standards until further required to comply with the IFRS 17.

Delay in PEZA accreditation of office buildings to hurt IT-BPM sector expansion

THE SLOW PACE of Philippine Economic Zone Authority (PEZA) accreditation of office buildings remains a challenge for information technology and business process management (IT-BPM) companies looking to expand this year, according to several real estate consultancy firms.
Jones Lang LaSalle (Philippines), Inc. (JLL) Head of Research and Consulting Janlo de los Reyes said office space demand this year will be driven by IT-BPM and offshore gaming companies, but the former’s expansion is being hampered by the continued delays in PEZA accreditation of office spaces.
PEZA grants tax perks to locators in accredited office buildings.
“For (IT-BPM companies), maybe the incentives are really a big factor in their decision. For some… maybe they can accommodate a bit of risk… they can scale it and see better returns. So, it’s really a matter of that profile, but overall it’s still positive,” Mr. de los Reyes told BusinessWorld in an interview on Jan. 11.
Pronove Tai International Property Consultants said the IT-BPM companies’ take-up of office space in 2018 would have been better without the delay in PEZA proclamations.
“We did have the strongest… take-up in 2018 compared to all other years, but it could have been better. It could have been better without the delays in PEZA proclamations, which was actually worse than 2017,” Monique Cornelio-Pronove, chief executive officer of Pronove Tai International Property Consultants, said during a media briefing on Jan. 9.
Citing PEZA data as of end-December 2018, Pronove Tai noted the agency only approved six IT Center and Park proclamations out of 62 pending applications. In 2017, PEZA approved 26 IT Center and Park proclamations out of 81 total applications.
“In 2016, the approval time was 4 months… In 2017, it lengthened to about 6 months. In 2018, it was worse at 14 months, so if you have applications for PEZA on the desk of the President, it sat there for an average of 14 months. So, if this continues to happen and this was one of the reasons why in 2017, we did not see… IT-BPM grow… We still have corporations that want to grow but cannot grow because PEZA buildings are important,” Ms. Pronove said.
In a separate report, Colliers International Philippines said only 36 out of 78 PEZA IT Center and Park applications have been approved, with an approval rate of 46% since President Rodrigo R. Duterte started his term in 2016.
“Colliers encourages the government to expedite the approval of PEZA applications,” it said, noting the PEZA accreditation will boost pre-leasing of office space due to be completed in 2019 and 2020. — Vincent Mariel P. Galang

Perfect for the nuts ‘n’ bolts types


Project Highrise:
Architect’s Edition
Nintendo Switch
Nickelodeon Kart Racers
Nintendo Switch
GIVEN THE myriad similarities, Project Highrise’s pre-availability hype as a spiritual successor to Sim Tower: The Vertical Empire is well deserved. As with Maxis’ 1994 release, it delves deep into building construction and management, granting you absolute freedom to craft the skyscraper under your tutelage as you see fit and subsequently steering it to progression and sustainable development. And because of the two-decade gap between releases, developer SomaSim is able to take advantage of technological and technical advancements in the industry to present a stunningly immersive experience.
For simulation titles, the devil is in the details, and Project Highrise on the Nintendo Switch delivers in spades, and perhaps too much on occasion. Content wise, it’s the most complete; the Architect’s Edition boasts of all the five downloadable add-ons from the base game’s version on the personal computer, and thusly produces enhanced features perfect for gamers at home or on the go. It makes the work you do — which is exactly what your role as property manager implies — engrossing and fulfilling. There is so much micromanagement required of you over time that the crisp feedback and modern look and feel are what prevent you from deeming it interminable tedium.
Parenthetically, it helps that Project Highrise is aesthetically and aurally pleasing. Colors are vibrant, but from a set that emphasizes the title’s nod to realism. Meanwhile, the background music evokes pleasant, if snappy, rhythms, with the gameplay track providing appropriate action and control cues. The interface adjusts according to how you play. With the Switch docked, menus abound and allow you to direct proceedings with requisite promptness. That said, there is no handicap for you in portable mode; thoughtful changes are made to the setup in cognizance of the smaller screen, enabling magnification without sacrifice to accessibility.
Needless to say, Project Highrise hangs its hat on the way it provides you with a bevy of options from the get-go. Every decision you make has value and consequence. Would you like to build a mall? Are you more into housing? Do you go for a mixed-use structure? You can start big, but you run the risk of biting off more than you can chew. You can go small, albeit doing so likewise tempers the potential of your property. With great power comes great responsibility — and on such seemingly basic concerns as waste disposal, provision of electricity and water, and maintenance of phone lines. Soon enough, you’ll be taking care of tenants’ special and specific requests as well. And how well you do so will determine how much your coffers grow.
Considering the scope of your job, you’d think it easy to be buried underneath a pile of To Dos. And you would be right — but only if you fail to take advantage of the information Project Highrise dutifully provides you. It doesn’t cheat you by hiding it in a ton of submenus that serve to hinder and not help. Rather, it keeps the playing field level by ensuring that you thrive — or subsist, as the case may be — not because of the knowledge you are provided, but because of what you do thereafter.
Needless to say, Project Highrise isn’t for everybody. If you’re into adrenaline-pumping fare, you’re far better off with shoot-‘em-ups and fighting games. If you’re out to be wowed by emotionally charged narratives, you’d do well to chase adventure classics. If you’re a nuts-and-bolts type who gets engaged by sims, however, it’ll be worth your while. At $40, it’s a decided steal that figures to keep you glued to your Switch long before the sun is up and way after everybody else has turned in.
All told, Project Highrise lives up to billing as Sim Tower Junior, but on ‘roids. Once you get hooked, you’ll be hard-pressed to escape its clutches. You’ll find yourself moving to accomplish set goals in order to advance through game scenarios, so much so that, at some point, you’re ready to accept going through its rigors as success in and of itself.
THE GOOD:
• A technological and technical marvel
• Runs smoothly
• Outstanding interface appropriately adjusted for play at home or on the go
• Pleasing aesthetics and sounds
THE BAD:
• Micromanagement is a must
• Detailed goals make the accomplishment of scenarios an exercise in patience
• Random events increase difficulty
RATING: 8.5/10
FOR THE YOUNGER SET
Before anything else, this needs to be out of the way: Nickelodeon Kart Racers is not Mario Kart 8 Deluxe. And neither does it wish to be. As seemingly alike as it may be to Nintendo’s flagship series, it acknowledges its limited scope and tries to meet far less ostentatious objectives. From the outset, its intentions are clear; it simply wants to appeal to kids — and, needless to say, parents out to spend quality time with their kids — who love Nicktoons characters and would like to see the latter race against each other in recognizable settings.
In this regard, Peru-based developer Bamtang Games succeeds in its efforts for GameMill Entertainment and Maximum Games. Leaning on its experience turning intellectual property from other media into the principal protagonists of its creations, it manages to present Nickelodeon Kart Racers as a fair representation of the Nicktoons world. Twelve playable characters from SpongeBob SquarePants, Teenage Mutant Ninja Turtles, Hey Arnold!, and Rugrats are on tap, with locales from the same shows serving as tracks.
In terms of gameplay, Nickelodeon Kart Racers delivers as promised. Controls are easy to master and make for a pleasant driving experience; just about the only aspect that needs improvement is the drifting option, which suffers from inconsistency and thus becomes a risk-reward proposition for those wanting a boost at pain of lost time due to programming quirks. Representative of its source material, slime is a welcome feature and used to positive effect, providing unique twists to the usual kart racing staples.
For all its modest leanings, Nickelodeon Kart Racers likewise exhibits surprising depth. Even as gamers can take advantage of pickups and shortcuts while in races, they profit from their results via earned currency that allows them to change their karts’ parts for the better. In turn, the methods of advancement generate significant replay value. On the flipside, it suffers from a relative lack of fundamental choices. There are no means by which more playable characters from other Nicktoons offerings can be unlocked, a decided lost opportunity given the sheer number of IPs Viacom has on its stable. Who wouldn’t have wanted, say, Fee and Foo from Harvey Beaks or Lincoln Loud from The Loud House to join the roster of racers?
The good news is that Nickelodeon Kart Racers features tracks lifted from the usual haunts in the Nicktoons series, allowing for an immersive experience. Moreover, much thought is given to their in-race layouts. That said, the absence of any chances to add to the total number available stunts its capacity to stay fresh. Additionally, it could have benefited from online play. It does have quite a number of multiplayer modes across three difficulty settings, but collocation is required. Perhaps the interests were in ensuring hassle-free connections and securing safe playing parameters given the age brackets of the gamers.
Technically, Bamtang Games does a yeoman’s job on Nickelodeon Kart Racers given the short three-month turnaround time from announcement to release, but it nonetheless fails to hide its product’s rough-around-the-edges look and feel. Parents — who, it cannot be emphasized enough, hold the purse strings — would have appreciated, for instance, voice and music tracks from the source series. Moreover, it suffers from occasional stutter; its high undocked is at 30 frames per second, but drops to the precarious 20s with increased on-screen activity, and especially when more gamers are in the race.
On the whole, Nickelodeon Kart Racers is a decent release that makes no pretensions on its reach. It’s a niche title that should appeal to the younger set who religiously tune in to their Nicktoons favorites. It could have done better even in light of its targeted simple pleasures, but at $40 and a third less expensive than the gold-standard Mario Kart 8 Deluxe, it provides adequate value for money and myriad opportunities for parent-child bonding sessions.
THE GOOD:
• Familiar characters and landscapes from Nicktoons series
• Easy-to-pick-up gameplay
• Much lower price point than racing-standard Mario Kart 8 Deluxe
THE BAD:
• No opportunity to add to the roster of characters or number of tracks
• No voices or music from source material
• No online modes on offer
• Suffers from occasional frame drops
RATING: 7/10

Hyundai distributor posts 6% sales decline in 2018

HYUNDAI Asia Resources, Inc. (HARI) posted a 6% drop in sales in 2018, amid challenges faced by the auto industry.
In a statement, the country’s official distributor of Hyundai vehicles said sales last year reached 35,401 units, lower than the 37,678 units sold in 2017.
Sales of passenger cars slid 22% to 19,905 units, representing 56.23% of HARI’s total sales in 2018. In 2017, HARI sold 25,529 passenger cars.
The Accent model, which represented 75.56% of the segment, saw an 8.59% year-on-year sales decline to 15,041 units. Other passenger cars such as Eon and Elantra saw sales drop by 50.33% and 32.96%, respectively.
Light commercial vehicles (LCV) was the bright spot for HARI, with sales rising 27% to 15,496 units in 2018, driven by the introduction of the Kona.
Of the models sold under the LCV segment, H-100 saw a 51% jump in sales to 5,203 in 2018, from 3,439 in 2017. Other models, Tucson, Santa Fe and Grand Starex, dropped by 16.22%, 17.49% and 13.67%, respectively.
“Driven by the Kona, Tucson, Grand Starex, and H-100, the brand’s LCV models have topped in their respective sub-segments and ruminatively maintained an upward growth trajectory for the brands. As a result, this has offset any negative effects experienced by the Philippine automotive industry throughout the year,” HARI said.
Car industry players reeled from the imposition of the new vehicle taxes at the start of 2018. Further weakening the domestic market’s appetite was the country seeing inflation rates at ten-year highs.
Ma. Fe Perez-Agudo, HARI president and CEO, said 2019 “may be seen to fare much better” for the overall Philippine economy, thus have positive spillover effects in the automotive market.
“Hyundai’s performance in 2018 has proven that it is capable of remaining relevant in the local automotive market and ended the year on a high note. Thus, the brand is poised to take advantage of 2019 as economic conditions are expected to improve,” Ms. Perez-Agudo was quoted in the statement. — Janina C. Lim

Central banks’ window to restock ammo is closing as growth slows

THE WINDOW to restock monetary ammunition is closing for the world’s major central banks.
With economic growth slowing and inflation lagging in big economies like the US and euro area, a push to escape crisis-era policy settings that include rock bottom interest rates appears at risk of stalling. That will leave less firepower to fight off the next economic downdraft, threatening a prolonged downturn.
“It’s hard to argue that there will have been significant reloading by the time the next recession hits,” said Ethan Harris, head of global economics research at Bank of America Merrill Lynch in New York.
The outlook for the global economy and its policy makers will be front and center at this week’s meeting of the World Economic Forum in Davos, Switzerland. The International Monetary Fund is set to update its forecasts there on Monday, while Bank of England Governor Mark Carney and Bank of Japan (BoJ) Governor Haruhiko Kuroda are among the delegates. Both the BoJ and European Central Bank (ECB) will hold policy meetings this week. Neither is expected to change its stance.
JPMorgan Chase & Co. economists illustrate the limited scope to re-arm. They estimate the average benchmark of developed-world central banks remains almost 2 percentage points below the pre-crisis level, and recent economic weakness and quiescent inflation has forced them to rein in forecasts for how much that gap will close.
They now expect the Federal Reserve to raise rates just two times this year, not the four they thought previously; they’ve pushed back the European Central Bank’s first rate increase to December from September and cut their anticipated hikes next year to two from three; and they no longer see the BoJ lifting its 10-year yield target in 2020.
Some analysts maintain central banks need to move quickly to normalize policy so that they’re better positioned to deal with the next downturn. But policy makers have generally rejected such a strategy, arguing that an economically unwarranted move to a tighter stance could bring about the very economic contraction they’re seeking to avoid.
The upshot is there’ll be less ammo for next time, something likely to worry investors. The Fed, for example, has a current rate target range of 2.25% to 2.5%, about half the 500 basis points in cuts it has made to fight past downturns.
If the ECB was facing its current outlook but with higher rates, it would be easing policy, according to Krishna Guha, the head of central bank strategy at Evercore ISI.
Still, ECB President Mario Draghi has signaled that an increase in rates is possible this year, something a growing number of investors and economists say is unlikely to materialize. Economists at HSBC Holdings Plc reckon that the ECB has missed its opportunity to tighten.
The BoJ has also refrained from taking additional action to spur prices even though underlying inflation remains near zero percent. That might reflect some political pushback against its ultra-easy policies.
“The BoJ will probably prefer to preserve its scarce ammunition,” Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis SA in Hong Kong, wrote in a note. That “would also protect its reputation from frequent policy changes.”
POLICY BLITZ
To understand how much ammunition was spent in the wake of the global financial crisis, consider this: Analysts at Bank of America Corp. calculate central banks cut rates more than 700 times and bought $12 trillion of financial assets since the September 2008 collapse of Lehman Brothers Holdings Inc. Global government debt surged close to 75% to $66.5 trillion, they estimate.
Only the Fed has made any real progress in moving away from crisis settings, with nine rate hikes since late 2015 and by slowly reducing its holdings of securities bought during the crisis and its aftermath.
Low rates are a “fact of life that we as policy makers have to deal with,” Fed Vice Chairman Richard Clarida told Fox Business Network this month. “We have the tools that we think are appropriate to provide support to the economy if needed.”
The ECB and the BoJ are in a tougher spot. Their main policy rates are in negative territory.
“European and Japanese central bankers are most at risk of having to fight the next downturn with their bare knuckles as they haven’t even started to recoup ammunition,” said Joachim Fels, global economic adviser at Pacific Investment Management Co.
That could lead to “meaningful instability in foreign-exchange markets’’ during the next global slump as the Fed cuts rates to counter the downturn while the ECB and BoJ are constrained from acting, said Nathan Sheets, chief economist at PGIM Fixed Income. Investors in that case would be torn between wanting to offload dollars because they yield less and coveting them as a safe haven at a time of economic trouble.
Those diminished arsenals mean policy makers will probably have to burrow ever deeper into unconventional territory. Already, the program of asset purchases known as quantitative easing — rolled out by the ECB, Fed, BoJ and others — has drawn political criticism. Others question the efficacy of QE in reaching parts of the economy ailing from logjams that can’t be resolved by monetary policy.
To make matters worse, other stimulus options may also be more limited next time the global economy needs a boost.
“US tax cuts, which limit space for fiscal stimulus when it is needed, and diminished capacity for international policy coordination, add to the concerns,” said Bloomberg Economics chief economist Tom Orlik. “The prospect of a slower pace of rate hikes by the Fed and delays in normalization from the ECB and Bank of Japan is a reminder that, when the next downturn comes, central banks will have more limited ammunition to fight it.” — Bloomberg

How PSEi member stocks performed — January 21, 2019

Here’s a quick glance at how PSEi stocks fared on Monday, January 21, 2019.

 
Philippine Stock Exchange’s most active stocks by value turnover — January 21, 2019.

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