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Wizards grab Howard

Dwight Howard has been there and done that — and, for that matter, so have his teams. Since being chosen first overall in the 2004 draft, he has built a career that already makes him a bona fide candidate for the Hall of Fame; he’s an eight-time All-Star, a three-time Defensive Player of the Year, and, not too long ago, a legitimate anchor of squads that sought to go deep in the playoffs. These days, though, he’s a gamble, and in more ways than one; even as his talents have diminished with age, he likewise represents a question mark off the court given his playful but sensitive disposition. Which, in a nutshell, is why he has changed addresses four times in the last four years, burning bridges en route.
That said, Howard is from that specific batch of players who tantalize from a distance. He’s just 32 and with tons of experience, including a series in which he did battle for the Larry O’Brien Trophy. And he’s a physical specimen unlike any other; for all the athletes in the league, few, if any, can match his unique combine of strength and hops. Little wonder, then, that the Wizards came calling after the Nets dealt for him just to make him a tool for balancing the books. They’re in a state of flux, barely making the 2018 postseason and yet still harboring Big Franchise Dreams in light of their seemingly stacked roster.
Needless to say, Howard was flattered by the attention; from owner Ted Leonsis to top dog John Wall, the courtship was of the whirlwind type, open and brisk and founded on grandiose promises. And so he signed on the dotted line for the mid-level exception, a bargain by the numbers; after norming 16.6 points and 12.5 rebounds for the Hornets last season, he looks to be a steal at $5.3 million. At stake for him, and for them: the rejuvenation of their respective images.
Perhaps it’s a marriage of convenience. Perhaps it’s borne of mutual need. Both Howard and the Wizards can’t get any worse, and if the partnership fails, they can at least say they tried. But what if it works? What if, for considerations only the hoops gods are privy to at this point, they do wind up coaxing the best from and of each other? Certainly, the possibilities are what give fans cause for hope. At a time when LeBron James has gone West, when the Celtics have gotten better by staying put, and when the Raptors are an even bigger IF, they have the chance to change their fate.
And if for no other reason than because they’re taking that chance, they deserve the benefit of the doubt.
 
Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

Solar Philippines challenges latest bid for Meralco’s power supply

Solar Philippines Tarlac Corp. has offered to sell electricity to Manila Electric Co. (Meralco) at P2.34 per kilowatt-hour (kWh), challenging a previous offer from a competitor at P2.98 per kWh in a move that could become the latest benchmark in pricing solar energy.
“The first year is P2.34 [per kWh], and there’s an escalation and the levelized cost is still significantly below the original offer of P2.98,” Solar Philippines President Leandro L. Leviste told reporters.
“We submitted our offer many months ago and it had taken Meralco a long time to evaluate it. But now we’re hopeful that the proceedings will end soon since they have accepted it as the lowest price in the CSP (competitive selection process),” he said.
CSP is the government scheme aimed at lowering power costs by subjecting a power supply agreement to a price challenge. The original proponent is allowed to exercise a right to match the price offered by the challenger.
“Now [it’s] just subject to the original proponent’s exercise or non-exercise of the right to match,” said Mr. Leviste.
Mr. Leviste said the CSP was delayed because of a new regulation from the Department of Energy that called for new power supply agreements to be redone, this time with the distribution utility calling on power suppliers to submit their competitive bids.
He said Meralco had sought for clarification from the Energy department on whether the new rule covered the offer made to Meralco earlier this year.
“Overall, we just hope that this is yet another signal to the market that solar is the cheapest form of energy in the Philippines, and even with [battery] storage,” he said, adding that his offer could result in the country having one of Asia’s lowest cost of electricity. — Victor V. Saulon

BDO Leasing posts lower net profit in first half

BDO Leasing and Finance, Inc. (BDO Leasing) saw a decline in its net income in the first half of the year on the back of higher funding and operating costs.
In a regulatory filing Wednesday, the listed leasing and financing arm of Sy-led BDO Unibank, Inc. said it booked a net profit of P178 million in the January-June period, 36.9% lower than the P282 million tallied in the same period last year.
BDO Leasing attributed its lower profit to “higher funding and operating costs.”
Despite logging lower net income in the first semester of the year, the firm’s gross revenues climbed 4% year-on-year.
This was mainly driven by the P34-billion interest income from its lease and finance portfolio augmented by service fees and other income.
However, BDO Leasing said this was tempered by higher financing charges and lower interest margins.
Higher documentary stamp tax on its commercial paper issue also helped temper its revenue growth. — Karl Angelo N. Vidal

Asia stocks climb, Japan’s bond yields head higher

Asian equities rose and the dollar strengthened as investors sifted through the latest news on the U.S.-China trade front and positive results from Apple Inc. Bonds fell as Japanese yields climbed higher after the central bank said it would allow more flexibility in yield movements.
Stocks climbed in Japan and South Korea, while they drifted elsewhere in the region. In a move seen as pressuring China back to the negotiating table, the Trump administration will propose raising to 25 percent its planned 10 percent tariffs on $200 billion in Chinese imports, three people familiar with the internal deliberations said. Earlier, the S&P 500 Index capped a fourth monthly gain after Bloomberg reported that the U.S. and China were trying to restart talks aimed at averting a full-blown trade war. The offshore yuan slipped as China weakened its fixing for the currency to the lowest since May 2017.
“The tariff issue is ongoing, I think it’s a negotiating tactic,” Nick Griffin, chief investment officer at Munro Partners, said on Bloomberg Television. “How much we take of this as real and affecting earnings is questionable at this stage. In terms of an actual earnings effect, it’s not that big at the moment, it’s mainly just sentiment and risk appetite and for that it’s a moving feast.”
Central banks remained in focus after the Bank of Japan tweaked its policy settings Tuesday, with the Bank of England expected to hike rates Thursday. The yen held most of its losses from yesterday, when the BOJ move disappointed those who had seen a chance of an outright hike in the bond-yield target. Meanwhile, the Federal Reserve is expected to hold its fire at its meeting Wednesday.
Elsewhere, Apple’s Taiwanese suppliers such as Hon Hai Precision Industry Co. advanced after the company projected sales that beat analysts’ estimates. Crude added to a monthly decline on wagers for higher production. — Bloomberg

US considers higher tariffs on $200 billion in Chinese imports

The Trump administration will propose more than doubling its planned tariffs on $200 billion in Chinese imports, ratcheting up pressure on Beijing to return to the negotiating table, three people familiar with the internal deliberations said.
The US imposed 25% tariffs on $34 billion of Chinese products in early July, and the review period on another $16 billion of imports ends Wednesday. President Donald Trump had threatened an additional $200 billion with levies of 10%, a level the administration may raise to 25% in a Federal Register notice in coming days, one of the people said.
At the same time, representatives of US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they look for ways to reengage in negotiations, according to people who spoke about the deliberations on condition of anonymity.
In a sign the trade standoff is reverberating through Chinese politics, the Politburo signaled Tuesday that policy makers will focus more on supporting economic growth amid risks from a campaign to reduce debt and the dispute with Trump. The communique, which followed a meeting of the country’s most senior leaders led by President Xi Jinping, said the campaign to reduce leverage will continue at a measured pace while improving economic policies to make them more forward-looking, flexible and effective in the second half.
The public comment period on the US tariffs aimed at $200 billion ended Aug. 30 after public hearings Aug. 20-23, according to the US Trade Representative’s office. Announcing a higher tariff is required ahead of the hearings and will send a signal that the Trump administration is upping the pressure on China to make serious concessions.
Asian equities were mixed as investors processed the latest news on the U.S.-China trade front. Stocks climbed in Japan, Hong Kong, China and South Korea and pulled back in Australia. The offshore yuan slipped as China weakened its fixing for the currency to the lowest since May 2017.
Trump directed trade representative Robert Lighthizer to raise the tariff rate to 25%, the people said. The change isn’t final yet and may not go forward after a public review, the people said.
Officials have cautioned that a specific timetable, the issues to be discussed and the format for talks aren’t finalized, but added there was agreement among the principals that more discussions need to take place. Chinese officials haven’t yet commented on the prospects for resuming talks.
While American and Chinese officials have hinted at the possibility of restarting talks in recent weeks, it’s been almost two months since they last held high-level negotiations.
No Deal
“China and the US have had several rounds of consultations and reached important consensus, but regrettably the US did not fulfill its obligations,” Foreign Minister Wang Yi said on Monday. “Nor did it make concerted efforts with China.”
The next wave of US tariffs is set to kick in as soon as Wednesday, with the possible imposition of duties on another $16 billion of Chinese imports. The implementation could be delayed for weeks as the administration works out the details of which products it will target. Officials in Beijing have vowed to respond with the same amount of tariffs on US products.
One person familiar with the internal deliberations said the US is trying to secure certain concessions and if China agrees, it is possible the US would back off additional tariffs.
Complicating Mnuchin’s efforts is a harder line taken by Lighthizer, who has jurisdiction over the US’s 301 investigation that sparked the tariffs. That case concluded China was stealing American technology and tariffs were needed to offset the damage.
A US Treasury spokesman didn’t respond to a request for comment. The Ministry of Commerce in Beijing didn’t immediately respond to request for comment.
The two sides held three rounds of formal talks, beginning with a delegation to Beijing led by Mnuchin in May. After Liu visited Washington later that month, the nations released a joint statement pledging to reduce the US trade deficit with China, among other things. But within days, Trump himself backed away from the deal, saying talks would “probably have to use a different structure.” — Bloomberg

Oil drops on inventories gain with Trump trade war back in focus

Oil extended losses below $69 a barrel after a surprise gain in American crude inventories spooked investors who are already contending with the rising trade dispute between the US and China.
Futures in New York fell as much as 0.8 percent after a 2% decline Tuesday. The American Petroleum Institute was said to report US stockpiles rose 5.59 million barrels last week. Most analysts surveyed by Bloomberg forecast government data due Wednesday will show an inventory loss. Meanwhile, the US will propose more than doubling its planned tariffs on $200 billion in Chinese imports, according to three people familiar with the internal deliberations.
Oil slumped more than 7% in July, the biggest monthly loss in two years, on concern that trade tensions between the world’s two largest economies will imperil growth and sap global energy demand. Still, uncertainties remain whether the latest threats from U.S. President Donald Trump will ratchet up pressure on Beijing to return to the negotiating table or further increase conflict that could lead to a full-blown trade war.
“The API data is moving oil prices as we don’t have a lot of other major news” that would directly impact crude markets, Mikiko Tate, a senior analyst at Sumitomo Corporation Global Research Co., said by phone from Tokyo. Meanwhile, “the escalation of a trade war between the U.S. and China would reduce crude demand in the long term” and that concern could weigh on oil prices, Tate said.
West Texas Intermediate crude for September delivery fell as much as 54 cents to $68.22 a barrel on the New York Mercantile Exchange, and traded at $68.40 at 12:46 p.m. in Tokyo. The contract dropped $1.37 to $68.76 on Tuesday. Total volume traded was about 47 percent below the 100-day average.
Brent for October settlement fell as much as 48 cents, or 0.7%, to $73.73 a barrel on the London-based ICE Futures Europe exchange. The September contract declined 72 cents to expire at $74.25 on Tuesday. The global benchmark traded at a $6.59 premium to October WTI.
Futures for September delivery lost 1.9% to 503.6 yuan a barrel on the Shanghai International Energy Exchange. The contract rose 0.7% on Tuesday.
The US imposed 25% tariffs on $34 billion of Chinese products in early July, and the review period on another $16 billion of imports ends Wednesday. Trump had threatened an additional $200 billion with levies of 10 percent, a level the administration may raise to 25% in a Federal Register notice in coming days, one of the people said.
At the same time, representatives of US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they look for ways to re-engage in negotiations in a bid to avert a full-fledged trade war, two people familiar with the effort said. Talks to resolve the dispute had been stalled for weeks, with both sides refusing to budge.
American crude stockpiles probably declined by 3 million barrels last week, according to the median estimate of analysts surveyed by Bloomberg, with all but one expecting a drop. If confirmed by the Energy Information Administration’s data later in the day, it would be the third decline in four weeks. — Bloomberg

Infrastructure spending, capital outlays top target in first half

Government spending on infrastructure and other capital outlays breached its first-semester target due to roadworks, the Budget department said.
Budget Secretary Benjamin E. Diokno presented the government’s disbursement performance in the first half of the year in a media briefing on Tuesday, August 1, with infrastructure and other capital outlays reaching P352.7 billion, 41.6% higher than the P249.1 billion recorded in the same period in 2017.
It was 4.3% above the P338.3-billion target set for that period.
“This is attributed to infrastructure projects of various agencies, especially the road infrastructure projects of the of the Department of Public Works and Highways (DPWH),” Mr. Diokno said.
In June alone, infrastructure and other capital outlays surged 23.8% to P71.9 billion from P51.9 billion in June 2017.
It also grew 23.8% from May’s P58.1 billion.
“Specific to June 2018, these projects include the construction, widening, upgrading and preventive maintenance of road networks under the DPWH, the repair and rehabilitation of classrooms and school facilities under the Department of Education and State Universities and Colleges, acquisition of hospital and medical equipment of the Department of Health, and rail transport projects and purchase of airport security equipment of the Department of Transportation,” said the Budget chief. — Elijah Joseph C. Tubayan

Iceland wants foreigners to stop buying its land

A little over a century ago, a young woman named Sigridur Tomasdottir threatened to throw herself into the icy gorge of Iceland’s iconic Gullfoss waterfall in a bid to stop English businessmen from turning it into a hydroelectric dam.
In the end, the proto eco-warrior was able to hold on to her life — the leasing contract was canceled, allegedly because the money failed to turn up on time — and the Golden Falls are today one of the country’s biggest tourist attractions.
Iceland’s first environmentalist prime minister, Katrin Jakobsdottir, has now picked up Tomasdottir’s baton by railing against foreign investors who have been purchasing vast swathes of the north Atlantic island’s pristine wilderness.
The 42-year-old prime minister, who heads the Left-Green Movement, wants “further restrictions” on land ownership, but says she will first wait for studies currently being carried out at four different ministries. Their conclusions are expected by the end of the summer.
“First and foremost I want to defend the nation’s sovereignty,” Jakobsdottir said in a telephone interview in Reykjavik. “It matters to us that we can decide how the land is developed and utilized.”
As a member of the European Economic Area (a free trade zone linked with the European Union), the government has limited space for maneuver. Jakobsdottir says she’s seeking “restrictions based on the size and number” of plots owned. Iceland can already bloc purchases by non-Europeans, as it did in 2012, when it prevented Chinese billionaire Huang Nubo from snapping up a 300-square kilometer piece of land in the north.
Foreign Interest
Her government is responding to growing complaints from farmers, many of whom resent the superior purchasing power of foreigner buyers and also question their motives. Iceland only achieved full independence from Denmark in 1944, and patriotic feelings continue to run high. Jakobsdottir’s ruling coalition is reliant on the support of the conservative Independence Party and the Progressives, the party of choice for farmers.
British billionaire Sir Jim Ratcliffe and his associates own a total of 39 plots rich in fishing rivers, according to Icelandic newspaper Morgunbladid, while Sweden’s John Harald Orneberg and Switzerland’s Rudolf Lamprecht are two other fishing enthusiasts with deep pockets who have bought land on the north Atlantic island, according to local media reports.
Ratcliffe has said his main interest is in the local salmon population and that any tightening of the rules may prompt him to reconsider his future plans. “No one wants to be operating against the will of the authorities in a country,” said his spokesman in Iceland, Gisli Asgeirsson.
One of Ratcliffe’s Icelandic neighbors, a farmer named Aevar Rafn Marinosson, remains unconvinced.
“They say they want to protect the salmon, but that’s not a very believable explanation,” he said. “You don‘t need to own land to protect the salmon.”
Though much of it is inhabitable, Iceland’s land is still cheap (prices range from around $500,000 to $5 million, depending on their size and the kind of resources they offer, and can get way higher if the plot hosts a famous tourist attraction). Aevar Dungal, a real estate agent based in the East Fjords, says that while 70 percent of his clients are Icelandic, foreign investors are snapping up the biggest and most expensive plots.
Jakobsdottir insists this is not about “banning foreigners,” but rather about “the concentration of ownership” (in Scotland, for example, less than 500 people reportedly own half of all private land) and about ensuring the land is put to its best use.
“I think general regulations that apply to both foreigners and Icelanders are likely to be more successful and more viable,” she said.
Sigurjon Sighvatsson, an Icelandic Hollywood producer who has been buying land for the past 20 years, says he doesn’t want to see rules that discriminate against non-residents.
“I’m not afraid of foreigners, I’m more afraid of Icelanders,” he said. “Many foreigners who’ve come here were ahead of their time when it comes to protecting the land.” — Bloomberg

Huawei passes Apple in smartphone market share for the first time

Huawei Technologies Co. pulled ahead of Apple Inc. to claim the No. 2 position in global smartphone shipments in the second quarter just behind Samsung Electronics Co., solidifying the rise of Chinese competitors.
Huawei shipped 54.2 million phones in the quarter, 41% more than a year earlier, to jump ahead of the iPhone maker for the first time, according to market research firm IDC. The telecoms giant accounted for 16% of the market, compared with 21% for South Korea’s Samsung and 12% for Apple. Xiaomi Corp. and Oppo, both based in China, rounded out the top five.
Chinese smartphone makers have been gaining influence as their domestic market grows and they expand abroad. Huawei has pushed into Europe and Africa, though it’s failed to crack the massive U.S. market. Apple tends to sell iPhones at higher prices than its rivals and profits from services like iTunes, which helped it top earnings estimates for the quarter.
Globally, the smartphone market continued its slowdown with shipments slipping 1.8 percent for the quarter to 342 million units. The number of smartphones shipped in 2017 fell 0.3%, according to IDC, the first decline after years of strong growth. — Bloomberg

Philippines’ July manufacturing growth slowest in five months

Manufacturing activity in the Philippines decelerated further in July, reaching the lowest reading in five months, as demand softens, according to an IHS Markit survey conducted for Nikkei.
The seasonally adjusted Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) slid for the second consecutive month to 50.9 in July, from 52.9 logged in June, which indicated a “marginal improvement in the health of the sector.”
The country moved up to the second rank among select Association of Southeast Asian Nations (ASEAN) last month, behind Vietnam’s 54.9, from placing third in June–but still above the ASEAN average of 50.4.
“The Philippines manufacturing economy expanded further at the start of the second half of 2018, but at a weaker pace. Growth in both output and new orders slowed noticeably in July accompanied by a milder accumulation in input stocks,” the report read.
The report noted that new business intakes grew at the weakest pace in survey history despite export growth reaching a 19-month high, as it pointed to supposed input shortages amid high prices of raw materials.
“Slower sales led firms to scale back their production volumes. Output growth reached a six-month low. That said, there was anecdotal evidence that input shortages disrupted production activity,” it said.
“Inflationary pressures in the sector remained marked. Higher prices for raw materials, such as diesel, plastics and rice, a weaker peso and effects of the TRAIN regulations all contributed to input cost inflation, which remained well above that seen in recent years,” it added, referring to the Tax Reform for Acceleration and Inclusion law.
“Greater cost burdens led firms to raise selling prices further in July.”
The sustained inflationary pressure in July led business expectations to fall to its lowest level to date.
The Bangko Sentral ng Pilipinas made a 5.1-5.8% inflation forecast for July, which would come from a 5.2% print in the previous month. — Elijah Joseph C. Tubayan

Max’s merges two units

Max’s Group, Inc. (MGI) is merging two of its subsidiaries in line with its goal to maximize operational synergies across its businesses.
In a disclosure to the stock exchange on Wednesday, August 1, MGI said the Securities and Exchange Commission (SEC) has approved the merger of its wholly-owned units, The Real American Doughnut Company, Inc and Fresh Healthy Juice Boosters, Inc., with the former as the surviving entity.
“The resulting transaction is aligned with on-going reorganization initiatives to maximize operational synergies across the business and does not adversely impact existing shareholders,” the company said. — Arra B. Francia

Century Pacific’s second-quarter profit up by 9%

Century Pacific Food, Inc. (CNPF) delivered a nine percent increase in earnings for the second quarter of 2018, driven by the double-digit growth in branded revenues amid higher costs of raw materials.
In a regulatory filing, the listed canned goods manufacturer said net profit reached P838.9 million in the April to June period of 2018, higher than the P767.5 million it posted in the same period a year ago. Revenues for the quarter went up by 19% to P10.2 billion
This pushed the company’s topline performance 20% higher in the first six months of 2018 to P19.3 billion. Net income accordingly rose seven percent to P1.57 billion.
“We saw branded sales surge during the first half, as we hit records in terms of volumes sold and distribution outlets reached. We believe local macroeconomic factors have favored demand for our products, which have wide appeal and reach a broad consumer base,” CNPF Chief Finance Officer Oscar Pobre said in a statement. — Arra B. Francia

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