Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 11403

Total Solar expands in Philippines with Gaisano deal

A UNIT of French oil company Total S.A. has secured contracts to install solar energy systems on the rooftop of four Gaisano malls in Luzon and the Visayas with a total capacity of 1.66 megawatts (MW).
In a statement, the subsidiary Total Solar SEA said it had locked in contracts with Gaisano Capital, the entity behind the malls, for its first project in the Philippines.
Total Solar said the installation can generate around 2,257.3 MW-hour in a year. The malls in Binangonan, Calapan, Masbate and San Carlos will have an installed capacity of 536 kilowatts peak (kWp), 268 kWp, 375.2 kWp, and 482.4 kWp, respectively.
The project is expected to help Gaisano Capital cut its carbon dioxide emissions by 1.25 million tons and reduce its expenses.
“Construction of the facilities will begin in November and will be online early 2019,” Total Solar said.
The solar energy developer said it complies with the highest environmental, health, and safety requirements. It said the facilities will use only Tier 1 components and work with the most experienced local contractors in the solar photovoltaic (PV) industry.
Total Solar develops, owns and maintains solar PV rooftop and behind-the-meter facilities that are contracted either through a power purchase agreement or lease agreement, depending on a country’s legal environment.
The company said it is one with Total (Philippines) Corp. “in its commitment to becoming the responsible energy major, catering to the energy needs of the country and its communities.”
Total Philippines is the local subsidiary of Total S.A. and is engaged in the marketing of fuels, lubricants and special fluids. It operates a network of more than 420 service stations in Luzon and the Visayas.
Through Total Solar, the French oil firm as an integrated operator is present across the photovoltaic solar value chain, including cell manufacturing and solar power storage to electricity sales.
Total S.A. said it has been committed to advancing solar energy for more than 30 years. The company also develops and operates large solar sites and decentralized systems at homes, plants and offices. — Victor V. Saulon

Paris auction house ‘would love it’ if Banksy pulls another stunt


PARIS — The first auction house to sell prints by Banksy since THAT auction two weeks ago does not anticipate another stunt like the one that shredded half a picture moments after the hammer fell. But, hey, if something were to happen? Great!
“Are we expecting it? Not really. Perhaps we are hoping for it,” said auctioneer Arnaud Oliveux of Artcurial auction house in Paris, which is selling three Banksy prints on Oct. 24. “I would love it if something happens.”
The British artist has done more to cultivate his mystique in the two weeks since a print of one of his best known works, Girl With a Balloon, slid half way through a shredder embedded in its frame moments after it was sold at Sotheby’s in London.
Banksy released a new video that suggested the partial-destruction was a malfunction: it showed an identical print in the same frame being entirely shredded, with the caption “in rehearsals it worked every time.”
Oliveux said if Banksy was planning another stunt for the next auction, it probably wouldn’t involve a secret shredder.
“Banksy never repeats himself. Here, you see the frame, there’s nothing at all hidden in the structure. But perhaps we could imagine a different stunt.”
The auction house said it cannot predict how high the bidding will go for its three prints, but it expects the extra attention from Banksy’s last stunt will have an impact on prices. All the seats are taken at the auction and the international media are showing up.
Bidding on a print of Stop and Search, depicting Dorothy from The Wizard of Oz being searched by a policeman, starts at just €30,000 ($35,000), a bargain compared to the million pounds Girl With a Balloon fetched moments before it self-destructed. — Reuters

MRP to proceed with tender offer

MELCO Resorts and Entertainment (Philippines) Corp. (MRP) will proceed with its tender offer at the end of October, but will keep its offer price at P7.25 apiece.
The listed operator of the City of Dreams Manila said in a disclosure on Tuesday that the tender offer by its majority shareholder, MCO (Philippines) Investments Limited, will start on Oct. 31. The tender offer will run for a total of 20 business days.
MCO Investments aims to buy back up to 1.57 billion common shares in MRP from the public, in a bid to increase its shareholdings in the company. It currently holds 72.54% of the outstanding MRP shares.
“The Bidder believes the Tender Offer gives existing shareholders of MRP the opportunity to sell their MRP Shares, in cash, at a premium to the current trading price of the MRP Shares,” the company said.
The tender offer price represents around a 14% premium over MRP shares’ three-month volume weighted average price as of Sept. 7, the last trading day before the company announced its voluntary delisting plan.
The offer price is also 2.4% higher than MRP’s closing price of P7.08 each on Tuesday. This is 0.98% or seven centavos lower from the previous session’s close.
“On the other hand, the Tender Offer would also allow the Bidder to increase and consolidate its interests in MRP to better support and facilitate MRP’s future business plans,” MRP added.
The company reiterated that the tender offer will no longer be part of its plan to apply for voluntary delisting at the Philippine Stock Exchange, following complaints from a number of investors on the pricing and other investment decisions.
“The change of purpose for the Tender Offer, which led to the withdrawal of the petition to delist by MRP on Oct. 19 is aimed at alleviating certain investors’ concerns that the potential delisting may exert undue pressure on their decision process related to the acceptance of the Tender Offer,” MRP said.
The company explained that shareholders should not be pressured into accepting the tender offer, given that it has withdrawn its petition for voluntary delisting at the PSE last week.
“Investors are therefore assured that they are free to conduct their evaluations and arrive at a decision whether to tender their shares at their absolute discretions,” the company said.
It also noted that investors who do not agree with MRP’s tender offer price are not obligated to participate in the offer.
Amid the change in purpose for the conduct of the tender offer, analysts pointed out that this could indicate a shift in MRP’s strategy to exit the bourse. Should investors participate in the tender offer, this could bring down MRP’s public float to less than 10% from the current 27.05%, making it eligible for involuntary delisting procedures. — Arra B. Francia

A pity to throw it away: insurer stores damaged art in Germany


COLOGNE — What happens to artworks which are too badly damaged to be restored once the insurer has paid out the claim?
Up to 300 of them — scratched, torn or punctured works by well-known artists including Gerhard Richter, Christo and Giorgio de Chirico — are stored in an AXA warehouse near the western German city of Cologne.
One of the world’s biggest art insurers, AXA receives claims every year for damage to paintings, sculptures, and drawings. Some 80% of them can be restored.
The rest, which either cannot be or are to expensive to be repaired come to this warehouse.
“We store artworks, objects and collectors items by notable artists for which we have compensated our customers, we take ownership of them and keep them for the future,” said Kai Kuklinski, head of AXA Art Insurance.
“The main goal is to keep this art as it is too much of a pity to throw it away,” he said.
AXA gives some pieces, which include paintings, collectors items, and antiquities, to research projects. Some are auctioned for charity and others kept, in case they can be repaired later, once restoration techniques have improved.
“Otherwise, we keep things for many many years, up to decades, in our warehouse,” said Kuklinksi.
Works in the Cologne warehouse include a damaged offset print of Christo’s Wrapped Reichstag.
Another is Black Red Gold, a painting by Gerhard Richter which was damaged because of the way it was hung.
One of the most unusual items is a painting by Giorgio de Chirico which was almost destroyed when a wrecking ball from next door ripped through it as it hung on the wall of a house. — Reuters

SEC to release sustainability reporting rules before yearend

By Arra B. Francia, Reporter
THE country’s bourse operator and corporate regulator are placing the spotlight on sustainability reporting for listed firms, recognizing the need to disclose non-financial information to better aid the public in making investment decisions.
The Securities and Exchange Commission (SEC) on Tuesday said it plans to release the guidelines for sustainability reporting and the template for publicly listed companies by the end of the year. The initial draft was released for public comment last July.
The SEC described sustainability reporting, otherwise known as environmental, social, and governance (ESG) reporting, as an “organization’s practice of reporting publicly on its significant economic, environmental and/or social impacts, in accordance with globally accepted standards.”
The guidelines will require companies to disclose information related to their resource management, ecosystem and biodiversity, environmental impacts, employee management, and supply chain management, among others.
SEC Chairperson Emilio B. Aquino said this will guide investors in choosing which companies to invest in.
“Small investors can be able to invest in very good companies, not only in terms of returns, but also sustainability advocacy,” Mr. Aquino told reporters on the sidelines of the 5th SEC-PSE Corporate Governance Forum at the Philippine International Convention Center.
The Philippine Stock Exchange (PSE) welcomed this move, while also highlighting its efforts to encourage sustainability reporting among listed firms.
“Sustainability reporting guidelines is an important milestone for the capital market. It will assist in the realization of our collective goal of creating platforms for disclosure of non-financial information that will enable stockholders to have access to a company’s ESG performance thereby enabling them to make better investment decisions,” PSE President and Chief Executive Officer Ramon S. Monzon said in a speech during the forum.
Mr. Monzon said the exchange is studying the possibility of requiring ESG reporting as part of its listing rules.
PSE Chief Operating Officer Roel A. Refran said they target to implement this by 2019, as they are currently building up awareness for sustainability practices.
“(This) should be implemented by 2019. We’re doing now the dialogue with asset managers, we’re seeing how we can rationalize these indices. This is very relevant as we look at sectors, at certain considerations,” Mr. Refran told reporters on the sidelines of the forum.
Part of the PSE’s initiatives is also its application to be a member of the Sustainable Stock Exchanges (SSE) initiative established by the United Nations in 2009. The group currently has 75 members, five of which are part of the Association of Southeast Asian Nations.
“The SSE initiative is a peer-to-peer learning platform, for exploring how exchanges in collaboration with investors, regulators, and companies can promote responsible investment for sustainable development… PSE aims to learn from the experiences of our partner exchanges in the region,” Mr. Monzon said.
In the near future, Mr. Monzon said they are also aspiring to create a sustainability related index once ESG reporting in the country has improved.
“We have to prepare the ground work for the establishment of a sustainability-related index some time in the near future…The Philippine market is expected to improve its governance rules to promote transparency and disclosure of ESG factors, which in turn will hopefully result to thematic indices in line with ESG standards,” Mr. Monzon said.

Trumperte: comedy is political


MELANIA and Donald Trump will be visiting the Philippines on Oct. 26 and 27.
Well, this is partly fake news, because the catch is that actor Jon Santos will be impersonating them — and many more.
A timely comedic piece, Trumperte, written and acted by Mr. Santos, promises to be a two-day laugh fest.
The performances will be at the PETA Theater in Quezon City.
Mr. Santos will parody political personalities from here and abroad including Mocha Uson and President Rodrigo Duterte, alongside the iconic personalities whom Mr. Santos has been impersonating all these years like actress-politician Vilma Santos and former First Lady and shoe collector Imelda Marcos.
During the preview on Oct. 8, Mr. Santos declared that he is an “equal-opportunity offender.” He said, “I’ve been Erap in front of Erap, I’ve been GMA in front of GMA, I’ve been Kris in front of Kris [Aquino],” adding that there’s definitely tension when he and his subjects are in the same room, but he’s glad that the subjects of his jokes understand the nature of his shows.
Mr. Santos added that the coming senatorial elections in 2019 gave him opportunity to develop new material. He said parts of Trumperte will include jokes about some of the “senatoriables.”
Trumperte is part of PETA’s “Stage of the Nation” season where the lineup of performances are all shows that reflect current politics.
“Napaka-encouraging that we all laugh at the same places. There’s hope na alam pa rin ang tama at mali (there is hope that people still know right and wrong). Nakaka-encourage na people support live comedy as a form of healing. They dress up, they buy tickets, and they brave the traffic to bond with kindred spirits,” said Mr. Santos during “PETA’s… Stage of the Nation” launch on Sept. 21. (READ: “PETA’s State of the Nation”)
Mr. Santos co-wrote Trumperte together with Enrico Santos and Joel Mercado, while Michael Williams will direct the show.
“My lookout is just the front. Kasi voice niya (Santos) ’yung material, eh ’di ko naman siya pwede diktahan ng joke (Because his material is his voice, I cannot dictate his jokes),” said Mr. Williams of his role as the show’s director.
Trumperte tickets are currently on sale at TicketWorld. — Nickky Faustine P. de Guzman

Gov’t rejects all bids for reissued seven-year bonds as yields go up

By Karl Angelo N. Vidal, Reporter
THE GOVERNMENT rejected all bids for the reissued seven-year Treasury bonds (T-bonds) it offered on Tuesday as bids came in higher than expected amid increased demand due to maturing state debt.
The Treasury did not accept any tenders for its P15-billion offer of reissued seven-year bonds with a remaining life of six years and five months yesterday.
This, even as total offers placed by banks and other financial institutions amounted to P24.456 billion, well above the amount the Treasury intended to borrow.
Had the government proceeded with a full award, the debt papers, which carry a 5.75% coupon, could have fetched an average rate of 8.284%, 119.9 basis points higher than the 7.085% average fetched when the papers were last sold in September.
At the secondary market, prior to the auction, the debt notes were quoted at 7.5546%.
At the close of the trading yesterday, the seven-year securities rallied to fetch a lower yield of 7.9482%.
Deputy Treasurer Erwin D. Sta. Ana said the government opted to reject all bids for the seven-year papers as offers from investors were “unreasonably” high.
“We looked at the last time we issued this security as well as the [five-year bonds]. There is really a huge pickup from the last auction rates, so the committee decided to reject at this time,” Mr. Sta. Ana told reporters following the auction on Tuesday.
He added that demand from banks and other financial institutions rose as the Treasury is paying P11 billion worth of maturing debt this week, adding liquidity to the market.
“Possible, dealers are actually looking for ways to invest those P11 billion.”
Mr. Sta. Ana noted that going back to government debt “is already an interesting proposition” for investors given the rising interest rates.
Meanwhile, a bond trader said offers placed by investors were higher than the expected 8-8.25% range.
“Market players are playing defensive amid lack of firm leads in the market,” the trader said in a phone interview.
“Investors prefer placing their funds in the shorter-tenor [securities] such as the three-year [bonds] and Treasury bills (T-bills) rather than the longer-term papers such as this one.”
To compensate for the previous rejections the Treasury has made, the official said the Bureau of the Treasury is looking at other fund-raising options such as offshore offerings, retail bonds, as well as floating-rate notes.
A floating-rate note, or floater, is a debt instrument that carries a varying interest rate, depending on a benchmark. However, floaters yield lower returns compared with fixed-rate papers of the same maturity date.
“The floaters would really benefit the banks more because that would actually give them some protection with respect to rises and changes in interest rates because the benchmark has a reset so that would serve as a protection for them,” Mr. Sta. Ana explained.
The Treasury is raising P270 billion from the domestic market this quarter through auctions of securities, offering P180 billion in T-bills and another P90 billion in T-bonds.
The government plans to borrow P888.23 billion this year from local and foreign sources to fund its budget deficit, which is capped at 3% of the country’s gross domestic product.

Imported auto sales slip 18% in Q3 — AVID

Manila International Auto Show (MIAS)
MANILA INTERNATIONAL AUTO SHOW FACEBOOK PAGE

SALES of imported vehicles in the third quarter dropped by nearly a fifth from a year ago, weighed by soaring fuel prices, high inflation and interest rate hikes, according to the Association of Vehicle Importers and Distributors, Inc. (AVID).
In a report released on Tuesday, AVID said imported car sales slid 18% to 22,774 units during the July to September period, versus 27,605 units sold during the same period in 2017.
This brought the nine-month sales tally to 65,917 units, 13% lower than the 75,949 units sold in the comparable period last year.
“Amidst the headwinds, AVID retained its rosy outlook that its wave of new product launches and customer-focused service offerings will augur well for the automotive industry,” AVID President Ma. Fe Perez-Agudo said in a statement.
AVID is the auto industry association whose members import their products and do not assemble in the Philippines.
Light commercial vehicles (LCV) accounted for the bulk of sales during the third quarter, with 15,279 units sold, 11% lower year-on-year.
For the nine-month period, LCV sales fell 10% to 41,808 units against 46,683 units sold a year ago. Ford Philippines sold 17,600 units for the first nine months, making it the best-selling brand for the segment.
Sales of passenger cars continued to slump, with a 30% drop in the third quarter to 7,350 units.
Passenger car sales fell 20% to 23,531 units from January to September. Hyundai Asia Resources, Inc. (HARI), distributor of Hyundai Motor vehicles in the country, led the segment with 15,359 units sold in the nine-month period.
AVID attributed the weak vehicle sales to the continued “high inflation, interest rate hikes and surge in oil prices.”
AVID members include car brands at all price points as well as commercial vehicle distributors, and its results reflect the strength of the market for economy and high-end vehicles as well as trucks, which are considered investment goods for business buyers. — Janina C. Lim

PBoC to inject 10 billion yuan to help private debt sales

CHINA’S central bank plans to give 10 billion yuan ($1.4 billion) to China Bond Insurance Co. to provide credit support for debt sales by private enterprises, according to people familiar with the situation.
The money is part of the plan the People’s Bank of China (PBoC) announced late on Monday to support private firms issuing debt.
The central bank didn’t provide any details on how the plan would work, its size, or when it would begin. Officials also hadn’t responded to multiple requests for comment.
China’s announcements on Monday of fresh measures to ease the funding strains of private companies came after top officials commented repeatedly in an attempt to restore confidence in the world’s second-largest economy. The central bank reiterated President Xi Jinping’s vows to offer “unwavering” support for the private sector, which has been most affected by the government’s campaign to curb debt and cut shadow banking.
The collapse of stock prices has also hit non-state-owned companies hard, as has the slowdown in economic growth.
It’s not clear how China Bond Insurance will provide credit support for issuers with the money, and the company declined to comment when contacted. It provides guarantees for notes sold by small- and medium-sized companies, and also provides insurance for bonds sold by such issuers, similar to credit default swaps.
Companies that guarantee bonds sold in China are able to provide assurances of up to 10 times their current net assets, or 15 times for guarantee companies that mainly serve small and rural borrowers, according to a 2017 rule from the State Council.
HELP AVOID DEFAULTS
The new bond support tool isn’t just a central bank policy, but an urgent, national-level policy, according to Iris Pang, Greater China economist with ING Groep NV in Hong Kong, commenting on the PBoC’s Monday announcement. “More and more companies are going to have payment difficulties on their existing bonds or existing loans,” and the new policy “should help avoid systemic default risk in China,” she said.
There should be some pilot cases within the next month or so, according to Ms. Pang.
The central bank will grant initial funding to financial institutions to offer credit-risk mitigation tools and other credit enhancements that help companies in the private sector sell bonds, according to the bank’s statement.
RELENDING EXPANSION
In a separate statement on Monday, the central bank also announced a 150 billion yuan ($22-billion) increase in its re-lending and re-discounting quota. These are tools that allow the central bank to supply financial institutions with money to lend. The quota was also raised by 150 billion yuan in June.
That should be a lifeline for small- and medium-sized enterprises, Ms. Pang said. “For the SMEs, they are more likely to be exporters, so they are hurt more directly by the trade war.”
These measures are a follow-up to the confidence-boosting comments from policy makers last week, and are trying to show they are making good on their promises of supporting the private sector, said Yao Wei, chief China economist at Societe Generale SA in Paris. “If the efforts are sustained, they will certainly be positive to everyone’s confidence in long-term reforms, even though they may not lead to a quick, short-term growth rebound.”
China’s central bank will initially provide funds to professional agencies for them to support bond issuance by private companies, the State Council said after a meeting led by Premier Li Keqiang on Monday. The PBoC will focus its support on companies “suffering temporary difficulties but which have market share, prospects and technological competitiveness,” it said in the statement on its website. — Bloomberg

Simple story, classic music in All Out of Love


By Nickky F. P. de Guzman, Reporter
Theater Review
All Out of Love
Presented by Full House
Theater Co.
Ongoing until Oct. 28
Newport Performing Arts Theater
Resorts World Manila
WHAT DO Lady Gaga and Bradley Cooper’s A Star is Born and Resorts World Manila’s All Out of Love have in common? Besides their good music, both show the perils of the entertainment industry.
The former illustrates the effects of substance abuse on one’s music career, while the latter, well, shows another kind of addicting drug: love — and how it can derail you or keep you on your musical trip.
But the bigger picture is that the music industry creates artists who are not allowed to live a life outside the limelight. As musical products, the musicians are used by their labels and managers in the pursuit of bigger profits while setting aside the artists’ personal lives and feelings.

In All Out of Love, this is well represented when superstar artist Jamie Crimson (a perfectly cast Mig Ayesa in full rockstar mode) breaks down in the middle of his big concert tour launch when he sees the love of his life, Rayne (Rachel Alejandro, as the jaded Southern singer, voice still glorious) among the crowd although she was just a figment of his fevered imagination. The concert has to stop after just one song he threatens to quit the tour. Naturally, record label honcho Tommy King (the full-throated Raymund Concepcion) is mad at his biggest profit-maker and his decision to throw away his career.
This is followed by recollections of Jamie and Rayne’s simple life back when they were creating music together. Rayne is also a singer, but she sings in the streets of 1980’s New York ghetto and doesn’t have the superstar status of her ex-lover.
The 1980s vibe of the simple set is aided by the use of street signs, bright lights, and graffiti. Robert Brunton did the set and was also the LED designer, while Trudy Dalgleish did the era-appropriate lighting design.
The rest of the show followed Jamie’s quest to win back Rayne with the help of Stacie King (ably played by Tanya Manalang, whose comedic talents match her bell-like voice).
Yes, King, as in record mogul Tommy King’s daughter. The young Harvard grad is an idealistic, always positive heroine who gives Jamie unsolicited life and love advice in her quest to get him back into the company’s fold and prove to her unbelieving dad that she belongs in the family business. While Stacie helps Jamie pursue Rayne because she believes in their love story, one can question if she’s only doing it because she’s a hopeless romantic or because she sees the opportunity that the Rayne-Jamie musical tandem will bring to the family business.
A sidebar to the romantic pursuit is the equally unrelenting pursuit of the Kings’ music rival Kurt Swinghammer (the appropriately slimey Jamie Wilson) of their record label.
Enveloping the entire narrative are the classic songs of Air Supply.
Act I included “All Out of Love,” “Every Woman in the World,“ “Lonely is the Night,” and “Here I Am,” while Act II has “Keeping the Love Alive,” “Now and Forever,” and “Even the Nights are Better.” There were little or no revisions at all in the songs, which, while mostly sung in their entirety, were seamlessly sewn into the scenes by Stephen Amos who did the musical supervising, arrangements, and orchestrations.
But it is the singers — Ayesa, Alejandro, Concepcion, and Manalang, along with a very enthusiastic ensemble — who bring the music to life. If there is one thing a Filipino singer can do is really wring the emotion out of a romantic song.
Unlike A Star is Born, all is well that ends well between the Rayne and Jamie, and, cheesy as it may seem, “now there’s two less lonely people in the world tonight.”
All Out of Love runs until Oct. 28 at Resorts World Manila.

Mazars bullish on PHL business

THE local unit of the Paris-based Mazars Group expects a triple-digit annual growth until 2020, as global businesses are keen on expanding their presence in Asia Pacific.
“We’ve been nearing double [digit] growth since we joined Mazars. In the next two years, it will be like a triple [digit] growth for us,” said Jacquie Yu-Villar, managing partner at both Mazars Philippines and its local partner Yu Villar Tadeja & Co., during a media briefing in Makati City on Tuesday.
Mazars is an international, integrated and independent organization that offers audit, accountancy and tax advisory services. By the end of the year, the company will be operating in 88 countries through nearly 1,000 partners.
Mazars Philippines said about half of its current revenue performance is driven by global and regional clients such as the Ingenico Group, FOSECO, Regus, Parexel, Delfingen Industry, Agoda and First Solar.
Majority of the clients are also in the services sector, Ms. Yu-Villar said. She noted that global companies put up support services here due to the cheap labor cost, and skills of employees.
She expects the revenues that Mazars Philippines generates from global firms to increase by half in the next few years.
“We’re opening doors to the global clients of Mazars so most of the businesses that we have here are tax advisory for these foreign clients to have a feel of our tax environment, the business environment before they enter,” Ms. Yu-Villar said.
At the same time, the company is also focusing on getting local clients.
“We’re improving our presence here as well. We also want to cater much on the local entities,” she added.
Rob Hurenkamp, board member of Mazars’ Asia & Pacific Regional Committee, said the Philippines, along with other countries in the region, are “seeing an increasing movement of companies that expand globally.”
With this trend, Mr. Hurenkamp forecasts the firm’s Asia and Pacific business to grow 15% year-on-year in revenues.
In 2017, Asia Pacific accounted for 13.5% of Mazars’ global revenues, while Europe contributed 65.5%.
Mazars is currently present in 16 countries in the region with the ability to service three others, namely New Zealand, Kazakhstan and New Celadonia, via correspondent-partners.
“In general, Asia is a very attractive market for many companies to have a kind of a presence,” Philippe Castagnac, chairman of Mazars, said.
“I think Mazars cannot achieve what it wants to achieve in its global network without key countries. And so, Philippines in Asia is one of the countries that is very significant. And that is why we absolutely needed not only presence but presence of substance in the Philippines,” Mr. Castagnac added. — Janina C. Lim

Drive to create Korean Goldman leads to first offshore bond

MIRAE ASSET Daewoo Co. is planning what would be the first-ever offshore bond by a South Korean brokerage amid a push by authorities to make local securities firms more competitive on the international stage.
Korea’s biggest brokerage by assets is meeting investors in Asia and Europe this week for the debt sale, according to a person familiar with the matter. It’s becoming more active overseas, taking part in a $150-million bridge loan to a Las Vegas resort recently and investing $300 million in April to fund a group’s purchase of a Hong Kong skyscraper owned by Li Ka-shing.
The Korean government started saying in the early 2010’s that it wants to create what it calls a “Goldman Sachs of Korea,” and it’s encouraging brokerages to expand their global clout, as a crowded securities industry at home weighs on profits. Those efforts have led to rapid growth among the largest brokerages, helping spark a 52.1% increase in the sector’s combined assets in the past five years to 411 trillion won ($362 billion), a faster pace of gains than the banking and insurance industries.
“Given the very high level of competition in the domestic market, Korean securities firms are interested in expanding overseas, which would lead to demand for offshore funding,” said Tae Jong Ok, a financial institutions analyst at Moody’s Investors Service. “Mirae Asset is the most advanced in overseas expansion among Korean securities firms.”
Mirae Asset Daewoo needs foreign-currency financing for investment as its overseas business grows, according to a company spokesman.
Its rising investments include the bridge loan it provided with Korea’s NH Investment & Securities Co. to the resort and casino called The Drew Las Vegas. Mirae also agreed to jointly buy a London office from Blackstone Group LP in March with NH Investment.
Expanding overseas increases Mirae’s operational risks as it does more business in unfamiliar markets with different regulations and compliance requirements, said Mr. Ok at Moody’s. But diversifying its assets and earnings across different markets and lowering its dependence on Korea is a positive factor, he said.
Another of the biggest brokerages from the country, Korea Investment & Securities Co., is moving to expand in Hong Kong. It said on Friday that it will inject $400 million into a Hong Kong unit to do so.
By expanding overseas, Korean brokerages may also be able to help domestic investors and companies invest abroad, Moody’s Mr. Ok said.
Korean companies in other industries have found strong demand for their offshore debt as investors look for high-grade bonds amid emerging-market jitters, and as military tensions with North Korea fade.
Kookmin Bank and Doosan Power Systems SA are among firms that sold dollar debt recently, helping push up offshore bond sales by Korean issuers including the government to $30 billion so far this year, the most for the period since 2012, according to Bloomberg-compiled data. — Bloomberg

1...11,40211,40311,404...13,845Page 11,403 of 13,845
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube