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Games from Satka

71st Russian Championship
SuperFinals, Satka, Russia
August 24-September 6, 2018

Final Standings
1-2. Dmitry Andreikin 2710, Dmitry Jakovenko 2748, 7.0/11
3. Evgeny Tomashevsky 2702, 6.5/11
4-6. Ernesto Inarkiev 2690, Vladimir Fedoseev 2707, Ian Nepomniachtchi 2768, 6.0/11
7. Grigoriy Oparin 2609, 5.5/11
8-9. Alexey Sarana 2613, Daniil Dubov 2691, 5.0/11
10-11. Mikhail Kobalia 2619, Nikita Vitiugov 2730, 4.5/11
12. Denis Khismatullin 2634, 3.0/11
Average ELO 2685 Category 18
Time Control: 90 minutes for the first 40 moves then another 30 minutes for the rest of the game with 30 seconds added to your clock after every move starting move 1.
The two Dmitry’s tied for first in the Russian Superfinals; there was a play-off the Grand Master (GM) Andreikin won the title of Russian Champion and a new car which went with it, a Renault Kaptur — roughly, it looks like the new Toyota Rush. This is his second time — in 2012 Andreikin figured in a gigantic six-way tie for first in the SuperFinals with Sergey Karjakin, Peter Svidler, Jakovenko, Evgeny Alekseev and Vladimir Potkin and he won the subsequent play-off. This was the beginning of Andreikin’s reputation of “nerves of steel.”
Dmitry Jakovenko (born June 29, 1983) had to content himself with the silver medal but at least this is an affirmation of his current good form — last November he shared first place with Levon Aronian in the Palma de Majorca leg of the FIDE Grand Prix and then in June 2018 he won the 2018 edition of the Karpov Poikovsky super GM tournament. Also, just last month he was named to the Russian national team to the 2018 Batumi Olympiad.
I think though that although Daniil Dubov finished in 9th place out of 12 he did a lot to advance his reputation. In his younger days Dubov was coached by GM Sergey Dolmatov, one of the top students of the famous Soviet/Russian chess trainer and coach Mark Dvoretsky. Dolmatov had cut off working with Dubov because the student was “unpromising.”
GM Sergey Shipov then took over. At that time Dubov had a solid and strategic style but his new coach sharpened it up and successes followed: the grandmaster title at 14, he won the Russian Higher League in 2012 at 16 (this is the qualifier for the Russian SuperFinals. In 2013 he knocked out former world champion and KO Tournament specialist Ruslan Ponomariov from the World Cup in their 2nd round match which went all the way from two classical games, two rapid games, four blitz games up to Armageddon. That one was really impressive.
The following game is nowadays typical of Dubov’s style — good opening preparation and once he gets a grip he is merciless.

Inarkiev, Ernesto (2690) — Dubov, Daniil (2691) [E61]
RUS-Ch SuperFinals Satka RUS (3), 27.08.2018

1.d4 Nf6 2.Nf3 g6 3.c4 Bg7 4.e3
This system with 4.e3 and 5.Be2 has become popular of late. One of the ideas behind it is that the usual 4.Nc3 can be met by 4…d5 5.cxd5 Nxd5 6.e4 Nxc3 7.bxc3 c5. In the Anti-Gruenfeld we see in this game White’s knight is not on c3, so if Black now plays 4…d5 then 5.cxd5 Nxd5 6.e4 and the black knight cannot exchange itself off and has to retreat.
4…0–0 5.Be2 c5
Black can either go for a King’s Indian formation with 5…d6 followed by 6…Nbd7 and 7…e5 or he can play as Dubov does here and transpose to the Modern Benoni. In either case we get a fighting game.
6.d5 e6 7.Nc3 exd5 8.cxd5 d6 9.0–0 Bg4 10.h3 Bxf3 11.Bxf3 Nbd7 12.Qc2 a6 13.a4 c4
Aiming to put his knight on c5. The drawback of this move, of course, is that he might lose the pawn on c4. In fact, White immediately goes for it.
14.Be2 Rc8
Black can also play 14…Qc7 . After the game Dubov indicated that he preferred the text move as then his rook can go to c5.
15.a5 Rc5 16.Qa4 Re8 17.Rd1
[17.Bxc4? b5 18.axb6 Nxb6 Black wins a piece]
17…Ne4 18.Nxe4 Rxe4 19.Bd2 f5
Not 19…Bxb2 right away as 20.Rab1 Nf6 (the idea now is that 21.Rxb2? is refuted by 21…c3. However, White need not take the bishop right away) 21.Bf3! c3 22.Bxe4 Nxe4 23.Qxe4 c2 24.Re1 cxb1Q 25.Rxb1 Rb5 material is equal but Black’s pieces are awkwardly placed.
20.Qa3!
Best as 20.Bb4 is met by 20…c3! exploiting the pin along the 4th rank.
20…Rb5 21.Rab1 Rb3
Dubov’s play is like a symphony — each move flowing into the next and pushing back Black’s forces.
22.Qa2
[22.Qxd6? Be5 the white queen is in danger. It can only go to e6 and after 23.Qe6+ Kf8 Black will be winning White’s queen with …Nc5]
22…Nc5 23.f3 <D>
POSITION AFTER 23.F3
23…c3! 24.fxe4?
White probably figured that since he was going to fall under attack he might as well have some material for it. However, 24.bxc3 was forced. After 24…Rxb1 25.Qxb1 Re7 26.c4 Bh6 White is under pressure but he is still fighting.
24…cxd2 25.Bc4 Qg5!
Dubov gives away his b3 rook but has obviously calculated his attack to the end.
26.Bxb3 Qxe3+ 27.Kh1
Where else can the king go?
27.Kf1 Nxe4 and next move either …Ng3 or …Qf2, with mate in either case.
27.Kh2 Nxe4 28.Bc4 Be5+ 29.Kh1 Nf2+ 30.Kg1 Nxd1+ 31.Kh1 Qe1+ the end.
27…Nxe4
With …Be5 coming up.
28.Rf1 Be5 0–1
Inarkiev resigns with the devastating …Ng3+ staring him in the face.
Playing White in the next game is GM Denis Khismatullin. He is the long-time second of GM Dmitry Jakovenko but is a very strong player in his own right. Back in 2014 the UAE player Salem A.R. Saleh (I believe he was rated around 2550 at that time) was making a big push to compete on even terms with the chess elite and some sponsors organized an 8-game training match with Khismatullin. This was a demoralizing affair, for GM Saleh was wiped out by a score of 1-7. And the Emirati player is no slouch — later that year he won both the Asian Championship and the Asian Blitz. His current rating is 2660!
Here in the SuperFinals though Khismatullin was not in good form and finished last with 0 wins 6 draws and 5 losses.

Khismatullin, Denis (2634) — Dubov, Daniil (2691) [A48]
RUS-Ch SuperFinals Satka RUS (4), 28.08.2018

1.d4 Nf6 2.Nf3 g6 3.e3 Bg7 4.Be2 0–0 5.0–0 d6 6.b3 Nc6 7.Bb2 Bf5 8.c4 e5 9.dxe5 dxe5 10.Qc1
Now White realizes that his 9th move was a mistake. He cannot exchange queens because 10.Qxd8 Rfxd8 11.Nxe5 Ne4! 12.g4 (12.f4 Nd2 wins material for Black) 12…Bxg4 13.Bxg4 Nxe5 the vulnerability of his bishop on b2 is going to cost White 14.Be2 Nf3+ 15.Bxf3 Bxb2 16.Bxe4 Bxa1.
Nor can White take the e5–pawn now: 10.Nxe5 Qxd1 11.Rxd1 Ng4! 12.Bxg4 Bxg4 13.Rd5 (13.f3 Nxe5 14.fxg4 Nf3+) 13…Be6 14.Rc5 Rad8 15.Na3 Rd2 16.Bc3 Nxe5! 17.Bxd2 Nd3 both of white’s rooks are attacked.
10…Qe7 11.a3 Rad8 12.b4 Bg4 13.Ra2
On 13.h3 the Chessbase website notes that Dubov’s intention was to play 13…Bh5! On 14.g4 he planned further 14…Nxg4 15.hxg4 Bxg4 “with a tough-to-play position for White, while Black doesn’t risk anything.” (Dubov) For instance, 16.Nc3 e4 17.Nh2 Bh3 with the threat of Qg5+. 18.Kh1 Bxf1 19.Nxf1 Qh4+ 20.Kg1 Ne5 and Black has a big edge..
13…e4 14.Bxf6
Now you see why White played Ra2.
14…Qxf6 15.Nd4 Nxd4 16.Bxg4 h5! 17.Bd1
[17.exd4 hxg4 is no good for White. After 18.d5 Qe7 and then f7–f5 and possibly Kf7 with Rh8 and an attack along the h-line. (Dubov).
17…Nf3+! 18.Kh1
[18.gxf3 exf3 threatening …Qf6–g5+–g2 checkmate. It looks like White cannot save the game: 19.Kh1 (19.e4 Rd3! followed by …Qf6–h4–g4) 19…Qh4! 20.Rg1 (20.Bxf3 Be5 mate next) 20…Be5 21.Rg3 Bxg3 22.fxg3 Qxc4! with a triple threat on f1, c1 and a2]
18…Qh4 19.h3
[19.Bxf3 exf3 20.gxf3 Qh3 21.Nd2 h4 doesn’t save White either plus of course he didn’t want to mangle the kingside pawns]
19…f5 20.c5 Ng5 21.Qc4+ Kh7 22.f4
A trick. 22…exf3 is of course met by 23.Qxh4.
22…Nxh3! 23.gxh3 Rxd1! 24.Kg2
[24.Rxd1 Qxh3+ 25.Kg1 (25.Rh2 Qf3+) 25…Qg4+ snares the rook on d1]
24…Rd3 25.Re2 g5 0–1
After 25…g5 Khismatullin resigns as he had no wish to see 26…gxf4 27.Rxf4 Qg5+ 28.Kf1 Rxe3! unfold over the board.
GM Daniil Dubov was in the lead for the first half of the tournament but noticeably tired at the end and suffered several reverses. He should not worry about that too much though — he is only 22 years old — still a lot of tournaments for him to win in the future!
 
Bobby Ang is a founding member of the National Chess Federation of the Philippines (NCFP) and its first Executive Director. A Certified Public Accountant (CPA), he taught accounting in the University of Santo Tomas (UST) for 25 years and is currently Chief Audit Executive of the Equicom Group of Companies.
bobby@cpamd.net

One Last Dance

Dwyane Wade took just 17 seconds short of 10 minutes to get his point across in a video he uploaded for public consumption, but the title says it all. “One Last Dance …” Indeed. For a final run, he will be donning a jersey and going through the rigors of a grueling season, his 16th in the National Basketball Association. Just like most of his immediate past, he will be coming off the bench. And, again, he won’t be a freeloader; he will be on the floor in the closing stages of games, and often with the ball in his hands, deciding outcomes.
Truth to tell, the length of the YouTube clip isn’t the only indication of the internal struggle Wade had to, well, wade through before making a decision in his future. That it took him two and a half months since free agency began speaks even more volumes of the extent of his vacillation. And he came close to putting his sneakers to storage, proud of his body of work and looking forward to life away from hoops and with his family.
In the end, the call of competitiveness was too compelling to contravene. It helped, of course, that the Heat — who had Wade’s heart from the get-go save for brief flirtations with the Bulls and the Cavaliers — continued its courtship and sold him on his importance moving forward. It was what most mattered to him, with his $2.4-million salary merely gravy and ultimately immaterial. And it was definitely what most mattered to fans intent on giving him a proper sendoff.
Parenthetically, Wade’s 2018-19 campaign will be one long retirement ceremony. Everywhere he goes, he will be feted and praised for his accomplishments. And while he won’t always appreciate being fussed over, he cannot but acknowledge that it’s what he deserves. He’s a 12-time All-Star, a former Finals Most Valuable Player, and, for a while prior to the turn of the decade, the best of the best at the two spot. He will be sorely missed, which is why everybody and his mother will want to appreciate him while they can.
 
Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

Landslide victims were “illegally operating” in area, mining company says

“Subsequent warnings, and notices from the company for the small scale miners to vacate the area were met with resistance and outright refusal,” said Benguet Corp. in a disclosure filed on Monday. — PHILSTAR

By Anna Gabriela A. Mogato
MINING company Benguet Corp. said that the small-scale miners who were struck by the landslide in Barangay Ucab in Itogon, Benguet were illegally operating in its Antamok property.
In a disclosure to the Stock Market on Monday, Benguet Corp. said that its Antamok mines were “gradually encroached by small-scale miners” after the company suspended operations in the late 1990s to study new technologies for mining low-grade ores. The company said it had issued notices warning the small-scale miners that the areas they illegally operated in were considered unsafe by the Mines and Geosciences Bureau (MGB).
“Their unregulated mining activties are without permission of the company,” the disclosure stated. “Subsequent warnings, and notices from the company for the small scale miners to vacate the area were met with resistance and outright refusal.”
Following the recent landslide caused by Typhoon Ompong, Benguet Corp. had provided medical assistance as well as collaborated on rescue operations with the local government unit and MGB-Cordillera Administrative Region (CAR).
According to official reports, 43 bodies had been recovered from the landslide. One survivor was also found, with 30 others still missing.
As Ompong swept through the region, dozens of Ucab locals — mostly miners and their families — took shelter in a mining bunkhouse-turned chapel, Itogon Mayor Victorio Palangdan said in a phone interview with The Associated Press. When the rains reached their height, the mountainside collapsed on them, obliterating the structure.
On Monday, Environment Secretary Roy A. Cimatu had ordered all temporary permits of small-scale miners in CAR to be revoked as a preventive measure.
The Department of Environment and Natural Resources had been grappling with the issue of small-scale miners in Northern Luzon as the the Minahang Bayan, made possible by the Republic Act No. 7076, or the People’s Small-Scale Mining Act of 1991, is not covered by the moratorium on processing and approving new mining operations.
Mr. Cimatu last year also lamented that the small-scale miners had been breaching on the property of the Philippine Military Academy in Baguio city. The department has since been moving to fast track the passage of Minahang Bayan applications to improve the regulation of small-scale miners.

DENR halts all small-scale mining operations in CAR

Roy A. Cimatu DENR
In the wake of Typhoon Ompong, 33 miners have been reported dead, with 29 more reported missing. Environment Secretary Roy A. Cimatu has placed a cease-and-desist order among CAR-based, small-scale mining firms in response.

By Anna Gabriela A. Mogato
ENVIRONMENT Secretary Roy A. Cimatu on Monday said he had placed a cease and desist order against small-scale mining companies in the Cordillera Administrative Region (CAR).
During the Palace briefing, Mr. Cimatu said that he has revoked the temporary permits of small-scale mining companies in CAR which would be “effective immediately.” This comes after 33 miners died, with 29 more reported missing, in a landslide in Itogon, Benguet.
The landslide was caused by the onslaught of Typhoon Ompong, which affected an estimated 5.7 million people nationwide, according to Senior Presidential Advisor Francis N. Tolentino.
The Armed Forces of the Philippines and the Philippine National Police will be aiding the Department of Environment and Natural Resources in implementing the cease and desist orders, Mr. Cimatu added.
Presidential Spokersperson Harry L. Roque during the briefing said that the government “would want justice to be done to the victims.” — reports from Arjay L. Balinbin

AgriNurture strikes deal with Vietnamese rice trader

AgriNurture, Inc. is finalizing an agreement with state-owned Vietnamese rice trader Vinafood II to bring in up to two million metric tons of long grain rice per year. — SCREENSHOT FROM AGRINURTURE YOUTUBE ACCOUNT

By Anna Gabriela A. Mogato
LISTED firm AgriNurture, Inc. (ANI) has signed a memorandum of agreement with state-owned Vietnam Southern Food Corporation — Vinafood II to bring more rice into the country.
In a disclosure to the Stock Exchange on Monday, Vinafood II announced that it will exclusively supply ANI two million metric tons (MT) of long grain rice annually.
The Vietnamese government mandates that the state-owned firm export rice to other Southeast Asian countries to ensure food security.
The agreement will still be “finalized in accordance with applicable Philippine laws”, such as the impending Rice Tariffication Bill, which seeks to remove the quantitative restriction on rice entering the country in exchange for higher tariffs on the commodity.
This deal comes after ANI submitted an unsolicited bid to the National Food Authority (NFA) last March to help the state grains agency fill up its buffer stock. ANI earlier said that it plans to bring in two million MT of rice, having allotted $100 million for this project.
However, the company did not clarify in its disclosure if this meant that the NFA accepted its proposal, as ANI said last month that NFA has 60 days to decide.
Under the deal, rice imported by ANI will be stored in NFA’s warehouses for the agency’s use. Any remaining stocks that had not been sold will be given back to ANI.

Central bank opens FX hedging facility

THE BANGKO SENTRAL ng Pilipinas (BSP) has issued guidelines for a reopened facility allowing borrowers to hedge against foreign exchange (FX)-related risk.
The BSP said in a statement last weekend that bank clients with obligations of at least $50,000 can avail of the Currency Rate Risk Protection Program (CRPP), which is designed to temper uncertainties due to foreign exchange (FX) exposure.
The Monetary Board approved the rules for availing of the CRPP within a week after BSP Governor Nestor A. Espenilla, Jr. said the program would be revived to “ease demand pressures” at the foreign exchange spot market.
The peso has depreciated by 7.54% against the dollar year-to-date, among the weakest in the region next to the Indian rupee and the Indonesian rupiah, Reuters said in a report on Friday.
The CRPP facility is a non-deliverable peso-dollar forward (NDF) contract between the BSP and local universal and commercial banks that will provide a hedge fund for bank clients wanting to shield themselves from potential FX-related losses.
Under the facility, parties agree that on maturity of the forward contract, only the difference between the contracted forward rate and the spot rate will be settled in pesos.
Covered are unhedged loans and payables expressed in a foreign currency such as BSP-registered short-term trade loans, medium- to long-term trade loans maturing within 90 days from date of CRPP application, short-term trade borrowings made by oil companies from offshore banking units and US dollar trust receipts, among others.
Hedging contracts will last 90 days, although clients have the option to reavail, the BSP said.
PROTECTION
BSP Deputy Governor Diwa C. Guinigundo has said that the CRPP is meant to assure companies that they will be “protected” from exchange rate fluctuations.
This is expected to ease dollar demand as it enables businesses to hold off running to the spot market to cover future requirements. Getting their exposures hedged addresses liability concerns should the peso weaken further.
Mr. Guinigundo noted that the peso’s recent weakness has been largely due to external developments, particularly the US-China trade war.
The CRPP was introduced in 1997 as a measure to address the impact of foreign exchange volatility during the Asian Financial Crisis. It was then updated in 2005 while the last availment was in 2009.
Central bank officials decided to revive the facility just as the peso breached fresh 12-year lows early September, with the local unit even breaching the P54-to-$1 level last week. The local currency recovered slightly on Friday last week, closing at P53.97 to the greenback.
Incentives will be given to banks that offer the hedging facility, the central bank said. “Exposures under the CRPP facility shall not be subject to NDF position limits,” the BSP said, adding that “reduced market risk capital charges shall be applied for net open positions for NDFs under this facility.” — Melissa Luz T. Lopez

July OFW remittances expected to have edged up

REMITTANCES likely grew modestly in July from a year ago as overseas Filipino workers (OFWs) reaped benefits of a weaker peso, a global bank said, giving their families more cash even with the same level of dollars they used to send home.
HSBC Global Research said cash remittances likely grew by 5.1% in July. If realized, this would signal recovery from the 4.5% decline in such inflows in June but would ease from a 7.1% year-on-year pickup in July 2017.
The Bangko Sentral ng Pilipinas (BSP) is scheduled release the latest remittance data today.
“Remittances have been slow at the start of the year, up just 2.7% year-on-year for the year to date. Annual remittance growth ranges around 5-7%, and lower transfers this year mean that growth will probably come in at the low-end of the usual range, at around five percent,” the economists said in a report published over the weekend.
Money wired home by OFWs through banks amounted to $14.179 billion last semester, a modest climb from $13.813 billion in last year’s first half. The increase is softer than the BSP’s forecast of four percent growth in remittances for the entire 2018.
The BSP had said the slower rise in remittances could be due to thousands of Filipinos working in the Middle East who availed of the repatriation offer of the Duterte administration amid reports of illegal recruitment and maltreatment at the hands of their employers. This resulted in smaller inflows from United Arab Emirates, Saudi Arabia and Kuwait.
Around 10 million OFWs provide for their families in the Philippines. In turn, these cash transfers fuel household spending that drives more than 60% of overall economic growth.
The peso’s weakness against the dollar is likewise expected to keep remittance amounts steady. “[T]here are downside risks to remittance growth given PHP weakness, which may be limiting growth in dollar terms as overseas Filipino workers do not feel the need to send so many dollars back home,” HSBC said.
The peso has depreciated versus the greenback in recent months, touching a fresh 12-year low after breaching the P54:$1 mark last week. The global lender said this gave OFWs the leeway to send the same amount of dollars to their families from a year ago, as these would have bigger values once converted to the local currency.
In a separate commentary, ING Bank N.V. Manila senior economist Jose Mario I. Cuyegkeng said remittances have been “weak” in recent months and have been “inadequate to cover the wider trade deficit”.
The country’s current account deficit ballooned to $3.1 billion as of end-June, already hitting the BSP’s full-year forecast, on the back of surging merchandise imports and an export slump. — Melissa Luz T. Lopez

Emerging market currency crisis could lead to broader economic trouble, recession

LONDON — Emerging market investors are trying to gauge whether a currency crisis and the steep interest rate hikes being used to fight it could turn into a broader slowdown and even recession.
On Thursday last week, Turkey’s central bank attempted to draw a line under a lira collapse of almost 40% this year by hiking interest rates more than six percentage points to 24%.
Argentina is struggling to shore up its peso, which has more than halved in value despite punitive interest rate rises to 60%.
Other currencies have been caught in the slipstream, with India’s rupee plumbing record lows and South Africa’s rand, Russia’s rouble and Brazil’s real losing 15-20% this year so far.
Signs are appearing that months of market turmoil are starting to take the toll on real economies.
South Africa unexpectedly entered recession in the second quarter of this year, Argentina is predicted to follow suit and Turkey is now widely forecast to experience a hard landing over the next year.
BUSINESS CONFIDENCE
So what is growth like in these countries right now, what signs are there of a shock to business and consumer confidence and has the near sudden stop in investment flows seen 2019 economic forecasts deteriorate markedly?
Purchasing manager indexes have suffered sharp drops across many developing nations, according to data earlier in the month.
“When you have an environment where (the) US dollar is strengthening and US front-end rates are going up that tightens external financial conditions for emerging markets, especially for the deficit economies,” said Murat Ulgen, global head of emerging markets research at HSBC.
DOMESTIC FINANCIAL CONDITIONS
Meanwhile faced with capital outflows, many emerging market policy makers have opted to hike rates, thereby also tightening domestic financial conditions, Mr. Ulgen added.
“Given that markets have been volatile, generally speaking, and rates have been higher and equity markets have been lower in summer months… it is highly likely that financial conditions are still staying in the negative territory,” he said.
Having tumbled some 22% from their January peaks, emerging equity markets are in territory commonly regarded as a bear market, is often considered to be self-sustaining decline.
“Tighter financial conditions are going to weigh on economic activity going forward,” predicted Mr. Ulgen.
Emerging markets are familiar with such crises.
The Institute of International Finance (IIF) found nine episodes since 1980 where when real exchange rates fell 30% or more, the devaluation was sustained for at least three years and the decline did not reverse a previous overvaluation.
Mexico suffered such a fate in 1995, Indonesia and Russia in 1998 and Brazil a year later.
Meanwhile, Argentina and Uruguay recorded such declines in 2002, Egypt in 2003 and 2016 and Ukraine in 2014.
“There are only nine episodes historically where the real exchange rate has fallen as much and as permanently,” Robin Brooks, chief economist at the IIF, wrote in a recent paper.
“Real GDP falls sharply in the year of devaluation, followed by a relatively rapid recovery. The current account shifts from sizeable deficit to surplus in the wake of devaluation, powered initially by import compression and – over time – rising export volumes.”
A weaker currency helps close balance of payments gaps by boosting export competitiveness but also by pinching domestic purchasing power while tighter credit saps demand and growth.
What’s more, analysts are also closely assessing the impact of a growing number of trade conflicts and tariffs on emerging economies, which have seen trade become an increasingly important factors in generating economic activity.
Mr. Ulgen — who has already chopped his economic outlook for Turkey, Argentina, Brazil and South Africa — predicts the growth differential of emerging versus developed market growth will shrink in the near-term.
Meanwhile capital flows will play a key role in how the most vulnerable economies will weather the latest crisis.
Last year saw healthy flows into emerging markets, according to HSBC, which estimates that in 2017 bond markets saw inflows of $70 billion dollars while equity flows were $65 billion.
Following a healthy start to 2018, emerging bond markets have suffered a full reversal of flows; equity markets have seen just under half of the $55 billion that had come in until the end of May leave again, HSBC found.
Luis Organes at JPMorgan warned that a “sudden stop” or abrupt reduction in capital flows into emerging markets (EM) and associated negative feedback loops should bring an extended period of adjustment for countries running a large current account deficit.
“Despite recent EM growth downgrades, activity data continue to point to downside risks to our GDP forecasts,” he wrote in a recent note to clients.
“This could be the start of the next phase of a more prolonged downturn for EM assets given negative feedback loops from EM growth downgrades to financial markets, EM positioning levels which have not lightened meaningfully, and a more enduring contagion from Turkey and Argentina.” — Reuters

Kuya J owner ready for public listing

THE owner and operator of Kuya J restaurant chain is keen on taking the company public as soon as possible, as it pursues an aggressive expansion program in the country.
Kuya J Holdings Group, Inc. President Winglip K. Chang said the company is currently evaluating whether it will enter the Philippine Stock Exchange through an initial public offering or by way of backdoor listing.
“We have no concrete notion or plans on what we are going to do yet, we have not yet made any decision. But we would like to do it as soon as possible,” Mr. Chang told reporters on the sidelines of the company’s introduction of a new franchising program in Taguig City last week.
Businessman Lowell L. Yu, who chairs the Kuya J group, last year took control of listed dormant firm Pacifica, Inc., which could pave the way for a potential backdoor listing for the restaurant chain. The takeover was executed through the purchase of a 36.52% stake in Pacifica by Mr. Yu’s firm Unido Capital as well as a subsequent tender offer to minority shareholders.
The Kuya J group earlier said it aims to go public once it hits the 100-store mark. To-date, it operates a total of 106 stores nationwide.
Mr. Chang noted that they continue to be on the lookout for more locations to put up Kuya J restaurants. The group targets to have 200 stores by 2019, with 20 to 25 stores set to be opened this year alone.
“We are in a very aggressive expansion mode. So the only hindrance there is really good locations . . . As we grow, the challenge is to find a good location,” Mr. Chang said, adding that they consider a site’s accessibility, traffic figures, and the presence of a catchment area when looking at where to put up a new potential branch.
Kuya J Holdings is also banking on its newly launched franchising program to help boost expansion, where the company can extend up to a 70% loan to franchisees payable by the revenues to be generated from the store they will put up. This will allow franchisees to operate a Kuya J restaurant by shelling out only P4 million out of the supposed P10-15 million investment.
Mr. Chang also said choosing to franchise the brand will help them expand their footprint across the country since locals will have a better feel of the market.
“A lot of franchisees are well-connected sa sariling bayan nila (in their own country). So when you have your own place na malakas (that is strong), a commercial structure and there’s a very good traffic there, it makes it easier for you now to open a business because you have the necessary numbers,” Mr. Chang said.
Aside from the Kuya J brand, the company’s portfolio includes Isla Sugbu, Seafood City, Tsay Cheng Chinese Cuisine, Majestic, and the Heritage Grand Convention Center of Cebu. — Arra B. Francia

E-commerce growth prompts foodpanda expansion till 2019

THE foodpanda Group plans to expand into six more cities until 2019 as it tries to catch up with the fast-growing e-commerce market in the country.
“By the end of the year we’re looking at three cities. Next year, I’m not too sure on which quarters, but we’re looking to add six more. For next year, we’re looking at Luzon, Visayas and Mindanao. Although we have Davao na (already), we’re looking at other Mindanao areas,” Cheena Abellon, the marketing head of foodpanda.ph, told BusinessWorld in an interview at the ShopFest e-commerce forum held in Taguig City.
The initial three cities to open this year will be concentrated in Luzon, said Ms. Abellon, who declined to specify the locations.
foodpanda currently has seven delivery centers spread in the cities of Makati, Mandaluyong, Manila, Pasig, Quezon, Cebu and Davao.
To date, it has around 900 restaurant partners on board and expects to hit the 1,000 mark by year end.
For its logistics fleet, foodpanda is nearing 1,000 motorcycles and bikes, which are expected “to double or triple” alongside its expansion plans.
Ms. Abellon described 2018 as a “really, really good year for growth,” although declining to give figures.
She cited its new partnerships with several brands, including fastfood giant McDonald’s, as profit drivers for the year. Soon, foodpanda will be announcing more partnerships, including a “huge” casual-dining food brand that trends online.
Towards the end of the year, the platform will be exhausting “a lot” on marketing efforts.
“You can expect a lot of visibility [for foodpanda],” Ms. Abellon said, noting that the firm will go heavy in social media and event participation, among others.
Part of this marketing campaign is putting up its first pop-up store, possibly in high-traffic commercial areas like central business districts, by the last quarter of the year.
“It’s a way for us to work with partners and allow them to explore opportunities in places they are not present. It’s campaign-based but may be, if it works out, it can be for the long term… We want to have a point of sales, something that people can actually touch and see rather than go through online,” Ms. Abellon said.
NEW DIGITAL SERVICES
Prashant Kala, country head of ShopBack Philippines, recognized the rapid pace at which e-commerce is expanding in the country.
“In the Philippines, we see a lot of local e-commerce getting very strong. It’s the most dynamic country in Southeast Asia today,” Mr. Kala said in an earlier interview.
The foodpanda marketing chief noted the same. However, Ms. Abellon said the Philippine market still needs a “bigger push” to be more receptive in new technologies to avoid lagging behind Southeast Asian neighbors.
“Philippines is fast growing but it’s not a mature community yet. It’s not a mature market because everything is like new to us,” Ms. Abellon said, comparing the country to Singapore where foodpanda has a 10,000-delivery fleet.
“We have a strong penetration in social media but when it comes to the way we receive service-related or shopping-related [platforms], it kind of takes a while. But it’s fast growing,” she added.
Ms. Abellon said more restaurants are seeing the benefits of food delivery services in reducing their cost and gaining a higher online presence.
“They see it in two ways,” she said.
It can be a marketing channel for them and at the same time, the high operational cost of call centers for overhead and motorcycles may be prompting them to explore a partnership with delivery services, she added.
Owned by Berlin-based Delivery Hero SE, the foodpanda group operates in 51 countries. In the Philippines, foodpanda was launched in June 2014. — Janina C. Lim

City of Dreams operator sets bourse exit in November

AFP

THE operator of City of Dreams Manila plans to exit the Philippine Stock Exchange (PSE) by November, after it conducts next month a tender offer to buy out all minority shareholders.
In a disclosure to the stock exchange late Friday, Melco Resorts and Entertainment (Philippines) Corp. (MRP) said its controlling shareholder, MCO (Philippines) Investments Ltd. (MCO Investments) had filed an initial tender offer report with the Securities and Exchange Commission on Sept. 14.
The tender offer is set to run from Oct. 3 to 30, with the acceptance of shares tendered to be completed by Nov. 7. The shares are scheduled to be crossed from the stock exchange by Nov. 14, depending on the approval of the PSE.
The company named Maybank ATR Kim Eng Securities, Inc. as the tender offer agent for the transaction.
MCO Investments seeks to acquire up to 1.54 billion common shares in MRP at P7.25 apiece, which means it will spend P11.18 billion to buy out all minority shareholders. The company said the exercise will “increase and consolidate its interests in MRP to better support and facilitate MRP’s future business plans.”
The tender offer price represents around a 14% premium over the three-month volume weighted average price of MRP shares.
The tender offer is being conducted as part of MRP’s plans for voluntary delisting, which it announced last Sept. 10. Under PSE rules, MCO Investments must acquire at least 95% of MRP’s outstanding capital stock in order for the local bourse to entertain its petition for voluntary delisting. Should the company fall short of the 95% requirement, it said it will still proceed with the request for voluntary delisting.
MRP noted that the tender offer will allow shareholders to liquidate their investments prior to the company’s delisting. Should shareholders try to sell or transfer their shares in the company once it is out of the PSE, the transaction will be subjected to a capital gains tax and documentary stamps.
The company cited its “inability to raise funds despite considerable efforts and expenses being incurred to maintain its listed status” as the reason for taking its shares out of the stock exchange.
MRP reported a net income of P1.89 billion in the first half of 2018, surging 437% year-on-year. Operating revenues dipped by 1% to P16.54 billion due to the adoption of a new revenue standard “which resulted in higher commissions paid to gaming promoters being deducted from casino revenues.” — Arra B. Francia

DTI seeking to cancel permits of traders found selling only premium rice

THE Department of Trade and Industry (DTI) said it will seek to revoke the business permits of rice retailers who do not offer more affordable types of rice.
Trade Secretary Ramon M. Lopez said the proposed policy will help increase the supply of regular-milled.
“Our DTI Regional Directors and Provincial Directors (ask) Mayors (with help of DILG) to issue an Executive Order as Chief Executives that they shall revoke business permits of rice retailers who do not sell regular (as well as) well-milled rice,” Mr. Lopez told reporters in a mobile message over the weekend.
“Applications for business permits for rice retail shall not be approved without a sworn undertaking from the applicant to sell regular and well-milled rice,” he added.
Domestic rice offered by the National Food Authority (NFA) comes in three grades for well-milled rice, between WD1 and WD3 in decreasing levels of price. For regular-milled the grades are RD1 to RD3. There is also a seventh grade of well-milled rice known as WD1-A, which commands the highest price, wholesaling for P30 per kilogram according to the NFA website.
Imported rice, on the other hand, is graded by percentage of broken grains.
The NFA offers low-cost rice to shield the poor from higher prices sold by commercial traders, and an order to commercial traders to sell rice in grades carried by the NFA appears intended to expand the availability of rice most commonly bought by the poor.
The DTI has also requested the NFA to “exert authority [in the form of] higher penalties or cancellation of license to require Rice retailers to always sell regular and well-milled… if they sell fancy premium rice.”
In a phone interview yesterday, NFA Deputy Administrator for marketing operations Judy Carol L. Dansal, a lawyer, confirmed the proposed policy, saying “it is part of a commitment” to make NFA-grade rice more available in the market.
The DTI said some outlets only offer premium rice which retails for at least P44 per kilo, against the P38 and P40 at which regular-milled and well-milled are respectively and currently being sold at the retail.
“[T]hat is why consumers find rice prices higher,” Mr. Lopez added.
The DTI also asked Philippine Amalgamated Supermarkets Association Inc. to serve as outlets of NFA-grade rice.
“They will pick up from NFA warehouses,” and the NFA’s Ms. Dansal “has agreed,” Mr. Lopez added.
Ms. Dansal said the NFA will identify today, Monday, the supermarkets that can serve as NFA outlets.
The DTI will sign this week a memorandum of agreement with the NFA, which has sole authority to issue licenses to retailers selling rice sourced from the NFA’s warehouses. — Janina C. Lim

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