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Twin car bombs hit Benghazi, kill more than 30

BENGHAZI, LIBYA — A double car bombing in the east Libyan city of Benghazi on Tuesday left at least 33 people dead and dozens more wounded, including senior security figures and civilians, officials said. The twin explosions shattered the relative calm that had recently returned to Libya’s second city, scene of more than three years of warfare from 2014 until late last year. The first blast struck outside a mosque in Benghazi’s central Al Salmani district as worshippers were leaving evening prayers. Some 10 to 15 minutes later, after security and health officials had arrived on the scene, a second, more powerful blast was detonated from a Mercedes parked on the opposite side of the street, hitting an ambulance and causing a higher number of casualties. Health officials said the toll could rise because some of the wounded were in critical condition. It was not immediately clear who was responsible. — Reuters

Aboitiz Power backs temporary ERC appointments

ABOITIZ POWER Corp. has joined calls from industry stakeholders for the President to resolve the impasse at the Energy Regulatory Commission (ERC) after the suspension of the agency’s four commissioners for a year.

The listed company, one of the biggest energy groups in the country, said a “fair and functioning ERC is critical for the energy sector to work.”

“A working regulatory body balances the welfare of the paying consumers, interests of the private investors, and the government’s desire for reliable and ample power,” said Antonio R. Moraza, AboitizPower president and chief operating officer, in a statement on Wednesday.

“We are appealing to the national leadership to resolve the ERC issue as soon as possible so the commission can get back to work and act on many pending issues awaiting their decision,” he added.

The four ERC commissioners, along with the previous ERC chairman, were ordered suspended for one year by the Office of the Ombudsman in connection with the revised implementation date of the competitive selection process, which it said favored a few power supply contracts.

As a collegial body, the ERC needs the presence of at least three members of the commission to constitute a quorum. The majority vote of two members is needed during meetings that require regulatory approval. But for the approval of electricity rates, the unanimous vote of the three is required.

The earliest that the regulator can have a quorum is if the Office of the President immediately appoints temporary commissioners when two of the suspended officials retire in July.

Earlier this month, Manila Electric Co. President Oscar S. Reyes said he wanted to be able to assure consumers in the utility’s franchise areas “that we will have adequate, reliable, least cost power.”

“That’s why ERC approval of our PSAs [power supply agreements] is critical,” he said, referring to seven Meralco supply contracts that are pending with the regulator.

Meralco, the country’s biggest power distribution utility, was hoping to see the approval of the contracts by the end of last year but the Ombudsman’s suspension order was served on Dec. 22, 2017.

“It may put at risk the capability of the industry to assure not only supply to customers but security of supply moving forward,” Mr. Reyes said.

“The industry is probably neutral as to the composition of the commission. What is important is it is adequately staffed [with people] who can properly play their roles as regulators,” he added.

ERC Chair Agnes T. Devanadera has said that the suspension of the commissioners would put on hold funding for P1.588 trillion worth of energy-related projects and capital outlays.

Sherwin T. Gatchalian, who chairs the Senate committee on energy, said in a legislative hearing last week that the “most practical” way forward for the ERC is for the Office of the President to appoint temporary commissioners. He said the move has legal basis under the administrative code.

For its part, the Department of Energy (DoE) agreed with the Philippine Electricity Market Corp. to allow power generation companies with expired certificates of compliance (CoC) — including those with pending applications — to continue operating and trading at the wholesale electricity spot market.

The agreement with the operator of the spot market is in line with DoE Secretary Alfonso G. Cusi’s pronouncement that he would not allow any disruption in the country’s power supply.

The CoC, which is issued by the ERC, is proof that a power plant complies with the applicable regulations, making it safe to switch on and operate. — Victor V. Saulon

Japan seeks upgraded whaling ship

TOKYO — Japan is considering upgrading its ageing lead whaling ship, a fisheries official confirmed Wednesday, in a sign that the country’s controversial Antarctic hunts will continue despite international protests. The Fisheries Agency has requested ¥100 million ($910,000) in the national budget for a study into the future of commercial whaling, an agency official told AFP, including the fate of the 30-year-old Nisshin Maru, the lead vessel of Japan’s whaling flotilla. “That study will include discussions on what to do with the Nisshin Maru — if its life should be extended (by repairs), or should be replaced with a used ship or a new ship, among other ideas,” according to the agency’s Takato Maki. The 8,145-ton vessel has been the “mothership” of Japan’s whaling flotilla since 1987 but is now old, said Maki. He said Japan has no plans to change its policy of staging an annual “research” hunt to prepare for an eventual return to commercial whaling. Japan is a signatory to the International Whaling Commission’s moratorium on hunting, but exploits a loophole that allows whales to be killed in the name of scientific research. Tokyo says lethal research is necessary for in-depth knowledge of whale behavior and biology, but it makes no secret of the fact that whales killed in the hunts often end up on dinner plates. — AFP

Apple says delayed HomePod connected speaker ready to go

SAN FRANCISCO — Apple said on Jan. 24 its HomePod speaker, the digital assistant device challenging rivals from Amazon and Google, was now ready after a delay of several months.

HomePod, which missed the key holiday shopping season in the fast-growing market for connected speakers, will be available for pre-order Jan. 27 (PHT) and in stores Feb. 9 in the US, Britain and Australia.

A statement said it would hit markets in France and Germany “this spring.”

Apple is arriving late to a market dominated by Amazon’s Alexa-powered devices and to a lesser degree Google Home, which includes voice-activated devices that can answer questions and be a smart home hub.

The iPhone maker however is seeking to position HomePod, powered by its Siri digital assistant, as a high-end device designed for music as well as other services. It starts at $349, making it more expensive than most competing speakers.

“HomePod is a magical new music experience from Apple,” said Philip Schiller, Apple’s senior vice-president of marketing.

“It brings advanced audio technologies like beam-forming tweeters, a high-excursion woofer and automatic spatial awareness, together with the entire Apple Music catalog and the latest Siri intelligence, in a simple, beautiful design that is so much fun to use.”

While Amazon and Google have released no specific sales figures, private surveys indicate Amazon has grabbed the lion’s share of the market with Google a distant second.

The market is also seeing new devices powered by Microsoft’s digital assistant Cortana and Samsung is set to launch devices with its Bixby assistant. — AFP

Meralco Bolts snap losing skid

THE Meralco Bolts halted their losing skid in the PBA Philippine Cup yesterday, defeating the Kia Picanto, 105-76, in their battle of struggling teams at the Smart Araneta Coliseum.

Using a strong surge in the second period, the Bolts created a considerable distance and stayed dominant the rest of the way to stop a three-game losing streak and improve to 2-3 in the season-opening Philippine Basketball Association (PBA) tournament.

The contest got off to a competitive start, with both teams making hay in the opening quarter.

Following a frenetic sequence of runs and counterruns, the Bolts would take the first frame, 27-21.

Meralco would crank things up to start the second canto, going on a 12-2 blast in the first four minutes to extend its lead to 16 points, 39-23.

Rashawn McCarthy and Mark Yee tried to rally back the Picanto but the Bolts would hold their ground and maintain control by the halftime break, 60-41.

In the third period, the two teams struggled to get their offensive game going, allowing the Bolts to continue holding sway and even adding to their lead, 79-58, by the end of the third canto.

Buried deep to start the payoff period, Kia tried to give its cause some spark.

Like much of the preceding periods though, the Bolts hardly lost step and rhythm, countering en route to coasting to the win, and sending the Picanto (1-5) to another loss after winning in their previous game.

Niño Canaleta showed the way for Meralco with 17 points and six rebounds.

Jared Dillinger had 13 while Anjo Caram finished with 12 points.

Messrs. McCarthy and Yee led Kia with 17 and 14 points, respectively.

“It was nice to see the players show up with more energy and played with more purpose especially on the defensive end. It is something we have been working on. Hopefully we get to sustain it in our next games. Overall, it was a good team effort,” said winning coach Norman Black after the game.

Meralco next plays on Sunday, Jan. 28, against the GlobalPort Batang Pier while Kia faces off with the TNT KaTropa on Wednesday, Jan. 31. — Michael Angelo S. Murillo

The Merits of Index Fund Investing

Whenever friends or students ask for advice about investing in the stock market, I always point to pooled funds as the preferred entry strategy for investing in assets that they may not be familiar with. Pooled funds allow the investor to take advantage of many benefits. Professional management will take care of the burden of selecting, monitoring, and trading securities. Diversification will reduce risks as the negative performance of one asset may be offset by the positive performance of another. Economies of scale are achieved as costs of transactions are shared among investors. Pooled funds can easily be bought and sold as needed. Finally, the minimum investment requirement is not so high.

But wait; as the sales pitch goes, it gets even better.

Modern portfolio theory has provided a good justification for adapting a passive investment policy that avoids security analysis. This strategy is called indexing. A passive strategy is based on the premise that securities are fairly priced and there is no need to scrutinize many stocks. One can simply select a diversified portfolio of common stocks that mirror the corporate sector of the broad economy. The investor chooses a portfolio with all the stocks in the broad market index such as the Phisix. The rate of return on the portfolio then replicates the return of the market.

In the US, more money today is invested in the passive way than in the active way. A recent The Economist article has, however, cited objections to this emerging trend. One argument is that indexing is bad for capitalism. A key role of financial markets is to allocate capital to the most efficient companies, but index funds fail to do this. Also, index funds pose a threat to competition. The asset management market used to be active and diverse, but if more fund managers take the passive approach, this can lead to the demise of a promising industry. But The Economist’s Buttonwood argues as follows, “Yes, if the market was 100% owned by index funds, that would be a problem. And if there were no crime, policemen would be out of work. But we are nowhere near that point.”

Most modern finance textbooks will argue that it is very difficult to devise supposedly superior investment strategies that beat the market. Yes, there will be rewards to especially diligent, intelligent, active investors who are able to trade at the onset of new information, but this is more the exception than the rule. A number of studies covering the performance record of professional active managers show it is possible, but difficult, to beat the market. And if all this empirical evidence is credible, there is indeed value in a passive index investing approach. So, to my friends and to anybody who cares to listen, I still say the index fund investing strategy makes good sense.

This indexing strategy appears to be naïve and perhaps even lazy.

However, in a truly competitive market, the forces of demand and supply will guide security prices to levels at which further analysis is unlikely to produce significant profit opportunities. The financial market is efficient if it provides funds at fair prices. A price is fair if investors will have equal access to all material information about risks and returns of the asset. Efficiency ensures that market players receive all price-sensitive information, and it will be very difficult to outdo each other.

A passive strategy based on index investing is worth considering, especially by new entrants to the equity investment world. Compared with the active strategy, the costs and effort are much less. It also provides free-rider benefits. Assuming many active investors are buying undervalued stocks and selling overvalued ones, the assets will be fairly priced most of the time. Thus, a well-diversified portfolio shown in the index is a reasonable investment. If we believe the overall Philippine market is following an upward trend, investing in the index fund is a winning formula.

The caveat to this strategy is that it relies so much on the assumption that the market is information-efficient. Many observers still believe, and understandably so, that certain parties in the Philippine market have better access to new information than the average investor. Thus, some quarters unsurprisingly achieve abnormal returns due to this distinct and unfair advantage. The thinking investor must be aware of this downside.

The views expressed here are his own and do not necessarily reflect the opinion of his office or of the faculty and administration of DLSU.

 

Benel D. Lagua is Executive Vice-President at the Development Bank of the Philippines. With an AIM-MBM and a Harvard-MPA, he is a part-time faculty of the Ramon V. Del Rosario College of Business of De La Salle University.

benellagua@alumni.ksg.harvard.edu

The Shape of Water scores big with 13 Oscar nominations

LOS ANGELES — Fantasy romance The Shape of Water topped the Oscars nominations list on Tuesday with 13 nods, one shy of the record, as the Academy also gave a rare nomination to a woman in the directing category.

In second place was tense World War II epic Dunkirk, with eight nods, while crime drama Three Billboards Outside Ebbing, Missouri, generally thought to be the favorite in the best picture category, picked up seven nominations.

But The Shape of Water, Guillermo del Toro’s Cold War-set story of love between a mute cleaning woman and a mystery merman-like creature, dominated the competition.

It scored nods for best picture, best director, and best actress for its star Sally Hawkins.

Richard Jenkins and Octavia Spencer each scored nominations in the supporting acting categories, and the film was also nominated for best original screenplay, with the rest of its nods coming in technical categories.

The haul fell one short of the record for most nominations ever, held jointly by La La Land, Titanic, and All About Eve.

“This nomination is for every one of us who brought our hearts to this film,” Hawkins said in a statement retweeted by the movie’s official Twitter account.

“I’m here because of the greatness of others. I stand on the shoulders of giants.”

The 90th Academy Awards — the climax of Hollywood’s awards season, to be hosted by late night funnyman Jimmy Kimmel — will be held on March 4.

Organizers will be looking to rebound after last year’s flubbed announcement of the best picture winner — the trophy was initially given to La La Land, when the actual winner was Moonlight.

WOMEN FILMMAKERS RECOGNIZED
In a departure from previous years, there are very few clear frontrunners, making the race far more interesting.

With the #MeToo and Time’s Up campaigns against sexual misconduct and gender inequality dominating the 2018 awards circuit, the Oscars announcement was seen as an opportunity for the industry to support female filmmaking — snubbed at the Golden Globes.

The Academy of Motion Picture Arts and Sciences will be seen as having righted that wrong to some degree, with its nod for Greta Gerwig, the director of Lady Bird.

Before Tuesday, just four women had been nominated for best director since 1927.

In the best director category, Gerwig and Del Toro take on Christopher Nolan (Dunkirk), Jordan Peele (Get Out), and Paul Thomas Anderson (Phantom Thread).

There was also the first nod for a female cinematographer, Rachel Morrison, who shot Dee Rees’s racial drama Mudbound.

Gerwig recently told Variety she was “heartened” by “the number of women who are making really interesting films and the desire to shine a spotlight on them.”

STREEP, DAY-LEWIS IN THE HUNT
The Shape of Water will vie for best picture honors with eight other films, including Dunkirk, Three Billboards, coming-of-age movies Call Me By Your Name and Lady Bird, and Winston Churchill saga Darkest Hour.

Others in the coveted top category are dark satire Get Out, Daniel Day-Lewis’s apparent final film Phantom Thread — he has announced his retirement — and Pentagon Papers thriller The Post.

Three Billboards — buoyed by strong showings at the Golden Globes and Screen Actors Guild Awards — remains in pole position for the top prize, according to the Gold Derby awards prediction website.

For best actor, Day-Lewis will battle for a golden statuette with Timothee Chalamet (Call Me by Your Name), Daniel Kaluuya (Get Out), Gary Oldman (Darkest Hour) and Denzel Washington (Roman J. Israel, Esq.).

“I’m walking around in a daze. I’m so proud of Team Get Out. What a ride. What an experience. What a year. What a team. I’m so happy and proud of King Peele,” Kaluuya said in a statement to Entertainment Weekly.

In the best actress category, Hawkins has competition from Frances McDormand (Three Billboards), Margot Robbie (I, Tonya), Saoirse Ronan (Lady Bird), and Meryl Streep (The Post), who notched her record 21st nomination.

Best supporting actor pits Jenkins against Christopher Plummer, a last-minute stand-in for Kevin Spacey, who was dropped from All the Money in the World after being accused of numerous cases of sexual misconduct.

The other nominees were Willem Dafoe (The Florida Project), Woody Harrelson and Sam Rockwell (both Three Billboards).

The Oscars cap a difficult few months for the film industry, which has faced widespread allegations of sexual harassment and assault, sparking a period of soul-searching that has cast a shadow over the normally joyous awards season.

A flood of allegations since October have led to the downfall of numerous powerful figures including Harvey Weinstein, Jeffrey Tambor, and Brett Ratner.

James Franco (The Disaster Artist), a popular contender for best actor, joined Spacey in seeing his Oscar hopes shot down in flames after becoming tainted by scandal. — AFP

Capiz 2018 infrastructure budget slashed

THE 1ST District Engineering Office in Capiz has suffered a substantial slash in their budget for 2018. Department of Public Works and Highways (DPWH-Western Visayas) Regional Director Wenceslao M. Leaño Jr. said that from the roughly P1.6 billion received by the district office in 2017, this year’s budget did not even reach P100 million. “They have a budget of P5 million plus another P30 million that is lodged at the regional office. I’m not sure about the (exact) figure but the reduction was very substantial considering that they had more than P1 billion budget last year,” he said. District Engineer Gerald A. Pacanan confirmed the huge cut saying, “There was a P30 million slash in the budget which was supposedly posted in the Web site of the Department of Budget and Management. But after the printing, it was excluded.” Both officials declined to comment whether politics could be behind the limited budget. Mr. Pacanan said budgeting is a political exercise and so he leaves it to the politicians to explain this year’s allocation. The province’s 1st Engineering Office is under Rep. Emmanuel A. Billones who is a member of the opposition Liberal Party. — Louine Hope U. Conserva

Oscars nominations: all the fun facts

LOS ANGELES — The nominations for the 90th Oscars were announced Tuesday, with The Shape of Water, Dunkirk, and Three Billboards Outside Ebbing, Missouri leading the pack. But the statistical quirks that the annual event throws up can be as intriguing as tracking which movies get the most nods.

Here are some fun facts and figures from this year’s list of nominees:

• Female filmmakers recognized.

The 7,000-plus voters of the Academy of Motion Picture Arts and Sciences managed to remember this year that women make movies too.

Greta Gerwig, recognized for Lady Bird, is only the fifth female best director nominee, and the first since Kathryn Bigelow won for The Hurt Locker in 2010.

Rachel Morrison, the director of photography on Mudbound, is the first woman to receive a nomination for cinematography.

• Long live Queen Meryl. Meryl Streep increases her lead as the most nominated performer in history with her 21st nod for Steven Spielberg’s The Post.

Her three wins were for Kramer vs. Kramer (1979), Sophie’s Choice (1982), and The Iron Lady (2011).

• All hail the maestro. John Williams adds to his record number of music scoring nominations with his 46th for Star Wars: The Last Jedi.

His overall total of 51 nominations — including five for original song — is the most for any living person, and second only to Walt Disney at 59.

• Kobe Bryant: Oscars MVP? Basketballer Kobe Bryant, an 18-time NBA all-star, is an Oscar nominee thanks to his collaboration with artist Glen Keane and composer John Williams for the short Dear Basketball.

“What?? This is beyond the realm of imagination,” Bryant, 39, tweeted following the announcement.

But not everyone will be delighted with the nod.

In the wake of the Harvey Weinstein scandal, it will be a reminder that the Los Angeles Lakers legend was arrested over the suspected rape of a hotel worker in Colorado in 2003. Bryant admitted to a sexual encounter, but insisted it was consensual. The criminal case was dropped when the accuser refused to testify, but Bryant faced a civil suit. As part of an out-of-court settlement, he publicly apologized to his accuser, but admitted no guilt.

• Snubs and surprises. Among this year’s big snubs were Golden Globes nominees Armie Hammer (Call Me by Your Name) and Hong Chau (Downsizing), as well as Wonder Woman, which didn’t get a single nomination.

Mudbound and The Big Sick were conspicuously absent from the best picture category, though they received other nominations.

Steven Spielberg (The Post) and Martin McDonagh (Three Billboards) were both left out of the best director category, despite helming two of the most acclaimed movies of the year.

On the other side of the coin, Denzel Washington picked up a surprise 8th nomination for acting, expanding his own record as the most-nominated black actor in Oscars history. He has won twice, for Glory and Training Day.

Washington also has a nomination for best picture for Fences, which he directed and co-produced. — AFP

Weak demand of iPhone X to hurt Sony — JPMorgan

SONY CORP.’s lucrative smartphone camera business may be heading for a slowdown.

The Tokyo-based company’s image sensor business is likely to weaken amid slowing momentum for Apple, Inc.’s iPhones, an analyst at JPMorgan Chase & Co. wrote as he downgraded the company to neutral from overweight. IPhone X production will probably fall 50% quarter over quarter and the weakness is likely to continue for the first half of the year as demand for high-end smartphones plateaus, according to J.J. Park. Sony shares fell as much as 5.2% by midday in Tokyo.

Sony is the global leader in the production of image sensors, camera chips which convert light into digital pictures and videos. Despite a cooling in the smartphone industry, it has benefited from a trend to include multiple image sensors in each phone — a technique used to create better-looking pictures and to power simple augmented-reality functions. In October, Sony raised its profit forecast for the current fiscal year in part because of sensor demand, and shares have rallied more than 60% over the last year.

Weak demand for the new iPhone X will hurt Sony, which gets half of its image sensor revenue from Apple, Mr. Park wrote. He also said the trend for adopting dual cameras is not as strong as first believed, including among Chinese phone makers, which will further hit Sony’s sales.

“Given high market expectation, in our view any shortfall in the semiconductor operation will put pressure on the share price,” Mr. Park wrote. Sony declined to comment on JPMorgan’s report.

Customers seemed to be opting for cheaper models of the iPhone, according to Cowen & Co., which suggested that Apple failed to cram enough new technology into the iPhone X to justify its $999 price tag.

Phone makers such as Apple and Xiaomi Corp. have been outfitting their latest models with two cameras on the back of each device, and in some cases on the front. That lets software compare two pictures to improve photo quality and gauge depth to perform basic AR functions.

But JPMorgan’s Mr. Park suggested consumers are shunning better picture quality for a cheaper price, saying that “high-end smartphones are clearly hitting a plateau along with higher product prices.” He said Sony has a 70% market share for high-end image sensors and is one of the few Apple suppliers whose shares have yet to adjust to waning demand for iPhone X.

“Despite a correction in Apple supply chain names, Sony has massively outperformed its global peers thanks to the structural trend of dual-cam,” Mr. Park. — Bloomberg

EasyCall seeks to comply with public float rule

EASYCALL Communications Philippines, Inc. (ECP) will be offering more shares to the public in line with the new minimum public ownership (MPO) requirements set by the Securities and Exchange Commission (SEC).

In a disclosure to the stock exchange on Wednesday, the company said its majority shareholder, TDG Ventures, Inc. (TVI), will be reducing its ownership in the company.

“TVI… has expressed its intent to reduce some of its shareholdings through the market in support of ECP’s compliance to the MPO that the SEC may impose,” the company said.

Data from the PSE showed ECP currently has a float of 10.06%, falling short of the 20% floor the required by the corporate regulator.

The SEC last November 2017 released new guidelines for companies looking to list their shares in the Philippine Stock Exchange, doubling the 10% MPO implemented since 2011 to 20%. This move is in line with improving liquidity in the market.

ECP is one of the 68 listed companies the SEC said would have to raise their MPO as a result of the new requirement. The commission is still studying the guidelines on how these firms can go about their re-IPO (initial public offering) or follow-on offerings.

Noncompliance with revised MPO could serve as ground for a possible delisting. For instance, PNOC-Exploration Corp. was involuntarily delisted from the PSE in 2013 after it failed to comply with the 10% MPO the SEC implemented in 2011.

Incorporated in 1989, ECP’s business involves corporate DSL resellership, Internet services, Web business solutions, and server co-location. The company also targets businesses unreachable by fiber optic cables, providing them with IP broadband solutions.

ECP realized a 60% increase in its net income attributable to the parent during the first nine months of 2017 to P5.36 million, following an 8% rise in revenues during the same period to P37.05 million.

Shares in ECP dropped P7.95 or 13.26% to P52 each at the Philippine Stock Exchange on Wednesday. — Arra B. Francia

Davao, Marawi eye sisterhood agreement

THE CITIES of Davao and Marawi are eyeing a sisterhood agreement wherein the former would commit to “extend technical assistance to Marawi in the fields of infrastructure development, urban planning, disaster management, and other expertise that may support for its rehabilitation,” according to the Davao City Investment Promotion Center. As this developed, the Davao City administration has asked the local legislative council to approve another P5-million assistance for Marawi’s recovery efforts. Last year, Davao released an initial P5-million aid following the five-month armed conflict between government forces and Islamic State-inspired local groups. “It is within our duty as elected officials to help other cities who are in need of our help,” Davao Mayor Sara Duterte-Carpio said in a statement. The Mindanao Development Authority (MinDA) also earlier urged the government to look into Shariah-compliant funding mechanisms such as Islamic microfinancing for both businesses and communities in Marawi as part of the rehabilitation program. — Carmelito Q. Francisco

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