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Flexible office spaces seen to continue growing

THE growth of flexible office spaces in Southeast Asia shows no signs of slowing down, with JLL expecting this property segment to account for as much as 30% of corporate portfolios by 2030.
The report “Technology firms transforming the office landscape in Southeast Asia” noted flexible work spaces have seen a 40% compounded annual growth rate in the last three years. Now, it takes up 2% of office stock in the Southeast Asian region, compared to 0.5-1% in 2015.
“(As) much as 30% of corporate portfolios could be flexible space by 2030. What initially began as a platform for freelancers and startups, flexible space providers are now tailoring their offering to accommodate corporate users. These corporate users are experimenting with co-working via pilot schemes,” JLL said.
JLL identified several factors driving the corporate demand for flexible spaces: flexibility to accommodate headcount changes; convenience with plug-and-play one-stop service; fostering collaboration and innovation; sense of community; and cost-effectiveness.
Singapore currently has the largest stock of flexible work space, followed by Manila and Jakarta.
JLL estimates flexible work space penetration rate in Singapore at 4.2%, while Manila has around 3%.
In Singapore, JLL noted flexible space appears to be more cost-effective than traditional office space. It estimated a workstation in a flexible space could be up to 50% cheaper than a workstation in a traditionally leased office.
“But coworking space is often much denser than traditional office space. When adjusted for density and like-for-like costs, the cost differentials decrease substantially, or disappear altogether. In Singapore, when density is taken into account, traditional leases cost only about 5% more than flexible space leases,” the report stated.
In the Philippines, co-working spaces have gained ground in recent years, as a growing number of Filipinos prefer flexible work arrangements.
Regus Philippines is a major player in the sector, having launched its 25th business center at the 41st floor of GT International Tower in Makati City last July.
Ayala Land, Inc. last year entered the flexible working space segment with its own brand called Clock In.
ASPACE is another homegrown co-working brand that runs collaborative workspaces in Makati, Bonifacio Global City, and Cebu. — Cathy Rose A. Garcia

Gov’t makes partial T-bills award

THE GOVERNMENT partially awarded the Treasury bills (T-bill) on offer yesterday as rates climbed across all tenors due to market expectations of fresh monetary tightening by the local and US central banks.
The Bureau of the Treasury borrowed just P8.316 billion during the T-bills auction on Monday out of the P15 billion it intended to borrow.
This, even as the offer remained oversubscribed as total tenders reached P20.7 billion, lower than the P21.9 billion offered by banks and other financial institutions last week.
Broken down, the government rejected all bids for the 91-day tenor even as total offers reached P5.435 billion out of the P4 billion it wanted to raise.
Had the government accepted all tenders, the papers would have fetched an average rate of 3.966%, 41.7 basis points (bp) higher than the 3.549% last week.
Meanwhile, the Treasury awarded P5 billion as planned in the 182-day debt papers out of total bids amounting to P7.304 billion. The average yield ended 24.4 bps higher at 4.597% from the previous rate of 4.353%.
On the other hand, the government partially awarded the 364-day T-bills, accepting offers amounting P3.316 billion out of the total P7.999 billion and versus its P6-billion program. The average yield rose to 5.4%, 26.3 bps higher than the 5.137% tallied in the previous auction.
At the secondary market ahead of the auction yesterday, the three- and six-month papers were quoted at 4.5217% and 4.74%, respectively, while the rate of the one-year notes stood at 5.1777%.
At the close of the trading, the 91-day and 182-day T-bills rallied to fetch lower rates of 3.4569% and 4.4583%, respectively, while the 364-day papers were quoted higher at 5.1907%.
National Treasurer Rosalia V. De Leon said the Treasury decided to reject all offers for the 91-day papers because the rates bid by banks were too high.
“For the 91-day, [we made a] full rejection because of the outrageously high bids,” Ms. De Leon told reporters Monday. “[For the 182- and 364-day papers,] we made full and partial award because it’s aligned with our own estimates where the bids should be.”
She added that market players priced in their expectations of another rate hike from the Bangko Sentral ng PIlipinas (BSP) as well as the US Federal Reserve.
Earlier this month, BSP Governor Nestor A. Espenills, Jr. hinted on another rate hike, saying the central bank will “take strong immediate action” to respond to the emerging threats to prices and inflation expectations.
The BSP has cumulatively raised rates by 100 bps since May, with rates currently ranging at 3.5-4.5%.
Meanwhile, two more rate hikes in September and December are expected from the Fed as the benchmark 10-year US Treasury on Friday passed the 3% mark for the first time in more than a month at 3.003%.
“The [Fed] rate hike was already priced in [and also from the] BSP following the August inflation print,” Ms. De Leon added.
Local inflation picked up to 6.4% last month due to higher food and oil prices. This was faster than July’s 5.7% and August 2017’s 2.6%.
Meanwhile, a bond trader said the rates submitted by dealers climbed, especially for the 91-day papers.
“As expected, the bids submitted were quite high so BTr was forced to reject bids on the 91-day [T-bills],” the trader said in a phone interview.
The trader said the market also factored in the weak peso.
The Treasury is raising P300 billion from the domestic market this quarter through auctions of securities, offering P195 billion in T-bills and another P105 billion in Treasury 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. — Karl Angelo N. Vidal

Paul McCartney scores US No. 1 after nearly 40 years

NEW YORK — Paul McCartney is back on the top of the charts, on Sunday earning his first solo number-one album in the United States in 36 years.
Egypt Station — a confident 16-track album in which McCartney experiments with a younger rock feel in addition to his classic Beatles sound — marked the first time that he has ever debuted as a solo artist on top of the benchmark US Billboard chart.
The English legend — who at 76 retains a hectic touring schedule — spared no promotional effort for the album, appearing on US late-night shows and livestreaming an invite-only concert inside New York’s Grand Central Station.
Surprisingly, McCartney did not replicate the feat in his native Britain, where Egypt Station debuted at number three, with veteran US rapper Eminem’s surprise album Kamikaze reigning for a second week.
Egypt Station sold the equivalent of 153,000 copies in the United States in the week since its release on Sept. 7, tracking service Nielsen Music said.
Unusually for a chart-topping album in recent years, virtually all of the sales were traditional purchases rather than through streaming or individually downloaded tracks.
McCartney, who last topped the chart as a solo artist in 1982 with Tug of War, achieved the second largest gap between number-one albums for any artist.
Johnny Cash holds the record with a break that was seven months longer than McCartney’s when the country great posthumously hit number one in 2006.
Since Tug of War, McCartney has also reached number one four times in the United States with Beatles anthologies. — AFP

BSP studying new tool to curb speculative FX trades

By Melissa Luz T. Lopez, Senior Reporter
THE BANGKO SENTRAL ng Pilipinas (BSP) is readying a new measure that would ward off speculative players in the foreign exchange (FX) market, as the regulator searches for new ways to quell sharp swings in the daily peso-dollar trading.
BSP Governor Nestor A. Espenilla, Jr. said the Monetary Board is currently studying a tool that would actively limit speculative currency trades, in a bid to reduce pressures on the peso.
“We’re looking at some other measures on the regulatory side to try to curb speculative activity,” Mr. Espenilla told reporters on the sidelines of a signing ceremony yesterday. “Pinag-aaralan pa, we want to understand better how to do it.”
In recent weeks, policy makers have been vocal about “excessive volatility” in the currency market and noted that these warrant close monitoring.
The peso has breached fresh 12-year lows this September as the local unit broke the P54-to-$1 level last week. The currency weakened anew to close at P54.11 on Monday.
Mr. Espenilla said they have seen increased speculative trades recently, which have been driving greater demand for the dollar to the detriment of the peso. These refer to knee-jerk dollar purchases without an underlying transaction where it will be used.
“It always happens. The market is very opportunistic so on news, they operate,” the BSP chief said, although refusing to give more details about the planned measure.
Mr. Espenilla said they are “rushing” the approval of these new rules.
“There are many things to look at. Documentation is one way to tell whether a transaction is speculative if there’s no underlying documentation,” he said. “A lot of the trades are NDF (non-deliverable forward contracts), and if there’s an NDF and there’s no documentation, what does that look like? Those are the things we are looking at.”
The BSP is also looking to put more teeth into the existing code of conduct for currency traders, with plans to make the rules binding and make traders accountable to the central bank.
Last week, the BSP also announced guidelines for the Currency Rate Risk Protection Program, where bank clients with foreign currency obligations worth at least $50,000 can hedge their exposures for exchange rate losses for a 90-day period.

DMCI Homes completes 1st building of Bristle Ridge ahead of schedule

DMCI Homes finished in August the construction of the first building of its Bristle Ridge condominium in Baguio City, and has started turn over of units to owners.
In a statement, DMCI said the Oakhill building of Bristle Ridge was completed nine months earlier than the May 2019 committed ready-for-occupancy schedule.
Bristle Ridge is a three-building, mid-rise development located along Padcal Road. This is DMCI Homes’ second residential condo in Baguio City, after Outlook Ridge Residences.
With a modern country theme, Bristle Ridge offers “an exclusive, secure, and relaxed living environment and the convenience of residing near commercial centers, schools, medical institutions and tourist spots.”
The project will have 374 units of one-bedroom, two-bedroom and three-bedroom units, ranging from 32 to 96.50 square meters (sq.m.). All units will have a balcony.
DMCI Homes said it allocated 5,183.3 sqm. of the 1.276-hectare development to open space “to keep the atmosphere calm and unhurried in the ever flourishing Philippine summer capital.”
Among its amenities include a lounge area, coffee shop, fire place, fitness gym, audio-visual room, game area, function hall, and al fresco area. It also has a roof garden, viewing deck, fire pit, play area and gazebo,
DMCI Homes, the property arm of DMCI Holdings, is known for building quality resort-inspired communities in Mega Manila, Baguio, Boracay, and Davao City.

AgriNurture forges deal to buy 2 million MT of rice from Vietnam

AGRINURTURE, Inc (ANI) announced on Monday that it had signed a $1-billion exclusive deal with Vietnam Southern Food Corp. (Vinafood II) to import 2 million metric tons (MT) of rice to the Philippines starting this year.
Vinafood II is a state-owned corporation designated by the government of Vietnam to export rice and help achieve food security in Southeast Asia.
The deal was granted an original proponent status last month. Under the joint venture agreement, it was proposed that the “consortium shall finance the supply of NFA rice with no cash out on the part of government.”
Both parties will jointly determine the origin, suppliers, delivery and arrival periods, packing and loading and discharging ports, while the NFA (National Food Authority) will determine the type of commodity to be imported, its specifications and quantity.
“As accepted by NFA, the ANI consortium will import as much as 500,000 metric tons of rice, equivalent to two weeks national inventory of subsidized NFA rice per quarter,” ANI said in a statement.
“Since NFA will not release a single peso for said purchases, the agency can use its budget to buy more palay from local farmers or import more rice as needed,” it added.
ANI has been engaged in rice importation and trading in the first quarter of 2015.
The NFA has been a subject of criticisms recently for failing to procure rice from local farmers, leading to a diminished supply of NFA rice in the market and the increased price of commercial rice.
According to NFA, instead of buying palay, it used its funds to pay maturing loans, which lawmakers said was a technical malversation of funds. — Reicelene Joy N. Ignacio

Predator slays competition at N.America box office


LOS ANGELES — The Predator — the latest installment in the long-running sci-fi action series — chewed up its rivals to debut atop the North American box office this weekend, industry data showed Sunday.
But the Fox reboot, which cost $88 million to make, will look to earn back some money in international markets, as its estimated $24 million haul did not meet expectations.
The movie, which comes more than 30 years after the franchise’s original film starring Arnold Schwarzenegger, courted controversy before its release when the studio cut a scene featuring an actor who was a registered sex offender.
Star Olivia Munn had requested the change, saying she was unaware of the actor’s past when the scene was filmed. Director Shane Black initially said he hired the actor because he was a friend, but later issued a strong apology.
Dropping to second place was last week’s top draw, horror movie The Nun — the latest fright fest in the popular Conjuring series. It earned an estimated $18.2 million in its second week, box office tracker Exhibitor Relations said.
Nun stars Taissa Farmiga — whose sister Vera headlined two Conjuring films — in a story about a young nun, an exorcist and a guide stumbling onto a dark secret deep in Dracula country: the Romania of 1952 — Transylvania, no less.
Opening in the third spot was A Simple Favor, a tale about a mommy blogger (Anna Kendrick) investigating the disappearance of her friend (Blake Lively). The Lionsgate film raked in $16.1 million on the back of positive reviews.
Matthew McConaughey’s new film White Boy Rick opened in fourth place with $8.8 million. The movie, based on a true story, stars the Oscar winner as the father of a teenage boy who became an informant for the FBI in the 1980s.
Glitzy rom-com Crazy Rich Asians, another Warner Bros. product along with The Nun, fell to fifth place. The film, with a nearly all-Asian cast led by Henry Golding and Constance Wu, took in $8.7 million, building on a crazy-good run.
Its North American take stands at nearly $150 million, with another $28 million earned overseas.
Rounding out this weekend’s top 10 were: Peppermint ($6.1 million); The Meg ($3.8 million); Searching ($3.2 million); Unbroken: Path to Redemption ($2.4 million); and, Mission Impossible — Fallout ($2.3 million). — AFP

Ayala hops on co-living space trend

AYALA LAND Inc. (ALI) is entering the co-living space business, as it opened The Flats Amorsolo in Makati City.
In a statement, ALI said the 15-storey building, located along Amorsolo Street, features co-living spaces catering to young urban professionals who are tired of their long commute to their offices in Makati.
“Ayala Land has always been responsive to the needs of young urban professionals who aspire for a perfectly balanced life. Co-living is an urban lifestyle concept that offers an affordable alternative to lengthy commutes and paying expensive transportation fares. We’re glad to announce that The Flats Amorsolo is now open,” Shiella Aguilar, ALI Makati project development head, was quoted as saying.
The Flats Amorsolo boasts of a central location in the business district, as it is within a five-minute walk to Ayala Avenue and near the Dela Rosa Walkway.
Co-living units are available for a six-month minimum lease term. Each unit can host a maximum of four occupants. There are also units designed for three or two occupants.
ALI said the units are designed for optimal space usage, with built-in beds, built-in cabinets, individual desk spaces, air-conditioning, a kitchenette, and an en suite toilet and bath with shower. Occupants are given an electronic key card.
The building also has a lobby and reception area with basic service shops. Parking spaces are also available for lease.
ALI said it is planning to open more co-living spaces in other areas in Makati and Bonifacio Global City to meet the growing demand. — CRAG

EDC allowed to extend tender offer period

ENERGY Development Corp. (EDC) has secured approval from the securities regulator on its request for exemptive relief from compliance with the 60-business day rule to complete its tender offer.
In a disclosure to the stock exchange, the Lopez-led renewable energy company said the approval from the Securities and Exchange Commission (SEC) allows the company to extend the offer period for 20 more business days from Oct. 22, 2018, “if an extension is necessary or desirable” to complete the tender offer.
EDC quoted the SEC’s letter as saying that the commission viewed “that under this situation extending the tender offer period is for the benefit of the Company’s shareholders. Thus granting the extension request is consistent with public interest and protection of investors.”
In August, EDC said it would conduct a tender offer for up to 2,040,006,713 common shares at P7.25 each that are held collectively by the public. The move is ahead of the company’s plan to delist from the stock exchange.
“The intention to eventually delist EDC was shared with the market last year and the tender offer that our board has approved today presents a meaningful opportunity for our minority shareholders to realize their investment prior to the delisting of the company, at a significant premium to the current share price,” EDC President and Chief Operating Officer Richard B. Tantoco stated.
On Monday, shares in EDC slipped by 0.14% to close at P7.06 each.

Green Book wins Toronto film fest’s top prize

TORONTO — Peter Farrelly’s dramatic comedy buddy movie Green Book, starring Mahershala Ali and Viggo Mortensen, won the Toronto International Film Festival audience prize on Sunday, making it a surprise Oscar contender.
The film follows a working-class Italian-American bouncer who takes a job chauffeuring an African-American classical pianist through the US South in the 1960s, because it is too dangerous for him to travel alone.
“I’m still reeling from the response to the film (in Toronto) so this is incredible,” Farrelly, who is best known for comedies Dumb and Dumber and There’s Something About Mary, said in a statement.
“This win is beyond my wildest dreams,” he said.
The film beat out Alfonso Cuaron’s Roma (second runner up) and Barry Jenkins’s If Beale Street Could Talk (first runner up) for the festival’s top prize.
Based on a true story, the film tells of Don Shirley (Ali), the well-dressed son of Jamaican immigrants who carries himself with the confidence of a prince, and speaks perfect English but is, according to a write-up by festival organizers, “not built for the brutal bigotry of his time.”
So he hires street-fighting, loud-mouthed Tony “Lip” Vallelonga (Mortensen) to accompany him on his journey, guided by the Negro Motorist Green Book to safe hotels and restaurants in the segregated South.
While delving into the heavy topic of US race relations, the film uses levity to dispel the foundations of prejudice and discrimination, as the traveling pair learn that people — black or white — aren’t so different from each other.
NEXT UP: THE OSCARS
The Toronto film festival is the biggest in North America and has traditionally been a key event for Oscar-conscious studios and distributors, as it is attended by a sizable contingent of media.
Given out since 1978 and based entirely on audience votes, its People’s Choice Award is a bellwether for the Academy Awards.
Seven past winners went on to win an Oscar for best picture: Chariots of Fire, American Beauty, Slumdog Millionaire, The King’s Speech, Argo, 12 Years a Slave, and Spotlight. Nearly a dozen more were nominated in the top category.
In contrast, Cannes’ coveted Palme d’Or has been an indicator of Oscar success only once in 1955 for Marty starring Ernest Borgnine.
This year’s Toronto audience prize winner beat out several films already generating Oscar buzz including Damien Chazelle’s Neil Armstrong biopic First Man, starring Ryan Gosling and Claire Foy, Steve McQueen’s feminist kick-ass heist movie Widows with Viola Davis, and Bradley Cooper’s directorial debut A Star Is Born with Lady Gaga.
The performances of Nicole Kidman in Destroyer, Steve Carell and Timothee Chalamet in Beautiful Boy, and Robert Redford’s swan song in The Old Man and the Gun have also been much talked about.
Toronto jury prizes also went to Free Solo for best documentary, Vasan Bala’s The Man Who Feels No Pain in the festival’s Midnight Madness category, Ash Mayfair’s The Third Wife for best new Asian film, Carmel Winters’ Float like a Butterfly, Guy Nattiv’s Skin, and The Fireflies are Gone (La disparition des lucioles). — AFP

Metrobank offers LTNCDs

Metrobank
METROPOLITAN Bank & Trust Co. is offering P5 billion worth of LTNCDs.

METROPOLITAN BANK & Trust Co. (Metrobank) started offering long-term negotiable certificates of time deposit (LTNCD) on Monday to diversify its funding sources.
In a notice published today, the bank said it is offering P5 billion worth of LTNCDs, with the option to upsize.
The notes being offered will mature in 5.5 years and will be sold in denominations of P50,000 and in increments of P10,000 thereafter.
The LTNCDs will carry a rate of 5.375% per annum to be paid quarterly.
The issuance constitutes the first tranche of its P25-billion LTNCD program approved by the central bank last July 19.
Metrobank said the sale is set to run until Sept. 28, with the issue date on Oct. 4. Both the offer period and issue date can be adjusted by the bank as it sees fit.
Standard Chartered Bank will serve as the sole lead arranger of the offer, which will be joined by Metrobank as bookrunners. The banks will also serve as selling agents alongside First Metro Investment Corp.
Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.”
In April, Metrobank Head of Invesor Relations Juan Placido T. Mapa III said the bank’s LTNCD program is part of its plan to diversify its funding sources.
“The proposed LTNCD program is part of our overall objective of diversifying funding sources and raising long term deposits,” Mr. Mapa told BusinessWorld in April, adding the bank has been issuing long-term notes regularly in the past few years.
To date, Metrobank has raised P26.65 billion through issuances of LTNCDs, with the latest offer in July last year, where it raised P3.75 billion.
A number of banks have been tapping the capital markets in recent months to raise more funds ahead of tighter risk management measures that will take effect on Jan 1, 2019 under the international Basel 3 standards.
Last week, Rizal Commercial Banking Corp. started to offer LTNCDs which will run until Sept. 21. The notes will also mature in five years and six months.
Other lenders such as Philippine Savings Bank, Robinsons Bank Corp. and China Banking Corp. have recently issued LTNCDs to support its funding needs.
Metrobank posted a P5.2-billion profit in the second quarter, up 31% from the P3.9 billion tallied a year ago on the back of its robust core business.
Metrobank shares closed at P68.90 apiece on Monday, climbing 30 centavos or 0.44%. — K.A.N. Vidal

How PSEi member stocks performed — September 17, 2018

Here’s a quick glance at how PSEi stocks fared on Monday, September 17, 2018.

 
Philippine Stock Exchange’s most active stocks by value turnover — September 17, 2018

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