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Ayala raises P8.07 billion from long-term investor’s placement

By Arra B. Francia, Reporter
AYALA CORP. (AC) raised P8.07 billion through a private placement from an institutional investor, bringing in fresh capital for the acquisition of properties or debt payment.
In a disclosure to the stock exchange on Monday, the listed conglomerate said it completed the sale of 8.81 million common shares at P916 apiece to a single long-term institutional investor.
The transaction was executed following approval from the firm’s executive committee.
The share price represents a 1.08% discount to the company’s 30-day volume weighted average closing price.
“We intend to use the proceeds to acquire properties or assets needed for the business of Ayala or for payment of debt contracted prior to the issuance of these shares,” AC said in the disclosure.
The private placement effectively hiked the company’s public float to 52.3% from 51.6%. AC said it will file an application to list the shares at the Philippine Stock Exchange (PSE) “as soon as practicable.”
Sought for comment, Philstocks Financial, Inc. Research Head Justino B. Calaycay, Jr. said the conglomerate may have chosen to raise funds through private placement to avoid the market’s current volatility.
“AC may have opted for this funding route given the prevailing conditions in the market where a public share offer may not generate sufficient interest, particularly at the price point indicated,” Mr. Calaycay said via text.
The PSE index has fallen steeply from its peak of 9,078 last January to as low as 6,929.86 last June 26, with market participants remaining on the sidelines as trading volume averaged to only P3.4 billion last week.
Analysts however are, saying the index may be close to a reversal of this trend, as the main index has been gradually testing the 7,400 resistance in the previous week.
AC is one of the country’s oldest conglomerates, and has core businesses in property development, banking, telecom, water, power, manufacturing, and automotives.
This year, AC programmed to spend P249 billion in capital expenditure, 44% higher than what it spent in 2017 to finance its investment program as well as real estate, telecom, and water utility units.
Its property unit, Ayala Land, Inc., (ALI) alone will be spending a capex of P111 billion this year, as it seeks to take advantage of the strong demand for residential projects. At the same time, ALI will be launching P125 billion worth of projects this year, 25% higher than what it launched in 2017.
AC’s net income attributable to equity holders of the parent grew 10% to P7.7 billion in the first quarter of 2018, after revenues went up by 17% to P70.29 billion during the period.
Ayala shares gave up P9 or 0.94% to finish at P951 each on Monday.

Do you want to be a K-pop idol? There is a contest for that

By Cecille Santillan-Visto
KOREAN POP idols are all the craze not just in Asia but worldwide — BTS headlined the 2018 Billboard Music Awards and even appeared on Ellen; Big Bang celebrated its 10th anniversary by guesting on CNN’s Talk Asia; and Korean music festivals featuring boy and girl groups are making the rounds of Europe and the Middle East. K-pop fame is indeed enticing — although the road to stardom is never easy.
Aspirants seize any opportunity that may result in a career-changing debut.
With this in mind, VIU, a regional video service, recently launched an original reality show that will show the journey of 10 Filipino contestants who aspire to become K-idols.
Hello K-Idol, which will be exclusively streamed on VIU, will follow 10 finalists as they undertake a 10-week challenge where they will hone their singing, dancing, and overall performing skills. Their webisodes (web-based episodes), which will be shown starting this month through September, will also document their styling transformation and teamwork. There will be additional episodes and behind-the-scene footage and extended profiles on the contestants.
Support cast will critique their performances but will also provide guidance to improve their craft.
Judges include singers Morisette Amon and Jinho Bae and Korean professional dancer Dasuri Choi. Kring Elenzano-Kim, herself a product of a reality TV show, will host.
K-idol-inspirations Yook Sungjae of the band BtoB and Jung Joon Young of 2 Days and 1 Night TV show fame, will also share their experiences with the contestants.
During a recent press conference, Arianne Kader-Cu, Viu Philippines Country Manager, said it has been the company’s dream to produce an online reality show.
“Reality shows are a dime a dozen on television, but with our first Viu Original in the country, we wanted to create something special by nurturing and honing Filipino talent with the help of their real-life idols on an international platform,” said Ms. Kader-Cu.
“With over 15 million Filipinos interested in Korean entertainment, we hope that they can relate and stand by the K-trainees in their journey to fulfilling their K-pop idol dreams,” Ms. Kader-Cu added.
Quark Henares, Head of Globe Studios, said Hello K-Idol will be different from traditional reality programs as viewers can watch it on demand through their mobile devices using the VIU app. VIU is available in 16 markets including Hong Kong, Singapore, Malaysia, India, Bahrain, Egypt, Jordan, and Saudi Arabia.
If the show proves to be a hit, Mr. Henares said they are considering an all-ladies lineup for the second season.
But do Filipinos have what it takes to be as successful as their highly trained and ultra-disciplined Korean counterparts?
“There are a lot of Asians working in the Korean entertainment industry and I don’t see any problems with Filipinos becoming K-pop artists,” said Mr. Jung, adding that tenacity is the most important quality of any K-pop idol wannabe.
For his part, Mr. Yook said Filipinos have proven that they can shine on the international stage. If they can learn from the stars who have made it big, he noted that they will have a fighting chance in the competitive K-pop arena.
VIU and Globe are also jointly promoting #PlayItRight and #ViuItRight in a bid to boost the campaign against anti-online piracy. They encourage netizens to support only legitimate online portals showing their favorite Korean shows.
The challenges set for the contestant will be difficult but a four-month, all-expense paid scholarship to learn K-pop vocals and dance at a prestigious entertainment school in Korea awaits the winner.
The ultimate champion’s quest will not end with Hello K-Idol as he has to test his talents against other K-pop hopefuls in Seoul. It will not an easy pursuit but at least the first few — and most difficult steps — have been taken.

RFM posts flat Q2 net earnings

RFM Corp.’s income was hit by higher commodity prices. — RFMFOODS.COM

RFM Corp. saw flat earnings growth during the second quarter of 2018, as softer prices of flour and higher costs of raw materials offset a double-digit increase in revenues.
In a regulatory filing, the listed food and beverage firm reported that its net income attributable to equity holders of the parent reached P314 million during the April to June period, 1.2% higher than the P310 million it posted in the same period a year ago.
Revenues for the quarter climbed 13% to P3.5 billion from the P3.1 billion in the same period a year ago.
This brought the company’s first-half attributable profit to P525 million, up by 3% year-on-year, on the back of an 11.6% increase in revenues to P6.31 billion.
RFM attributed the higher revenues to the performance of its ice cream, flour, pasta, milk, and private label products. Its ice cream brand Selecta, for instance, generated an 11% increase in sales, while institutional sales including the bakery business went up by 8%.
The company’s other brands, including Fiesta and Royal for pasta, White King Mixes and Selecta Milk, collectively grew by 17% in the first semester.
“The healthy growth of the branded consumer businesses brought about a 3% growth in net income to P525 million, despite the headwinds from softening prices of flour and the rise in commodity prices such as wheat, paper and sugar, as well as the peso depreciation,” RFM President and Chief Executive Officer Jose Ma. A. Concepcion III said in a statement.
Mr. Concepcion said the growth in pasta, ice cream and white milk units will protect the firm from the impact of higher commodity prices.
“We continue to focus on our core strengths in flour, pasta, ice cream and milk… in addition to the big ticket projects of the ice cream and flour segments, we continue to invest in additional warehousing capacity for more efficient supply chain operations,” he said.
The company earlier said it has committed to spend P1 billion in capital expenditures this year.
With the first half results, Mr. Concepcion expects the firm to deliver a double-digit top-line growth and high single-digit profit increase.
Incorporated in 1957 originally as Republic Flour Mills, Inc., RFM’s business is divided into two segments: the institutional segment for the flour, bakery, and other bakery products to institutional customers, and the consumer segment that manufactures and sells ice cream, milk, juices, pasta, and other rice-based mixes.
RFM shares closed unchanged at P4.65 each on Monday. — Arra B. Francia

The Gentle Sungjae

Fan Meeting
Paradise: 2018 Yook Sungjae
Fan Meeting in Manila

July 13, 2018, ABS-CBN Vertis Tent
YOOK SUNGJAE is only 1/7 of the Korean boy band BtoB (Born to Beat) but he is arguably the most popular member. Aside from his activities with the group, he has a flourishing acting career which shot up several notches when he joined the cast of blockbuster K-drama Goblin, and played the nephew of Gong Yoo from Train to Busan fame.
So when Viu Philippines announced that he would be holding his first fan meeting in Manila, there was a frenzy among his own fans as well as BtoB loyalists (called Melodies).
But the 23-year-old celebrity — who has performed in the Philippines at least four times with BtoB — came across as very humble and amiable despite his status as one of the most sought after K-pop idols.
He was the first Korean star to hold a fan meeting at the Vertis Tent in Quezon City. The venue was the perfect size — big enough to accommodate over 1,000 fans, but small enough to feel his presence.
Sungjae opened his fan meeting by singing “Paradise,” which he composed and was released as one of two songs in the 2017 digital single project, Piece of BtoB. Pitch-perfect, easy on the ears, and looking crisp in a gray and black ensemble, Sungjae sang effortlessly, definitely impressing the fans who paid good money to see him.
Salamat sa pagpunta kahit malakas ang ulan sa labas (Thank you for coming despite of the heavy rains),” was his greeting to his supporters, adding that he wished “sama-sama tayo palagi (We should always be together).”
The All the Butlers actor said he tried to learn Filipino to better communicate with fans, but he joked that he also has a few Visayan phrases up his sleeve. He said that he went to Cebu years back to learn English, which is why the Philippines is close to his heart.
As expected, he played some games with his fans, giving advice to select fans on some of their personal concerns, and testing them on who knows the most about him. He cutely apologized to every eliminated contestant — it was obvious that he wanted them all to win. Winners were treated to selfies with him and one lucky fan even went home with a voice recording on her mobile phone.
Sungjae also sang “Beautiful,” from the official soundtrack of Goblin, and his version is comparable with the original sung by Crush.
The stage was sparse with only an LED display as a backdrop, on which his videos and K-drama clips were shown. Kring Elenzano-Kim made the fan meeting more interesting with her lively hosting.
The We Got Married’s virtual husband carried the whole show perfectly. He promised to return to the Philippines with the rest of the BtoB members, hopefully in a long-overdue concert. Their last scheduled group show in Manila was cancelled at the last minute.
“This fan meeting is unforgettable for me but I hope to bring my members next time,” he said.
During the “hi-touch” (where he does high fives with the fans) and photo sessions, the School 2015 lead was visibly open to his fans and even took time to briefly chat with them.
He was later quoted as telling his manager and production staff that he should have been informed beforehand that he had a PWD (person with disabilities) fan present — he would have personally greeted her where she was seated instead of her having to come up on stage.
Gentle Sungjae certainly won the Philippine Melodies’ hearts. — Cecille Santillan-Visto

Colliers sees more office spaces in Bay Area by 2021

By Arra B. Francia, Reporter
THE MANILA BAY Area is expected to grow its total office stock by 130% by 2021, as tenants look for alternative locations given the lack of office spaces in Metro Manila’s two leading business districts.
This is according to real estate consultancy firm Colliers International Philippines, which noted that construction activities at the Manila Bay Area will result in an increase in office stock to 930,000 square meters (sq.m.) in the next three years, from 400,900 sq.m. at the end of 2017.
“At present, office space vacancies in Makati Central Business District (CBD) and Fort Bonifacio hover between 2% and 3%. This compels locators to look for alternative locations such as the Manila Bay Area,” Colliers Philippines Director for Landlord Representation Andrew Gomez was quoted as saying in a statement.
Colliers said the demand was coming from both business process outsourcing (BPO) and non-BPO firms, which look to take advantage of the Manila Bay Area’s proximity to the Ninoy Aquino International Airport. The rising business district is also easily accessible to other business districts in the metropolis.
Around 20% of total transactions in Metro Manila came from the Bay Area in the first half of 2018 alone, making it one of the primary drivers for the metro’s office market.
With the increased demand for spaces in the area and low vacancy at 2%, prices at the Manila Bay Area have shot up by eight to 10% during the second quarter, hovering between P700 to P1,500 per square meter. This is comparable to rental rates in the Makati CBD and Fort Bonifacio, which commanded rates of P800-P1,800 and P850-P1,500 per sq.m., respectively.
Illustrative of the demand for offices in the Manila Bay Area is Federal Land, Inc.’s iMET BPO building inside the Metro Park development. Colliers noted that iMET is now 100% occupied, with an outsourcing firm, a logistics company, and a state-led firm as some of its tenants.
Newly listed company D.M. Wenceslao & Associates, Inc. also has 352,890 sq.m. worth of leasable or saleable properties in its mixed-used estate in the Bay Area called Aseana City. The company is spending P11 billion until 2020 for the development of more properties in the area, banking on rising demand not only for office spaces but also residential and retail projects.
DoubleDragon Properties Corp. also recently unveiled its office project in the Bay Area called DD Meridian Park, providing 130,000 sq.m. of leasable space through the first of the development’s four phases. The company was able to lease 97% of the building at the time of its launch last May.

Micab accuses Grab PHL of ‘phantom’ booking attacks

MICAB SYSTEMS Corp. said the alleged fake bookings have reached 29,000. — WWW.MICAB.CO

By Denise A. Valdez
LOCAL ride-hailing company Micab Systems Corp. is accusing Grab Philippines (MyTaxi.PH) of sending “phantom” bookings, or fake bookings that reached up to 29,000 since June.
“From our 29,000 phantom bookings, we’ve received over several hundred reports of Grab soliciting our taxi drivers to attend their driver orientations. This is our single most compelling piece of evidence pointing to them as the culprit of the phantom bookings,” Micab chief executive officer Eddie F. Ybañez told BusinessWorld on Monday.
“Grab’s phone calls occur a few minutes after a phantom booking and they contact the driver via the phone number they registered with Micab, which would have been difficult to obtain any other way,” he added.
Mr. Ybañez said their data shows the SIM numbers used to book the rides are sequential, which means these were probably bought in batches and the bookings come from a single entity.
“Our drivers are less keen on accepting rides as they may end up being phantom bookings, which wastes their gas, squanders their time and even jeopardizes their safety, as they end up idling in what are often very remote locations for a significant period of time,” he noted.
Grab Philippines later shared its official statement dated July 27. Allegations of phantom bookings have been a cause of police investigation in Singapore, after Grab competition RYDE Technologies reported similar experiences. [See: Grab denies fake bookings, warns Micab]
RYDE said in a statement on June 28 it was able to trace the source of its fake bookings, pointing to IP addresses in Midview City and The Herencia, two locations in Singapore where Grab is located.
Mr. Ybañez said Micab was set to meet with the RYDE team on Monday afternoon to discuss the issue.
He added there’s a “huge possibility” they will take legal action if Micab continues to receive bogus bookings.
“Our legal team is assessing the data we have, (including) interviews from the drivers for the poaching,” Mr. Ybañez said.
Aside from Micab, another transport network company told BusinessWorld last month of similar frequent booking cancellations.
Owto chief executive officer Joel M. Gayod said that since it started operations in May, it once was able to receive 50,000 booking attempts which it could not guarantee to all be valid bookings.
“Apparently there’s an effort…to crash the system (of Owto) to destroy the confidence of the drivers. May nakita kaming mga patterns, it’s coming from a number na ibu-book si driver, kapag malapit na, ika-cancel (We’ve observed patterns coming from a number that would book a driver, and when the car is near the pickup point, would cancel the booking),” he said.
Still, Mr. Gayod did not identify who he thinks may be causing the fake bookings.
(This article was updated to include Grab Philippines’ official statement.)

Loving Celine Dion even more

By Michelle Anne P. Soliman, Reporter
Concert Review
Celine Dion Live 2018
July 19, SM Mall of Asia Arena
IT WAS a weekend morning in the late 1990s when a familiar piano introduction (in C major) blared into the room and woke this writer (who was then probably in kindergarten) from her sleep. “I know this song. I’ve heard it before,” I thought. I got up and hurried to the shelf beside the stereo system (where Dad would usually place his newly purchased CDs) and saw an album cover with a woman wearing a white shirt and denim pants, her hair in a pixie cut. The singer’s voice was captivating. From then on, I continued to listen to her songs — playing them loud and singing along as if it were a live concert.
On the windy and cold evening of July 19, the memory of listening to those songs came back. Only, it was not with a record, but the live, powerful, and signature vocals of Celine Dion.
The show began at 9:10 p.m. The crowd cheered as she sang “The Power of Love” (a Jennifer Rush original) and entered center stage in a bedazzled gold suit.
Ms. Dion continued with her 1999 single, “That’s the Way It Is” from the greatest hits album, All the Way…A Decade of Song.
After the song, Ms. Dion stood in awe of the cheering crowd. “We finally made it,” she said, referring to her aborted visit to the Philippines in 2014 — she had to cancel that concert due to the deteriorating health of her husband and manager, René Angélil. So this year she made her first visit to Manila, as part of the Celine Dion Live 2018 tour.
Ms. Dion went on and told the crowd that she did not know why her visit took a while. “I guess I live too far,” she said, and expressed her gratitude for Filipinos support of her music over nearly three decades.
She ended the first segment of the show with “I’m Alive” (A New Day Has Come, 2002) and an audience sing-along to “Because You Loved Me” (Falling into You, 1996).
The evening continued with hits such as “It’s All Coming Back to Me Now,” and the movie themes such as “Beauty and the Beast” from Disney’s Beauty and the Beast (1991) which launched the singer’s international breakthrough; and “Ashes” from Deadpool 2 (2018).
Ms. Dion, now in a multi-colored fringe dress, also showcased a versatile side, performing a salsa dance while singing “Falling into You” at the same time.
The second hour of the show continued with a repertoire that transitioned to ballads.
Ms. Dion recalled the experience of coping with the loss of her late husband with a heartfelt performance of “Recovering,” a song written by American singer Pink.
The crowd fell quiet upon hearing the first bars to the Eric Carmen original, “All by Myself.” It felt as if the crowd silently anticipated the 15-second sustained high note which Ms. Dion hit flawlessly. As for this writer, I was in awe to finally hear and witness the power ballad performed live.
Afterwards, the mood eased with a performance — featuring a the string quartet — of Janis Ian’s “At Seventeen,” (1975) followed by “A New Day has Come,” (2002), and “Unison” (1990).
When Ms. Dion and the violinist remained downstage, the faint sound of the instrument gave a hint that “To Love You More” was the next song. And it was. It was sung as seamless as the live performance that frequented the music channel charts in 2003.
Towards the end of the show, the show shifted to a more upbeat atmosphere as neon lights filled the stage. Ms. Dion (in a silver dress with neon pink accents) performed rendition of Prince’s 1986 hit, “Kiss.” The show mellowed for a while with “Purple Rain,” and concluded with an energetic performance of “River Deep, Mountain High” (a Tina Turner original).
A momentary stage blackout kept the crowd cheering for more. It did not take long before the band began the first bars to James Horner’s “Hymn to the Sea” from the Titanic soundtrack. The darkness suggested the atmosphere of being adrift, and the crowd held up their smartphone flashlights, illuminating the arena like stars.
Reappearing in a white floor-length gown with a pink drape, Ms. Dion stood out from the cool sea blue stage lighting. The much-awaited performance of the award-winning “My Heart Wil Go On” was superb.
The crowd cheered unceasingly even as the singer and her band took their final bows. Ms. Dion became emotional and stood still for a moment, as if not wanting to exit the stage. She expressed her gratitude through singing Elvis Presley’s “Can’t Help Falling in Love” acapella, the crowd singing along.
When the lights dimmed a final time and the singer exited the stage, I remembered one of her earlier statements: “That’s all I know. That’s all I’ve been doing — singing.”
And with Ms. Dion’s powerful voice, that is all she needs to do.

Gov’t fully awards T-bill offer on strong demand

By Karl Angelo N. Vidal, Reporter
THE GOVERNMENT made a full award of the Treasury bills (T-bill) it auctioned off on Monday, with rates on the longer tenors rising following the hints of a fresh rate hike from the central bank chief.
The Bureau of the Treasury (BTr) borrowed P15 billion as planned at its T-bills auction yesterday.
The offer was twice oversubscribed as total tenders amounted to P32.9 billion, climbing from the P28.2 billion recorded at last week’s offering.
Broken down, the government borrowed P4 billion as planned via the 91-day tenor yesterday as tenders by investors totalled P10.431 billion. The average rate declined 7.2 basis points to 3.219% from the 3.291% logged in the previous auction.
For the 182-day T-bills, the BTr borrowed the programmed P6 billion out of the P8.996 billion offered by banks and other financial institutions. The average rate picked up by five basis points to 4.235% from the 4.185% tallied in the previous offering.
The Treasury also made a full award of the 364-day papers as it raised P6 billion as planned out of the total offers amounting to P13.489 billion. The average yield likewise rose by 4.2 basis points to 4.809% from last week’s 4.767%.
At the secondary market prior to the auction, three-month and six-month papers were quoted at 3.2354% and 4.3675%, respectively, while the one-year securities fetched a 4.6467% yield.
At the close of the trading, the 91-day T-bill saw its rate climb to 3.2905%, while the 182-day papers rallied to yield 4.2212%. The 364-day tenor also slipped to 4.6465%.
Following the auction, National Treasurer Rosalia V. De Leon said the bureau saw good results amid healthy market appetite.
“We had a full award for all tenors during the auction and we saw rates that we anticipate and are ready to accept,” Ms. De Leon told reporters on Monday.
She noted that the auction came after the “very strong” pronouncement by the Bangko Sentral ng Pilipinas (BSP) for a possible interest rate hike next month.
“Maybe this is coming from the very strong pronouncement of the BSP governor last Friday…about the very strong action to taken to temper inflation expectations and bring back to the inflation path particularly next year.”
On Friday, BSP Governor Nestor A. Espenilla, Jr. said the central bank is considering another interest rate hike as early as next month to quell inflation expectations.
“Let me say that the BSP is considering strong follow-through monetary adjustment at the next meeting of the Monetary Board in August,” Mr. Espenilla said in a speech.
The central bank chief added that the sustained pressures on the peso could adversely affect inflation, although they believe the country’s fundamentals are “strong and healthy.”
The government reported earlier this month that headline inflation accelerated to a fresh five-year high of 5.2% in June, faster than the 4.6% logged the previous month as well as estimates from the BSP and the Department of Finance.
The monetary authority has already raised its rates twice this year. Rates now stand at a 3-4% range.
“The market should now take [the pronouncements of the BSP] more seriously. The market has always been saying that [the BSP] is behind the curve, but I think there is more stronger communication being made by the central bank,” Ms. De Leon said.
She added that revenues of the Bureau of the Internal Revenue and the Bureau of Customs will likely be “sustained,” which means the government is not under any pressure to borrow at high rates.
“We are now in a very good position to calibrate our borrowings given that the performance of the two agencies will allow us to be able to…not accept bids at outrageous rates if ever that would be offered by the market.”
Meanwhile, a trader said the auction results were within expectations except for the three-month papers, as the rate for the tenor declined more than expected.
“Given the good rates offered by the dealers, the Treasury decided to fully award the bids,” the trader said in a phone interview.

Atos buys Syntel in $3.4-B US push for Amex, FedEx

ATOS SE agreed to buy Syntel, Inc. in a $3.4-billion cash deal to boost the French computer-services provider’s US access, to customers including financials like American Express Co. and State Street Corp.
At $41 a share, the transaction is also a way for acquisitive Atos to bounce back from a rebuffed bid 8 months ago on Gemalto NV, which secures digital payments for banks and other clients. The per-share figure is 4.8% more than Syntel’s closing price of $39.13 on July 20. The total price is $3.57 billion including Syntel debt, the companies said Sunday in a statement.
“We’ve just acquired a massive booster to our US business and to our digital business,” Atos Finance Chief Elie Girard said in a call with reporters on Monday. As a French company reinforcing its presence in the US, “we’re absolutely not worried about trade — our industry is not on the radar as a target of trade wars,” he said.
Shares in Atos rose as much as 3.5% in Paris trading.
Syntel’s top three customers — American Express, State Street Bank and FedEx Corp. — accounted for 45% of its revenue last year, and only about 11% of sales came from outside of North America, according to an annual report. While the company gets most of its revenue from the US, the bulk of its 23,000-person workforce is in India.
Atos said it expects the deal to close by year-end, adding to earnings immediately and providing “double-digit accretion as early as 2019” excluding transaction costs and goodwill. The boards of both companies approved the transaction on July 20 and Syntel shareholders holding 51% of the stock, including founders, pledged to vote in favor, according to a statement.
“We see potential for synergies on sales as well as margins,” Girard said. The acquisition price is about 14.7 times Syntel’s earnings before interest and taxes over the past 12 months, before taking synergies into account, he said.
While Atos’s market capitalization of €13.2 billion ($15.4 billion) is almost five times that of Syntel, the American company’s shares have been growing faster. Syntel shares have doubled in the past year, while Atos is little changed.
Atos on Monday also reported earnings for the second quarter and confirmed its full-year targets.
Syntel’s net revenue has dropped for the past two years, including a 4.4% decline to $923.8 million in 2017. The company has global development centers in India, Scotland, Poland and the Philippines, with 76% of its billable workforce located in India, according to Syntel’s annual report.
The transaction will be financed with debt underwritten by BNP Paribas SA and JPMorgan Chase & Co. Atos plans to hold a conference call on July 23 at 8 a.m. Paris time to discuss the transaction. — Reuters

New office offers a glimpse of the country’s future


By Bjorn Biel M. Beltran, Special Features Writer
THE PHILIPPINES’ Information Technology and Business Process Management (IT-BPM) sector has come a long way since the country overtook India as the global leader for voice-based services in 2010. As the country’s best-performing sector for the past four years, as well as the biggest employment generator according to government records, the IT-BPM industry has seen much talk trying to envision where it is headed next.
What else can the country offer the world?
In unveiling its newly renovated headquarters in Bonifacio Global City, Taguig, the Information Technology and Business Process Association of the Philippines (IBPAP) is trying its hand at answering just that. The office — often the site of meetings between the industry’s representatives and its stakeholders in the private and public sector, as well as with potential investors and locators — aims to feature the best of Filipino culture and highlight the creativity of its people.
“It’s a snapshot of the Philippine IT-BPM industry in one office,” IBPAP President and CEO, Rey E. Untal said of IBPAP’s newly redesigned workplace.
Mr. Untal noted that the office, which was finished late last year, seeks to capture the essence of the image that the country is trying to project to the global market.
“Now more than ever, you will find key figures from the different subsectors of the industry coming together and collaborating under one roof. When we host visitors, as well as locators, this will be their window to the Philippines. This is the first impression that they will get.”
Different areas of the office highlight a certain design feature and Filipino motifs. Traditional hand-woven mats called banig and indigenous fabrics t’nalak and hablon, and even coconut husk fabric are used as accents and wall decorations.
“As the organization that represents the entire IT-BPM industry, we wanted the new office to give visitors a glimpse of what Philippines is all about — the home of human and tech. The use of indigenous materials and local patterns were incorporated against the sleek, modern design of the office to reflect this synergy,” Mr. Untal added.
For the office renovation, IBPAP partnered with business consulting company, DTSI Group. The vision was to make IBPAP’s headquarters not only showcase local culture but be the office of the future — offering an efficient, non-typical working environment with open and shared workspaces.
“We are currently seeing massive technology developments affecting the industry. The Office of the Future features strategically located and well-designed workspaces that improve productivity, foster creativity, and promote a healthy organizational culture,” Mr. Untal said. “Our staff are free to sit anywhere they want — from desks to benches to high bar tables. We want them to be able to openly interact with every member of the team which is why we made an entire space that encourages interaction, collaboration and productivity.”
The move is in line with IBPAP’s Philippine IT-BPM Roadmap 2022, which seeks to accelerate growth of the country’s IT-BPM industry by strengthening domain expertise and capabilities in the emerging sectors, leveraging advancements in technology and ensuring the Filipino talent is future ready with high value skills.
Among the goals of the road map is to create 1.8 million direct jobs, in addition to the 7.6 million Filipinos employed either directly or indirectly by the IT-BPM industry, and bring in an estimated $40 billion in revenue by 2022.

HK property bears rear their heads (yet again)

HONG KONG’S property market has a habit of humbling the bears, shattering predictions that the laws of gravity must eventually prevail.
But now, a crosscurrent of headwinds — from a slowing Chinese economy to upcoming interest-rate hikes and a reinvigorated regulatory push to tame home prices — have emboldened some long-standing skeptics to renew calls that a correction could be imminent. Citigroup, Inc. last week called time on the party, predicting a 7% second-half slide, and Bocom International Holdings Co.’s Hao Hong sees the possibility of a decline of more than twice that.
“Property stocks are telling you that the correction is coming,” Hong said, citing equity declines as a leading indicator. “I won’t be surprised to see prices coming down 15% in the coming months.”
It isn’t a foregone conclusion that the world’s least affordable property market will come crashing down. In a place where flats the size of two parking spaces sell for north of $1 million, buyer exuberance has swept away all pessimistic forecasts. But government efforts to tackle sky-high prices are suddenly getting help from an array of external forces, including Donald Trump’s push to tackle Chinese trade practices he calls unfair.
For Citigroup analysts including Ken Yeung, a 13% gain in prices in the first half has increased the risk of a correction in the second, while an economic slowdown in China could serve as a trigger. Nomura Holdings, Inc. is sticking with its forecast for prices to be flat for the year — indicating a slide in the second half — while Bank of America Merrill Lynch sees a 10% to 20% correction in 2019-2020.
Hong Kong’s property bears have been wrong before. Citigroup’s analysts have made three bearish calls from November 2016 only to watch as prices advanced by 30%. And many analysts see no meaningful impact from higher interest rates any time soon, especially when real rates remain negative because of inflation, fueling buyer enthusiasm. Mortgage rates at historic lows and a supply shortage that the government can’t solve quickly may also cushion any market declines.
Still, there are other risks this time around, including an escalating trade dispute that could roil global economies and exacerbate a slowdown in China.
“We are most concerned about the implication of a trade war,” said Simon Smith, who heads Savills Research & Consultancy in Hong Kong. “It would ravage the global economies, particularly China, which has an implication for valuations and stock market indices, and will finally have an impact on the housing market in Hong Kong.”
Government cooling measures such as the vacancy tax will only amplify the scale of any slump, according to Denis Ma, head of research at Jones Lang LaSalle, Inc. If approved by lawmakers, Lam’s proposal will require apartments left unsold for more than six months to be taxed at twice the annual rental income, or about 5% of the unit’s value.
“There isn’t going to be any soft landing with these measures in place,” Ma said.
The city’s prime rate, which sets the upper limit on mortgages, is poised for the first increase in a decade. That could deflate demand from first-time buyers, predicted Ryan Lam, head of research at Shanghai Commercial Bank Ltd.
“It will end up becoming home exchanges between existing owners,” Lam said. “When people realize there’s only current players and no newcomers, the sentiment might overturn.” — Bloomberg

BSP OK’s Metrobank’s P25-B LTNCDs

METROPOLITAN Bank & Trust Co. (Metrobank) received central bank approval to issue P25 billion worth of long-term negotiable certificates of deposit (LTNCD) to diversify its funding sources.
In a disclosure to the local bourse on Monday, the Ty-led lender said the Bangko Sentral ng Pilipinas has approved the bank’s plan to issue peso-denominated LTNCDs of up to P25 billion as okayed by its board of directors in April.
The capital raising activity will be done in one or more tranches of at least P2 billion per tranche with tenors of 5.5 years up to 10 years, the lender said.
The issuance of the LTNCDs will be subject to market conditions. The issued long-term papers will be listed on the Philippine Dealing & Exchange 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 Investor Relations Juan Placido T. Mapa III said the LTNCD issuance is part of the bank’s 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 one in July last year, where it raised P3.75 billion.
In April, Metrobank completed a P60-billion stock rights offer, selling 799.8 million common shares at P75 apiece.
Proceeds from the rights offering were set to be used for loan expansion across the various segments of the economy, as well as the acquisition of the remaining stake of ANZ Funds Pty. Ltd. in credit card provider Metrobank Card Corp., thereby fully owning the credit card issuer.
Other lenders are embarking on fundraising exercises to boost their capital and expand their businesses. UnionBank of the Philippines, Inc., BDO Unibank, Inc., Security Bank Corp., East West Banking Corp. China Banking Corp. and Robinsons Bank Corp. have also issued LTNCDs this year.
Metrobank posted a net income of P5.2 billion in the second quarter, 31% higher than the P3.9 billion recorded in the same period last year, on the back of its robust core business.
Shares in Metrobank closed at P72.90 apiece on Monday, climbing P2.90 or 4.14%. — Karl Angelo N. Vidal

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