Shares edge higher on MSCI index rebalancing

September 1, 2017 | 12:01 am

THE MAIN INDEX posted an uptick on Thursday on the back of adjustments in the MSCI index, even as the market continued to stay on the sidelines due to the lack of catalysts.

The bellwether Philippine Stock Exchange inched up by 0.02% or 1.84 points to 7,958.57 yesterday.

The all-shares index also rose 0.02% or 1.27 points to 4,723.27.

“If you notice the (value) of P11.1 billion, it’s mainly because of the MSCI rebalancing which resulted into a significant volume from select companies like Security Bank [Corp.] and there is also a huge cost on AEV (Aboitiz Equity Ventures, Inc.) so the two companies resulted to about P4 billion,” said Lexter A. Azurin, senior equity analyst at AB Capital Securities, Inc.

However, in general, the main index still traded sideways due to the lack of catalysts, according to Mr. Azurin.

“The market is still stuck in neutral considering the short trading week,” PNB Securities, Inc. President Manuel G. Lisbona said in a text message.

“We’re still within ghost month so I think that’s one of the reasons why we’re still seeing negative activity, excluding today,” AB Capital’s Mr. Azurin said on Thursday.

Sector counters were mixed. Mining and oil climbed 0.76% or 101.15 points to 13,253.94; financials rose 0.51% or 10.22 points to 1,988.64; and services went up 0.36% or 6.2 points to 1,721.09.

On the other hand, industrials dropped 0.27% to 29.96 points to 10,995.17; property fell 0.20% or 7.49 points to 3,720.80; and holding firms declined 0.17% or 14.04 points to 7,838.11.

Value turnover stood at P11.26 billion from Wednesday’s P5.87 billion, with 1.04 billion issues changing hands.

“Value turnover is significantly higher which is reflective of investor positioning ahead of inflation data out next week,” PNB Securities’ Mr. Lisbona said.

Advancers beat losers, 101 to 84, while 63 names were unchanged.

Foreigners turned buyers with net purchases of P426.13 million, a reversal of Wednesday’s net selling worth P55.91 million.

Most Southeast Asian stock markets also edged up on Thursday, in line with Wall Street and broader Asia, as upbeat Chinese and US economic news boosted investor sentiment, even as tensions over North Korea stewed in the background.

For the month of August, the Chinese manufacturing sector clocked an unexpected growth, with the official Purchasing Managers’ Index released on Thursday standing at 51.7, up from the previous month’s 51.4.

The US Commerce Department said on Wednesday that its second estimate of gross domestic product showed that the economy grew at an annual 3% in the second quarter, the quickest in more than two years. — JCL with Reuters

SEC junks Platinum Group appeal to reopen complaint vs Oriental Peninsula

September 1, 2017 | 12:01 am

THE Securities and Exchange Commission (SEC) has rejected the appeal of Platinum Group Metals Corp. (PGMC) seeking the revival of its complaint against Oriental Peninsula Resources Group, Inc. over its alleged misrepresentation of its business activities in the registration statement filed for its initial public offer in 2007.

The corporate regulator sitting en banc decided on the case on Aug. 17, acting on an appeal against the initial decision of its Corporation Finance Department (CFD).

To recall, the PGMC filed in December 2007 a complaint against the listed firm alleging that it misrepresented subsidiary Citinickel Mines and Development Corp.’s ownership of nickel mining projects as well as interests in such activities, adding that Oriental failed to mention the valid and effective operating agreement between the two parties.

PGMC’s complaint further said that the company ”cannot operate the subject mining area because of an existing Writ of Preliminary Injunction; that Oriental is misleading the public in their Determination of the Offer Price by using false of inaccurate assumptions; and that Oriental omitted to mention material cases affecting the rights of Citinickel to the mining areas in the Municipalities of Espanola and Narra in Palawan.”

Oriental’s registration statement specified plans to bid out 300 million shares to the public through a maiden offer, with a price range set between P1.98 to P2.98 per share.

The CFD then dismissed the complaint for lack of merit, noting that Oriental was able to properly disclose material legal proceedings in its registration statement. The SEC unit also said that Oriental was able to present the risks of investing in the firm, and that it did not make any false representations or assumptions in the valuation of its offer price.

In the decision penned by all SEC commissioners and Chairperson Teresita J. Herbosa, the regulator said that PGMC’s appeal had no merit.

“Going through the Platinum’s (PGMC) memorandum of appeal, it merely reiterated the facts and arguments that it previously raised in the proceedings before CFD,” read the decision.

Oriental has been able to list its shares on the Philippine Stock Exchange despite PGMC’s complaint.

Oriental reported a net income of P374 million in the first semester of 2017, against the net loss of P4.45 million in the comparable period last year.

Shares in Oriental closed at P1.13 each on Thursday, five centavos or 4.63% higher than the previous trading day. — Arra B. Francia

Lack of REM sleep tied to increased risk of dementia

September 1, 2017 | 12:01 am

PEOPLE WHO spend less time in deep, rapid eye movement (REM) sleep may be more likely to develop dementia than individuals who get better quality rest, a recent study suggests.

Patients with dementia often have difficulty sleeping, but previous research has offered a mixed picture of which comes first – the cognitive decline or the sleep deficit.

For the current study, researchers examined data from overnight sleep studies for 321 adults age 60 or older who didn’t have dementia. After an average follow-up of 12 years, 32 people developed dementia.

Each percentage reduction in the time people spent in REM sleep was associated with a 9% increase in the risk of dementia, researchers report in Neurology.

“We observe an association between sleep and dementia but cannot determine whether reduced REM causes dementia,” said lead study author Matthew Pase of Swinburne University in Australia.

“It is unclear whether increasing REM sleep reduces dementia risk,” Pase, who did the research as part of the Framingham Heart Study at Boston University, said by e-mail. “However, good quality sleep is clearly important for overall health and well-being and the emerging picture suggests that sleep and dementia may influence each other.”

Overall, study participants spent about 20% of their sleeping time in REM sleep, the sleep analysis found. But the subset of people who went on to develop dementia spent only 17% of their sleep time in REM sleep.

Out of all the dementia cases found in the current study, 25% occurred within the first 6.6 years of follow-up. The total included 24 instances of Alzheimer’s disease, the most common form of dementia.

Reduced REM was associated with similar increases in the risk of both Alzheimer’s and other dementia cases.

Researchers also looked at what’s known as sleep latency, or how long it takes to fall asleep, and didn’t find this related to the risk of developing dementia.

The study is small, and the results would need to be confirmed by more research in larger groups of people, said Dr. Eric Larson, vice-president for research at Kaiser Permanente Washington and a professor at the University of Washington in Seattle.

But that doesn’t mean people should ignore the importance of REM sleep.

“REM sleep is considered the part of the sleep cycle where our brains get rejuvenated,” Larson, who wasn’t involved in the study, said by e-mail. “It’s considered the best part of sleep from a perspective of gaining the rest that restores well-being.”

Other research has linked both insomnia and a nighttime breathing disorder known as sleep apnea with an increased risk of dementia, noted Dr. Kristine Yaffe, a psychiatry and neurology researcher at the University of California, San Francisco who wasn’t involved in the study.

“This adds to the growing science that sleep health or quality is related to brain health,” Yaffe said by e-mail. “It is important to tell your doctor about concerns about your sleep and follow good sleep hygiene practices.” – Reuters

SOURCE: bit.ly/2xMYjve Neurology, online Aug. 23, 2017.

Lacson to Faeldon: Don’t divert the issue from corruption in BoC

September 1, 2017 | 12:01 am

SENATOR PANFILO M. Lacson has shrugged off accusations against his son made by former Bureau of Customs Commissioner (BoC) Nicanor E. Faeldon, who was officially replaced this week amid the controversy over a P6.4-billion shipment of shabu (methamphetamine). Mr. Faeldon has accused the son of the senator, Panfilo “Pampi” Lacson, Jr., of smuggling cement through the BoC. He said the younger Mr. Lacson’s company, Bonjourno, is the country’s number one smuggler of cement. “He’s diverting from the issue. The issue is, is there corruption in the BoC? That question should be answered,” Mr. Lacson said in a statement issued yesterday. At the same time, the senator pointed out that Mr. Faeldon’s accusation that his son has been undervaluing cement imports has no basis as there is zero tariff for cement under the ASEAN Free Trade Area and even the ASEAN-China Free Trade Area.” What will you undervalue if there is zero tariff?” Mr. Lacson said. The matter on the illegal drug shipment is currently under investigation by the Senate Blue Ribbon Committee. — Mario M. Banzon

What to see this week

September 1, 2017 | 12:01 am

3 films to see on the week of September 1-8, 2017

Love You to the Stars and Back
A STAR CINEMA romantic comedy, directed by Antoinette Jadaone, Love You to the Stars and Back follows a girl who is on a road trip to look for aliens. She gives a boy she bumps into a free ride to his destination, and they embark on a journey of adventures and misadventures, not knowing they would fall in love. It stars Joshua Garcia and Julia Barretto.

MTRCB Rating: PG

The Battleship Island
A FILM set during Korea’s Japanese occupation, it is about an attempted prison break by Korean conscripts from a forced labor camp on Hashima Island. Directed by Seung-wan Ryoo, it stars Jung-hyun Lee, Jung-min Hwang, and Su-an Kim. “While Battleship Island is sometimes unpleasant to watch, it is a consistently involving, atypically thoughtful crowd-pleaser,” writes Simon Abrams of RogerEbert.com.

MTRCB Rating: R-16

The Crucifixion
WHEN A PRIEST is jailed for the murder of a nun on who he was performing an exorcism, an investigative journalist strives to determine whether he murdered a mentally ill person or if he lost the battle with a demonic presence. Directed by Xavier Gens, it stars Corneliu Ulici and Sophie Cookson.

MTRCB Rating: R-13

Bill to set up energy policy institute filed in Senate

September 1, 2017 | 12:01 am

SEN. Sherwin T. Gatchalian is calling for the creation of what he called a “world-class think tank” that will bridge research and policy gaps in pushing for greater energy security, equity and sustainability in the country.

The legislator, who is chairman of the Senate committee on energy, has sponsored Senate Bill No. 1574 creating the Philippine Energy Research and Policy Institute (PERPI), which is inspired by similar energy think tanks at top US universities.

“As a publicly-funded institute, PERPI will be charged with ensuring its research output is used to craft energy sector reforms for the benefit of the national economy and the lives of the Filipino people,” said Mr. Gatchalian in a statement.

In the bill, PERPI will be an independent institution attached to the University of the Philippines Diliman. It will be composed of scholars and energy sector professionals. Its task is to conduct multidisciplinary energy research, incubate and develop cutting edge technologies, and serve as the sparring partner for the government during the energy policy-making process.

Mr. Gatchalian said the energy research services being provided by existing local institutes are not sufficient to meet the country’s development needs.

“The energy sector is one of the most research-intensive fields within the public policy arena. Characterized by rapidly changing technologies which redefine the parameters of the game at a blistering pace, it is a challenge for even the most well-funded and fully equipped energy sector players to keep abreast with the latest research,” he said.

“The country needs a more cohesive all-in-one institution that will focus on technical know-how and will be able to keep up with the fast-paced evolution of technology,” he added.

The Senate bill is proposing P200 million as the initial allocation of funds for the think tank. An “endowment fund” will also be set up to further support the institute’s research.

“It is my sincere belief that the development of a stable, affordable and sustainable energy supply will be critical to meeting the country’s ambitious long term socioeconomic goals. The research output of the PERPI, in turn, will be essential to turning this vision into a reality,” Mr. Gatchalian said. — Victor V. Saulon

Chinese cyber spies broaden attacks in Vietnam — FireEye

September 1, 2017 | 12:01 am

CYBER SPIES working for or on behalf of China’s government have broadened attacks against official and corporate targets in Vietnam at a time of raised tension over the South China Sea, cyber security company FireEye said.

FireEye told Reuters the attacks happened in recent weeks and it had traced them back to suspected Chinese cyber spies based partly on the fact that a Chinese group it had identified previously had used the same infrastructure before.

“Where China has often focused on the government before, this shows they are really hitting the full commercial sector potentially in Vietnam and trying to gather a broad base of information there,” said Ben Read, who heads FireEye’s cyber espionage team.

Chinese Foreign Ministry spokeswoman Hua Chunying said China opposed all forms of illegal internet activities or stealing of secrets and also opposed any accusations from any side against any country on the issue without cast-iron proof.

Vietnamese Foreign Ministry spokeswoman Le Thi Thu Hang said cyber attacks should be severely punished in accordance with the law and that it was important for countries to secure their networks.

Vietnam denies allowing cyber espionage although it has also been accused by FireEye of carrying out attacks.

STRAINS
Tension between China and neighboring Vietnam is at its highest in three years over the disputed South China Sea, where Vietnam has emerged as the most vocal opponent of Beijing’s extensive claims.

Vietnam suspended oil drilling in offshore waters that are also claimed by China in July under pressure from Beijing.

China has appeared uneasy at Vietnam’s efforts to rally Southeast Asian countries over the South China Sea as well as at its growing defense relationships with the United States, Japan and India.

China claims nearly all the South China Sea, through which an estimated $3 trillion in international trade passes each year. Brunei, Malaysia, the Philippines and Taiwan also have claims.

FireEye said the attacks in Vietnam involved sending users documents in Vietnamese which appeared to be requests for financial information. A broad range of companies appeared to have been targeted, including financial institutions, it said without giving specific details.

When the user opened them, they delivered malware which could infect a computer and send back information to the cyber spies, potentially letting them into the computer network too.

FireEye linked the attacks to a team it calls Conimes because in the past it used the conimes.com domain. The team focuses on Southeast Asia, but its main target is Vietnam and even more so since tensions rose over the South China Sea, Mr. Read said.

He was unable to say exactly what information had been gathered.

Vietnamese President Tran Dai Quang called earlier this month for tighter Internet controls to provide better protection against cyber threats as well as to prevent websites and social media publishing material damaging to the communist party.

Mr. Read said the attacks it had discovered on Vietnam were relatively unsophisticated and relied on users having pre-2012 versions of Microsoft Word.

“They are using comparatively simple techniques because apparently they work,” he said. — Reuters

Year after album, Frank Ocean drops mellow new track

September 1, 2017 | 12:01 am

NEW YORK — Frank Ocean, the introspective singer who has thumbed his nose at music industry conventions, has unexpectedly released a new song, a reflection on relationships set to a mellow R&B vibe.

Ocean put out the new track, “Provider,” on his irregularly scheduled Apple Music radio show last Sunday evening just as artists were gathered for the MTV Video Music Awards.

Ocean has recently steered clear of award ceremonies, questioning their value and methods, despite himself winning a wide platform when his first album Channel Orange was feted at the 2013 Grammys.

“Provider” comes out one year after Ocean again gained wide acclaim for his follow-up album, Blonde, which he independently released a day after uploading an abstract film to free himself from a record contract.

“Provider,” characteristic of Ocean’s work, is set to gentle keyboards with his voice fluctuating between his rich, soulful range and hip-hop delivery.

The song touches obliquely into the question of how to find intimacy as Ocean sings, “Show me some wisdom in your movement” before a chorus in which he repeatedly says the phrase, “Feelings you provide.”

“Provider” goes heavy on pop culture references with allusions to Japanese anime, legendary film director Stanley Kubrick, New Wave rock pioneers Talking Heads, and the English experimental DJ Aphex Twin.

Ocean starts the song by mentioning a close friend named Memo, leading online fans to point to Memo Guzman, who was most recently spotted with Ocean near the ring at last Friday’s boxing match between Floyd Mayweather and Conor McGregor.

Ocean made waves but largely won acceptance in the often macho world of hip-hop when he revealed at the start of his career that his life’s first love was a man. — AFP

Subverting the national interest

September 1, 2017 | 12:00 am

DUMAGUETE CITY — Located near the southern tip of Negros Island, this city is a leading educational center in the Visayas. In 2014, it was named by Forbes magazine as one of the best overseas retirement places in the world for the following reasons: inexpensive, great beaches, expats, balmy climate, and health care.

Since my last visit a decade ago, the capital of Negros Oriental has improved in terms of infrastructure. Dumaguete is now on the radar of property development firms, led by Filinvest’s Marina Town project currently under construction along the city’s bayside Rizal Boulevard. So far the only retail mall in this university town is Robinsons Place at the Dumaguete Business Park and IT Plaza.

Over the past week, all roads here led to Silliman University in the run-up to its foundation day and alumni homecoming. Silliman was established in 1901 as the first American academic institution in Asia. In more than a century, it has produced thousands of graduates, including the late Philippine President Carlos P. Garcia.

My favorite part of Dumaguete is the boulevard area dominated by a beachfront promenade, where restaurants and watering holes abound. I noticed that there were uniformed personnel issuing citation tickets to violators of an ordinance that prohibits smoking in public places. The locals told me this was due to the deployment of 60 “smoke-free enforcers” around the city in compliance with Executive Order (EO) No. 26 signed by President Rodrigo R. Duterte last summer.

EO 26 is not bad per se, aiming to regulate smoking in enclosed places while allowing it in open spaces. But it seems that various local government units (LGUs) have different interpretations of EO 26. The cities of Dumaguete and Makati interpret it very strictly, while the city of Cebu interprets it liberally.

Cebu City Mayor Tomas Osmeña announced his LGU will be lenient in implementing the law, knowing it is not an absolute ban. Mr. Osmeña said he would “temper with mercy” its implementation, citing the case of a hotel that lost 30% of its income because of the no-smoking ordinance.

He thinks it might affect the economy, and he could be right based on data from the Bureau of Internal Revenue and the National Tobacco Administration (NTA) in the aftermath of the so-called Sin Tax Law passed in 2012.

NTA statistics showed a 24% decline in tobacco production from 68 million kilos in 2013 to 52 million in 2015 and areas planted from 38,264 hectares in 2014 to 28,808 hectares in 2016, with the number of farmers shrinking from 55, 000 to 41,000 during the same period.

Meanwhile, the number of smokers in the Philippines decreased from 17 million in 2009 to 15.9 million in 2015. Government revenues from the tobacco industry reached P109 billion in 2012 but dropped to P80 billion in 2016.

Why was the huge revenue drop not proportionate to the decline in the number of smokers? Euromonitor International has an answer: there was a switch to cheap, illicit cigarettes. In fact, the Philippines has the notorious distinction of having the highest growth rate globally for illicit cigarettes from 2010 to 2015, followed by Chile, Egypt, Israel, and Greece.

A recent study by the Federation of Philippine Industries on the impact of illicit trade in eight key industries pegged the total value of illegal cigarettes at P9.8 billion when they flooded the market from 2013 to 2015.

Just the other day, I came across a Reuters report from India about a foreign-funded lobby group working against Indian national interest. The expose from the intelligence wing of India’s home ministry revealed that US-based Bloomberg Philanthropies funded local non-government organizations (NGOs) to run a campaign that would “target Indian tobacco businesses and aggressively lobby against the sector.”

Isn’t this tantamount to subverting the national interest through grants given to local NGOs? Maybe the authorities should look into the activities of Bloomberg Philanthropies in the Philippines, where it reportedly funds several lobby groups.

Such funding is not subject to audit by public or private auditing organizations, yet these NGOs want to influence public policy and legislation in pushing their agenda without transparency and accountability.

J. Albert Gamboa is Chief Financial Officer of the Asian Center for Legal Excellence and serves as Co-Chairman of the FINEX Media Affairs Committee.

Philippine Business Process Management (BPM) market snapshot

September 1, 2017 | 12:00 am

Nation at a glance — (09/01/17)

September 1, 2017 | 12:00 am

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Trademark group says measures in place to strengthen country’s IP system

September 1, 2017 | 12:00 am

THE International Trademark Association (INTA) said the government’s efforts to strengthen intellectual property (IP) protections are beginning to be reflected in the economic contributions of trademark-intensive industries.

A study commissioned by INTA, a nonprofit association composed of 7,000 member-groups and some 31,000 trademark owners and professionals from over 190 countries, showed that trademark-intensive industries in the Philippines from 2012 to 2015 generated 17% direct contribution to gross domestic product (GDP) and 41% indirect contribution.

Direct contributions consist of output and value-added generated by the industries while indirect contributions reflect interdependencies, through the purchase and sale of inputs.

In terms of labor, output and value-added, workers in such industries represented 15% of total employment.

The industries accounted for 47% of exports including manufacturing, IT, and electronics and related equipment which accounted for around 40% of total manufacturing value added.

The three industries that topped the list in contributions were manufacturing, information and communication, and construction.

“We need to have strong registration mechanisms which, fortunately, we already have here in the Philippines. We need to have stronger reinforcement mechanisms and I can tell you that your country is a leading country in the region,” said INTA CEO Etienne Sanz de Acedo on Thursday when the study was released at a briefing in Makati City.

James Allan, Director of Frontier Economics Australia and Asia, the consulting firm for the study, said that policies play a key role in driving the expansion of the trademark system in the country.

“I think we see some encouraging times in the Philippines. A good example is the recent establishment of the Philippine Competition Commission. It is these sorts of robust, transparent institutions that gives businesses the right signals and the right degree of confidence to come and make the investments that will ultimately increase manufacturing and drive export growth,” he said yesterday during the conference.

In Singapore the direct contributions topped the region at 50%.

Malaysia, Thailand and Indonesia followed in terms of direct benefits to GDP at 30.3%, 22%, and 21% respectively.

However, the study, “The Economic Contribution of Trademark-Intensive Industries in Indonesia, Malaysia, the Philippines, Singapore, and Thailand” which was published on Aug. 14, said the low direct contribution to the Philippine economy may be attributed to the way in which data is presented.

“The level of disaggregation is less fine-grained that it is from other countries. This could mean that some trademark-intensive industries in the Philippines only make up part of a particular sector code might be excluded, whereas in others they would have been included,” the study read.

Mr. Allan suggested that the country may also use the study’s findings to draft a more effective strategy in attracting global investors to the manufacturing sector.

“A lot of activities come from manufacturing, particularly computers and big-ticket equipment items. Now the Philippines has a large number of players. But I think there has also been some players that left in recent years. And I guess one of the things that does come out of our study is that there is an opportunity for the Philippines to refocus on attracting this large global computer and equipment manufacturers and return to the Philippines,” Mr. Allan said.

In terms of indirect benefits, Thailand brought up the rear at 40% while Malaysia was highest at 60%.

On share of exports, both Thailand and Singapore scored 60% while Indonesia was lowest at 27%.

The five countries account for close to 90% of the combined GDP of the ASEAN community.

INTA defines trademark-intensive industries as those that have an above-average use of trademarks per employee.

A trademark helps consumers distinguish the goods and services provided by one company from another.

Earlier this year, the country started crafting a national strategy to enhance the country’s intellectual property system .

Intellectual Property Office of the Philippines (IPOP) Director-General Josephine R. Santiago said the project is expected to be completed in March next year.

“We hope in the process to get all the sectors where IP is relevant in the consultation process,” Ms. Santiago said during the briefing.

“We want to make and have programs that would translate into more understandable and would be more appreciated by the larger parts of our society like SMEs (small, medium enterprises),” she added.

Data from the IPOP show that filing of trademark applications grew slightly to 27,171 — covering both residents and non-residents — in 2016 from 27,112 a year earlier.

Existing registrations hit 26,978 last year, up from 2015’s 21,980.

“We’re looking at hitting the same [as last year] or exceeding the mark,” Ms. Santiago said referring to application and registration figures.

In the first half of the year, applications stood at 18,567 while registrations were at 10,813.

The IPOP official said sectors with most applications are pharmaceuticals, health and cosmetics.

This is followed by agricultural products and services, scientific research and information communication technology, textiles, management communication, real estate and financials. — Janina C. Lim