Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 8551

Big fund managers buy PHL stocks in ‘mega sale’

BIG Philippine money managers are cautiously plowing back money into the nation’s equities, seeing cheapened valuations as an opportunity they have been waiting for, although the market has yet to bottom out.

The Philippine Stock Exchange index climbed 10% last week, the most since 2009 and briefly entering what’s defined as bull territory on Friday, when gains from an eight-year low extended to 22%. The surge came as the nation unleashed monetary stimulus and fiscal spending packages of P775 billion ($15.2 billion) to avert a potential recession. The benchmark sank 2.6% on Monday, extending this year’s slump to more than 34%, one of the worst in the world.

The companies in the Philippine index now trade about 10 times earnings estimated in the next year, near the lowest level since 2009, data compiled by Bloomberg show. BDO Unibank, Inc., the biggest local private fund manager that has $20 billion in assets, favors companies that benefit from the epidemic and those that will quickly bounce back once the economy normalizes such as banks.

“This is the mega sale we have been waiting for,” said Fritz Ocampo, who manages $20 billion as chief investment officer at BDO. “Long-term investors look at this as a good time to accumulate their favored stocks. While infections will still rise, the market is now more forward looking after steps taken by the government.”

While the market’s recovery indicates a return of some confidence, fear remains high as the spread of the coronavirus continues and its economic toll has yet to be quantified, according to BDO, and PhilEquity Fund, one of the nation’s oldest mutual funds.

“We could reach levels that technically qualify as a bull market, but it’s hard to say we have already hit bottom,” Mr. Ocampo said. “Business and consumer confidence haven’t been restored yet, while the real economy is still struggling.”

Amid the caution, Mr. Ocampo likes telecom stocks on expectation that data demand is picking up as people stay home, and retailers that benefit from continued purchases of basic goods and will further gain when consumer demand recovers once the outbreak is contained.

Local buyers are driving the market’s rebound from its recent low as foreigners have been selling Philippine shares at the fastest pace since 1999, when Bloomberg began tracking the data. Except for two sessions, overseas funds pulled out money every day this month, bringing this year’s withdrawals to over $633 million.

“Those willing to overlook bad economic numbers in the short term are slowly coming in,” said Wilson Sy, a fund manager and founder of PhilEquity Fund, which started in 1994.

Mr. Sy favors the biggest companies in the index. “Some are anticipating a V-shaped recovery when the stimulus kicks in. The drop was sharp and quick so the bounce is bound to be the same.” — Bloomberg

P31 billion allocated for food sufficiency measures

THE government is allocating P31 billion for measures that would ensure there is enough food supply during the Luzon-wide enhanced community quarantine.

The Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) said it has approved a P31-billion supplemental budget for the Agriculture department’s national “Plant, Plant, Plant Program.”

The supplemental budget will now only require President Rodrigo R. Duterte’s approval, as part of the special authority granted to him under Republic Act No. 11469 or the Bayanihan to Heal as One Act.

“It is part of his special powers based on the new law — to realign the budget,” DA Spokesperson and Assistant Secretary Noel O. Reyes said in a mobile message.

The DA’s program, also known as Ahon Lahat, Pagkaing Sapat (ALPAS) Kontra sa COVID-19, is also geared towards making basic agricultural commodities more accessible and affordable, amid the ongoing spread of the coronavirus disease 2019 (COVID-19).

“In all, we have enough food for the next two months. We are enhancing needed measures to ensure food security and strong cooperation with all sectors, most particularly with all provincial governors, city and municipal mayors, and barangay leaders in ensuring the unhampered transport of agricultural products and farm and fishery inputs, including movement of farmers, fishers, and workers in the food value chain,” Agriculture Secretary William D. Dar was quoted as saying in the statement.

The biggest slice of the supplemental budget will go to the DA’s Rice Resiliency Project at P7.5 billion.

Another P7 billion will be allotted for the palay procurement fund of the National Food Authority (NFA), while P3 billion each or a total of P9 billion will go to providing financial assistance for farmers affected by the drop in farmgate prices; expanded agriculture insurance coverage; and social amelioration to farmers, fishers, and farm workers.

The Agriculture department will also allocate P1 billion each for six projects, including the Kadiwa ni Ani at Kita program livestock and corn resiliency program; and coconut-based diversification project. Other projects include the “expanded small ruminants and poultry project: fisheries resiliency program; and revitalized gulayan” project.

“We need to improve efficiencies in production and enhance projects and activities to ensure affordability and availability of food supply,” Mr. Dar said.

Moreover, P500 million will be allocated for protective personal equipment (PPE) like surgical masks for the DA, while another P500 million will go to the urban agriculture project.

A corn-for-food project will get P300 million, while P200 million will be allocated for the DA’s information, education, and communication project. — RMDO

Metro Pacific forms COVID-19 crisis team

THE HOSPITAL unit of Metro Pacific Investments Corp. (MPIC) has stepped up its response to the pandemic by forming a crisis team and designating one of its hospitals as a referral facility for those positive of the deadly virus.

In a statement yesterday, Metro Pacific Hospital Holdings, Inc. (MPHHI) said it was increasing efforts to address the coronavirus disease 2019 (COVID-19) through the newly formed team.

“The country’s health care system faces unprecedented challenges… Our Hospitals Group are focusing their resources on critical concerns — particularly hospital care for the most critically-ill patients infected by COVID-19,” MPIC Chairman Manuel V. Pangilinan said in the statement.

“At the same time, we aim to provide every assistance possible to our doctors, nurses and healthcare personnel to protect their well-being and safety as they courageously pursue their enormously difficult task of caring for patients,” he added.

MPHHI’s network of 16 hospitals is joining efforts to mitigate the mounting cases of COVID-19. It designated Our Lady of Lourdes Hospital in Sta. Mesa, Manila as the main COVID-19 referral facility. The other 15 hospitals in its network will explore opportunities to double capacities to more than 600 beds for COVID-19 patients.

The hospitals in MPHHI’s network include Makati Medical Center, Cardinal Santos Medical Center, Asian Hospital and Medical Center, De Los Santos Medical Center, Manila Doctors Hospital, Sacred Heart Hospital of Malolos, Dr. Jesus C. Delgado Memorial Hospital, and Marikina Valley Medical Center.

In the event that the situation worsens, MPHHI said it was planning supplemental tents for non-critical COVID-19 cases.

The Department of Health reported 1,418 cases, 71 deaths and 42 recoveries from COVID-19 as of Sunday.

Shares in MPIC at the stock exchange shed 20 centavos or 7.69% to P2.40 each yesterday.

MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group. — Denise A. Valdez

Xurpas halts Singapore subsidiary’s operations

XURPAS, INC. is suspending the operations of a Singapore-based subsidiary due to the coronavirus disease 2019 (COVID-19) pandemic, and is divesting a majority stake in its cryptocurrency money transfer subsidiary.

In a disclosure to the stock exchange yesterday, the listed company said its board of directors approved suspending the business operations of mobile marketing solutions firm Art of Click Pte. Ltd.

The decision is seen to result in the retrenchment of employees and the deactivation of Art of Click’s ad network platform.

“Xurpas expects further losses to be incurred by Art of Click as a result of business challenges brought on by the (COVID-19) pandemic, and as such, will suspend the business operations of the said subsidiary to better manage Xurpas’ funds,” it said.

Art of Click has presence across the Asia Pacific region, with key markets in Korea, Japan, Hong Kong, Taiwan, Southeast Asia, North America and Europe, it said on its website.

Xurpas said Art of Click started facing financial difficulties in 2017 when it lost key clients and was overshadowed by tech giants Facebook and Google. The COVID-19 pandemic is expected to result to further losses.

On the same day, Xurpas’ board of directors agreed to sell 80% of subsidiary CTX Technologies, Inc. to Xurpas Founder Fernando Jude F. Garcia.

CTX was meant to be Xurpas’ virtual currency exchange subsidiary when it was incorporated in 2018.

“With the decline of the virtual currency market in 2019 and the unclear regulations involving digital assets, Xurpas’ management has previously decided to place CTX’s business on hold,” the company said.

CTX, which has an equity of approximately P1 million as of end 2019, does not contribute to Xurpas’ revenues. The latest transaction will be paid by deducting the purchase price of P4 million from Xurpas’ payables to Mr. Garcia.

Xurpas booked an attributable net loss of P667.04 million in the nine months to September 2019, larger than the P186.81 million net loss in the previous year.

Shares in Xurpas at the stock exchange slipped 3.03% to P0.480 apiece yesterday. — Denise A. Valdez

Raymund Marasigan produces new single for We Got

THE EIGHT-PIECE reggae band We Got has released its first single from Sony Music Philippines, “Lihim na Pagtingin,” a song produced by singer Raymund Marasigan.

The song, described as a “mix of steady, groovy beat and a horn section straight from a summer retreat” in a release, is about two people who have been friends for a long who secretly have deeper feelings for one another.

“Finally, courage took over and they finally let their feelings out. Love wins,” the band’s vocalist and guitarist Mack de la Cruz said in a statement.

The band is composed of Mr. De la Cruz, Makoy Quebral on rhythm guitars and backup vocals, Nam Reput on bass, CJ Bernardo on percussions, Thoper Laroco on drums, Melvin Bernardo on saxophone, Anthony “Tonton” Otoc on trumpet, and John Rafael Morales on trombone.

The song was produced by Raymund Marasigan, best known as a member of the rock band Eraserheads. After leaving the Eraserheads, he has been involved with other bands such as Sandwich, Pedicab, Cambio, Assembly Generals, Ultra Combo, Basement Lung, and Squid9.

“Raymund Marasigan is a legendary icon of our generation. Working with him is even beyond our imagination. He’s very professional, patient, cool, innovative and has a very wild and crazy mind!,” Mr. De la Cruz said.

“His ideas are simply out of this world (in a very good way). He never looked down on us. He never failed to boost our confidence, taught so many things which we surely value so much,” he added.

Mr. Marasigan said “We Got is like a family,” so they worked to “capture that vibe” with the song.

“Lihim na Pagtingin” is available on Spotify and other music streaming sites. — ZBC

Cebu Air earnings hit P9B

CEBU AIR, Inc. reported a net income of P9.12 billion for 2019, or more than double its net income a year ago of P3.92 billion, driven by its core business.

In a disclosure to the stock exchange on Monday, the operator of budget carrier Cebu Pacific said its revenues grew 14.4% to P84.81 billion last year from P74.11 billion it generated for the year 2018.

This growth was mainly driven by the passenger segment of the airline operator’s business which contributed P61.68 billion to the total revenues, 13.7% higher than the previous year’s P54.26 billion.

“This was mainly attributable to the 10.8% growth in passenger volume to 22.5 million from 20.3 million last year as the Group increased capacity. The increase in average fares by 2.6% to P2,745 from P2,675 last year also contributed to the increase in revenues,” the listed airline operator said.

Cebu Air’s ancillary revenues grew 21% to 17.38 billion from the previous year’s P14.36 billion while the cargo segment contributed P5.75 billion, up 4.7% from the figure in 2018.

The company said the growth in ancillary revenues was driven by the increase in passenger traffic coupled with pricing adjustments and increased volume of certain ancillary products and services.

To recall, Cebu Air’s net income plunged 50.6% to P3.9 billion in 2018, from P7.9 billion in the previous year, due to the “challenging macro environment.”

The airline’s flying operations expenses last year increased by P349.25 million or 1.2% to P30.26 billion due to the increased in pilots’ training costs. However, fuel expenses went down by 3.3% or P39.48 million, the company said.

To support its plans to increase the airline’s frequency on its current routes and to add new city pairs and destinations, Cebu Air said it will have 63 aircraft deliveries beginning this year until 2026.

“The Group is also set to venture into the dedicated freighter market making it the only passenger airline in the Philippines with dedicated cargo planes. The first converted ATR 72-500 freighter aircraft was received in August 2019 while the second will be delivered within 2020,” it added.

But the airline operator also noted that the coronavirus disease 2019 (COVID-19) is expected to “adversely affect” its financial health.

“While it is difficult to predict when operating conditions will improve, the Group believes that [the COVID-19] remains a going concern, given the measures undertaken, its liquidity position, its access to short and long term funding, and the strong relationships it has with major suppliers,” Cebu Air said further. — Arjay L. Balinbin

Davao hotels to shelter health workers

DAVAO CITY — The iconic Apo View Hotel, the oldest in the city at over 70 years, is one of the local businesses that have temporarily suspended operations due to the coronavirus disease 2019 (COVID-19) outbreak.

Apo View Hotel, however, kept its rooms open for health workers who are at the frontline of the fight against the spread of COVID-19.

“To support the government with its battle against COVID-19, Apo View Hotel has opened its doors and offered free room accommodation to our frontline healthcare workers… This is to show our gratitude to the frontliners who have been risking their lives and working tirelessly to help our countrymen in this time of need,” said hotel manager Leah S. Adolfo in a text message.

Ms. Adolfo said they actually started housing 50 staff of the state-owned Southern Philippines Medical Center, the designated COVID-19 hospital in the city, even before news broke of health workers being asked to leave their rented lodgings as neighbors fear contamination.

She added that Apo View’s management firm, Global Comfort Group Corp., which is behind the Eurotel and Icon hotel brands, has also opened more than 400 rooms in other parts of the country to frontliners.

Several other hotels and motels in the city have since welcomed health workers following a call from the local government and the Davao City business chamber.

These include Blue Lotus Hotel; the Oyo Hotel chain which includes the Davao Airport View, Circle-B Suites, Chateau Cinco Dormitel, D’Airbus Inn, Yellow Pad, Sharana Pensionne, and Capital O World Palace; and Oh George! Drive-Inn.

“We are thankful for them for allowing the nurses and BPO (business process outsourcing) workers to stay. They will allow them safer and easier access to their workplaces while complying with government requirements,” Davao City Chamber of Commerce and Industry Inc. President John Carlo B. Tria said in a statement last week.

The discrimination against health workers, along with the logistical challenges of getting to and from medical facilities amid the community quarantine restrictions around the country, has also been reported in other areas such Iloilo City and the National Capital Region.

But response has been swift not just from commercial establishments, but local officials and the private sector in general.

In Iloilo, the local government-owned Iloilo City Community College was immediately identified as a temporary lodging facility. Donations of beds, mattresses, pillows, and linens poured in, including those from hotels in the city.

Iloilo Mayor Jerry P. Treñas, in a post on his Facebook page on March 22, hailed strong “public-private partnership” in addressing the COVID-19 health crisis, emphasizing the need for continued joint efforts to protect the medical workers in particular.

He wrote, “Please keep in mind that if they (frontliners) cannot eat or sleep well, they cannot go to work. Who will take care of you if you will be infected?” — Maya M. Padillo and Carmelito Q. Francisco

A tiger tale

TV REVIEW
Tiger King: Murder, Mayhem, and Madness
Netflix

STREAMING service Netflix just dropped a new true-crime documentary series, Tiger King: Murder, Mayhem, and Madness, (Tiger King) a little over a week ago and the internet has not stopped talking about how crazy the people and the entire situation is. And seeing that the documentary hasn’t hit the Top 10 list in the Philippines just yet, here’s a review to whet the appetite of those who haven’t seen it yet.

Tiger King, directed by Eric Goode and Rebecca Chaiklin, is about a little-known but highly interconnected society of big cat conservationists and private zoo owners and their mutual dislike for each other. At the center of the conflict is Joe Exotic (Joseph Allen Maldonado-Passage), a flamboyantly gay owner of more than 200 big cats who runs a zoo called the Greater Wynnewood Exotic Animal Park in Florida, and Carole Baskin, the owner of conservation group Big Cat Rescue, also in Florida.

While one of the directors of the documentary said that the series started when they were investigating the wildlife trade in the US (and saw a snow leopard sitting in the back of a truck under the hot Florida sun), it is quickly apparent that the seven-episode series isn’t as much about big cat conservation as it is about the crazy characters collecting big cats.

(Note: Snow leopards are listed as vulnerable by the International Union for Conservation of Nature.)

We have, on the one hand, Mr. Maldonado-Passage, who runs a private zoo along with “other misfits” — former felons and such. He feeds his animals and his crew with rejected or expired meat from the local supermarket, and also roadkill. He also has a reality show called Joe Exotic TV and “makes” country music. Subsequent articles about the documentary revealed that he lip synced all his songs in the two albums he produced.

He was also married two husbands at one time.

On the other hand, we have Carole Baskin, who has made it her mission to give big cats a “good home until they die.” One of the main conflicts in the series from the third episode on is how Ms. Baskin may have had a hand in the disappearance of her second husband, Don Lewis.

Also featured in the series is Bhagavan “Doc” Antle who runs a high-end private zoo in Myrtle Beach, South Carolina. He claims to spend $10,000 to feed one tiger a year, and yet has so many women working for him for pittance. He also sleeps with these women in something like the Playboy Mansion — but with tigers.

Mr. Maldonado-Passage and Ms. Baskin are involved in a years-long feud over Mr. Maldonado-Passage’s treatment of his animals. She manages to stop his performances in malls across the US, which put a huge dent in his finances, so he threatens violence.

The documentary so loves focusing on the hatred Mr. Maldonado-Passage has for Ms. Baskins that there is a montage of how many times he talked about her.

It all ends when Mr. Maldonado-Passage was arrested for hiring someone to murder Ms. Baskins, a crime that landed him in prison in 2018. He has to stay there for 22 years.

Is it a compelling documentary? Yes, if you can get over the cringe-inducing scenes showing how much of a mess they all are (a large part of that is Mr. Maldonado-Passage’s music which plays in several episodes), and the sadness one feels over the fact that none of these people are treating exotic animals the way they should be treated.

Tigers, in particular, have expiration dates once they get too big to be considered cute, and it’s expensive to keep an adult tiger.

For those who want to watch the series, know that this isn’t about conservation — it’s about people keeping big cats for money. So if you’re looking for a documentary about the ethics of exotic animal trade, this is not for you.

But the characters are colorful, and strange, and, frankly, nauseating — but it makes for good content. Tiger King was popular enough that Netflix ordered a limited series days after the documentary series hit the service. — Zsarlene B. Chua

Pilipinas Shell income up 11% to P5.6 B

PILIPINAS SHELL Petroleum Corp. posted an 11% year-on-year jump in net income in 2019 on the back of its marketing activities and savings from refinery costs.

The oil company told the Philippine Stock Exchange on Monday that it recorded P5.6 billion in net income, as it spent P6 billion in expanding its retail network, supporting refinery growth projects, and bolstering supply and distribution capabilities.

According to Pilipinas Shell Vice-President for Retail Randolph T. Valle, the company’s retail volume grew by 1.2% with premium fuel penetration at 27% despite high excise taxes, lifted by marketing activities, along with its loyalty programs and network expansion.

The company added 53 new fuel retail stations, operating a total of 1,126 sites in 2019.

Meanwhile, its non-fuel business saw earnings rise by 15%.

Its overall commercial fuel volume expanded by 9%, driven by its bitumen business, which supports the government’s Build, Build, Build program. The oil firm’s Bitumen Production Facility has more than doubled its operating profits in the year as it ramped up its footprint nationwide and exported to five countries.

“The marked volume growth across our business segments last year was not by chance; it is the result of consistent strategy and clear-cut focus on our objectives,” Pilipinas Shell President and Chief Executive Officer Cesar G. Romero said.

Meanwhile, its refinery saved almost P700 million last year in structural costs to counter the depressed regional refining margins. In December, it turned to low sulfur fuel oil, which yields higher margins compared to high sulfur fuel oil.

The company has started building its integrated hydrogen manufacturing facility that could process more crude oil varieties and more quality fuels, as well as its integrated energy system, which could create a more sustainable energy footprint from solar energy, natural gas, and battery storage.

Amid the spread of the novel coronavirus disease 2019 (COVID-19) pandemic, Pilipinas Shell said it maintains its operations to provide stable fuel supply in areas under enhanced community quarantine.

“We continue to look for ways to appropriately support our key stakeholders and business partners, and commit to make the right sustainable decisions for the company in this time of challenges and uncertainties,” Mr. Romero said.

On Monday, shares in Pilipinas Shell fell by 1.07% to close at P18.50 each. — Adam J. Ang

Microstudio developer waives minimum lease requirement

By Denise A. Valdez
Reporter

MICROSTUDIO DEVELOPER Point Blue is waiving its minimum lease requirements to help those in need of a place to stay while Luzon is under quarantine.

The company said in a statement it is now allowing new and existing tenants to pay a minimum rent of one month for units, from the previous lease requirement of a minimum of three months.

“Typically, developers charge more for shorter leases, since it’s more difficult operationally. In our case, we made the decision to keep our pricing the same. Our priority was to provide a solution for people who need it,” Point Blue Chief Executive Officer JR Yujuico said in an e-mail to BusinessWorld.

Point Blue has a total of 750 microstudios in its six buildings so far: 400 microstudios in four buildings near Bonifacio Global City and 250 microstudios in two buildings in Makati City. Each microstudio is fully furnished with one bed and a private bathroom.

Since the government announced the lockdown in Metro Manila on March 12 initially, Mr. Yujuico said Point Blue has received “an unusual amount of inquiries” for short-term leases. This prompted the company to remove the three-month minimum lease requirement as “it became increasingly obvious that people were in need.”

The entire island of Luzon is now under enhanced community quarantine until April 12, as the government tries to contain the spread of the coronavirus disease 2019 (COVID-19).

Point Blue’s microstudios are available for single or double occupancy with prices ranging from P13,200 to P15,000 a month, inclusive of a high-speed internet connection.

The company is targeting to develop 3,000 microstudios in Makati by 2022 in partnership with AboitizLand, Inc. Before the COVID-19 outbreak, Mr. Yujuico said the company was on track to open a new building every one to two months.

However, the increasing number of COVID-19 cases in the Philippines has forced the company to stop work on 11 buildings, each in different stages of design and construction.

“What’s for sure is that during this time, it’s difficult to think about growth. We need to plan for every scenario and make sure our company can look after our Point Blue community,” Mr. Yujuico said.

“Our business does have a solid foundation and I do think we are well-positioned to expand even further in the longer term. In the immediate term, we are in full support of the government’s measures to address COVID-19 and keep our communities healthy,” he added.

From sofas and kitchens, music stars hold coronavirus concert fundraiser

LOS ANGELES — Billie Eilish sang on her sofa, Elton John played a keyboard belonging to his children, and the Backstreet Boys sang in harmony from five locations as dozens of musicians put on a fundraiser for the warriors against a coronavirus.

Those who performed from their homes for the IHeart Living Room Concert for America also included Mariah Carey, Camila Cabello, Alicia Keys, Shawn Mendes and Sam Smith.

The one-hour show, broadcast on Fox television without commercials, was the biggest joint effort in the pandemic to lift spirits, raise money for those in the frontlines, and remind Americans to wash their hands and keep their distance.

“There’s doctors, nurses and scientists on the frontlines. They’re living proof that most superheroes don’t wear capes,” said John, who hosted the show from his kitchen.

“We hope this bit of entertainment can feed and fuel your souls.”

All the performances and appearances by celebrities ranging from comedian Ellen DeGeneres to R&B artist Lizzo and country singer Tim McGraw were filmed on phones, home cameras or online platforms.

The songs were interspersed with short personal stories from nurses, doctors, truckers, grocery staff, and other essential workers as millions of Americans entered a third week subjected to orders to stay home.

Dr. Elvis Francois, a surgeon from Rochester, Minnesota, stole hearts on social media with an emotional rendition of “Imagine” performed in medical scrubs.

“Did this doctor just out sing every artist that’s performed?” one viewer, Ender Wiggins, asked on Twitter.

The concert, also broadcast on iHeart radio stations nationwide, urged listeners to donate to charities Feeding America, and First Responders Children’s Foundation.

The amount raised was not immediately known, but more than $1 million was donated in the first 10 minutes, courtesy of $500,000 from household goods giant Procter & Gamble and a matching sum from Fox Television.

“My heart goes out to people who have lost loved ones and also those who are losing their jobs,” said Lady Gaga, clad in pink sweatpants and a hoodie.

Alicia Keys, singing “Rise Up,” Dave Grohl performing “My Hero,” and Billie Joe Armstrong of Green Day’s acoustic version of “Boulevard of Broken Dreams” spoke to the hardships of millions of those working or laid off as stores, restaurants, gyms, and movie theaters have shut down.

“After we come out of this horrible thing, I hope we are nicer to each other, and fairer to one another,” John said. — Reuters

Gov’t rejects all bids for T-bills

THE GOVERNMENT rejected all bids for the Treasury bills (T-bills) it offered on Monday following the surge in rates as investors prefer to keep their cash amid the coronavirus disease 2019 (COVID-19) pandemic.

The Bureau of the Treasury (BTr) on Monday rejected all bids for the T-bills worth P17.2 billion across all tenors versus its initial plan to raise P20 billion.

Broken down, total bids for 91-day papers only reached P7.6 billion, short of the P10-billion program. Had the Treasury made a full award of these bids, the three-month papers would have fetched an average rate of 4.517%, a 149.3-basis-point (bp) surge from the 3.024% fetched in the March 16 auction.

Bids for the 182-day T-bills were also below the P5-billion plan, with total tenders reaching just P4.06 billion. Had the BTr made a full award, the average rate for six-month papers would have settled at 4.259%, up 86.1 bps from the 3.398% fetched previously.

The Treasury likewise rejected bids worth P5.55 billion for the 364-day papers, even as the total was above the P5-billion plan. If the tenor was fully awarded, the one-year securities would have fetched an average rate of 4.402%, up 85 bps from the previous rate of 3.557%.

Yesterday was the third consecutive auction where the BTr rejected all tenders due to higher rates, or since it made a partial award of T-bills on March 16, the day before the Luzon-wide enhanced community quarantine was implemented.

National Treasurer Rosalia V. de Leon told reporters via Viber after the auction that they decided to not accept any tenders as “all bids [were] over the roof,” adding that she “heard banks are giving out ultra high deposit rates.”

However, Ms. De Leon said the 35-day T-bills the BTr will reintroduce on Tuesday “should be appealing” to investors as they have to “put their money to work.”

“[35-day papers have] very short maturity so funds will be available when needed. There is still opportunity cost for holding to cash,” she said.

For Robinsons Bank Corp. peso debt trader Kevin S. Palma, “the BTr once again flexed its strong cash position and opted to reject bids for a second straight week.”

“Market players sought higher yields due to continued global uncertainties surrounding COVID-19,” Mr. Palma added.

REPURCHASE AGREEMENT
Meanwhile, Ms. De Leon said the BTr received yesterday the payment for P300 billion worth of three-month government securities that the central bank had agreed to buy last week.

She said the papers were “revenue neutral,” with the repo rate and deposit rate at zero percent.

The Bangko Sentral ng Pilipinas’ repurchase agreement with the Treasury is renewable for another three months.

The proceeds will be used to help fund the government’s efforts to address the COVID-19 pandemic.

Luzon was placed under enhanced community quarantine until April 12 to contain and slow the spread of the virus that has infected 1,418 and killed 71 in the country as of Sunday afternoon.

The Treasury has set a P190-billion local borrowing program for April, broken down into P130 billion in T-bills and P60 billion in Treasury bonds.

The government plans to raise P1.4 trillion this year from local and foreign lenders to plug its budget deficit, which is capped at 3.2% of gross domestic product. — B.M. Laforga

1...8,5508,5518,552...13,090Page 8,551 of 13,090
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube