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China Bank net profit rises

CHINA BANKING Corp. (China Bank) posted double-digit net income growth in the first quarter on the back of its strong core businesses.

In a disclosure to the local bourse on Thursday, China Bank said its net income jumped 19% year on year to P2.2 billion in the January-March period, translating to a return on equity of 9.15% and return on assets of 0.92%.

The lender’s net interest income surged 34% year on year to P7.9 billion in the first quarter while its net interest margin inched up to 3.82% from 3.32%, previously.

China Bank said the rise in its net interest income was mainly due to higher revenues it had from “earning assets and lower interest expense, which dropped 23%.”

Meanwhile, the bank’s fee income declined to P1.2 billion as weak market conditions affected its trading activities.

Its total operating income rose 26% to P9.1 billion in the first quarter from the year prior.

The bank said strong demand across all segments drove its gross loan portfolio rise to P592 billion in the first quarter, up 15% year on year.

Despite higher loans, China Bank’s nonperforming loan (NPL) ratio stood at 1.7% while the NPL cover was at 109%.

The bank increased its provisions by 51% on expectations of higher credit losses amid the coronavirus disease 2019 (COVID-19) pandemic.

On the funding side, China Bank saw total deposits rise nine percent to P785 billion, causing its loans-to-deposit ratio to improve to 74%.

Meanwhile, operating expenses increased 22% to P5.8 billion “as the bank continued to strengthen and expand its operations and provided for COVID-19 related expenses.”

Still, its cost-to-income ratio improved to 64% from 66% in the same period last year.

The bank’s total capital reached P97 billion as of the first quarter, “with regulatory capital ratios well above regulatory levels.”

Its total assets increased 10% to P984 billion even as it scaled down operations in some of its branches in Luzon starting mid-March or when the enhanced community quarantine was implemented.

“The impact of the COVID-19 pandemic on our customers, employees, and society as a whole is a great concern for China Bank. We are committed to extend the help, support, and flexibility that our stakeholders need in these challenging times to ease the negative economic consequences of this global health crisis. We are also very grateful to our hardworking and dedicated frontliners who enable us to deliver on this vital commitment,” China Bank President William C. Whang was quoted as saying.

China Bank’s shares closed at P19.70 apiece on Thursday, down 0.1% or two centavos. — Beatrice M. Laforga

Tom Cruise aims higher with movie shot on space station

LOS ANGELES — Action star Tom Cruise is working on a movie shot in outer space, the National Aeronautics and Space Administration said on Tuesday.

“NASA is excited to work with @TomCruise on a film aboard the @Space_Station!,” NASA administrator Jim Bridenstine wrote on Twitter.

“We need popular media to inspire a new generation of engineers and scientists to make @NASA’s ambitious plans a reality,” Bridenstine added.

He gave no details but the tweet followed a report in Hollywood trade outlet Deadline that Cruise was working with Tesla and SpaceX entrepreneur Elon Musk to make what would be the first feature film to be shot in space.

The proposed action adventure is in its early stages, Deadline reported on Monday.

Representatives for Cruise did not immediately return a request for comment.

Mission: Impossible star Tom Cruise, 57, is renowned for his daredevil films and for doing his own stunts. He flew fighter jets for the upcoming Top Gun: Maverick, hung off the side of a plane as it took off in Mission: Impossible Rogue Nation in 2015, and climbed the Burj Khalifa skyscraper in Dubai — the tallest building in the world — for Mission: Impossible Ghost Protocol.

Filming on Mission: Impossible 7 was put on hold in February as the coronavirus epidemic took off in Italy. The disease later led to a worldwide shutdown of Hollywood movie and TV production and the closure of movie theaters. — Reuters

DoLE worker assistance disbursements top P5B

THE DEPARTMENT of Labor and Employment (DoLE) has disbursed more than P5 billion worth of cash assistance to over one million workers whose employment was affected by the coronavirus disease 2019 (COVID-19) emergency.

DoLE said in a statement Thursday that it “disbursed about P4.44 billion out of its regular budget and a separate P1.05 billion in emergency funds” to help workers who were displaced during the enhanced community quarantine (ECQ) imposed on March 17 in Luzon and in other areas.

A total of 1,059,387 workers have availed of the subsidies and assistance via the following channels: the COVID-19 Adjustment Measures Program (CAMP); the Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers, Barangay Ko Bahay Ko (TUPAD BKBK) program; and the DoLE AKAP program.

CAMP ceased accepting applications on April 15 after DoLE announced that funding was not sufficient to accommodate over 1.6 million applicants for the one-time cash subsidy to private sector workers displaced because of the ECQ. Some 618,722 formal sector workers from 31,972 establishments have received aid from CAMP while 35,723 workers are expected to receive their assistance this week before CAMP officially closes operations. Total disbursements are estimated at P3.093 billion.

Under the TUPAD BKBK program, 337,198 informal sector workers availed of emergency employment and assistance, on which the department spent P1.348 billion.

The AKAP program, which gives displaced and disadvantaged overseas Filipino workers (OFWs) one-time cash assistance of P10,000 or $200, has registered 103,467 OFW beneficiaries. DoLE added, “About P1.05 billion has been disbursed of the P1.5 billion special funds released for the program for an estimated 150,000 OFWs.”

DoLE requested an additional P2 billion to help other OFWs who applied for AKAP assistance. The program had 368,703 applications as of May 5. — Gillian M. Cortez

Canned food demand lifts Century Pacific’s income 31%

CANNED food manufacturer Century Pacific Food, Inc. (CNPF) recorded a 31% jump in net income in the first quarter due to a surge in local demand brought by the government’s quarantine measures in late March.

The listed company told the stock exchange yesterday its net income in the first three months stood at P1.04 billion, boosted by a 24% growth in consolidated revenues to P12.1 billion.

Its branded business comprised P10.1 billion of the revenues, higher by 31% from a year ago. The remainder are revenues from its commodity-linked export businesses which were flat as capacity focused on domestic operations.

“Growth was seen across all business units as majority of the company’s products are shelf-stable and consumed at home,” the company said.

CNPF is the manufacturer behind food brands such as Century Tuna, Argentina, 555, Angel and Birch Tree.

“During these challenging times, we recognize the importance of making our products as accessible as possible nationwide,” CNPF Chief Finance Officer Oscar A. Pobre said in the statement.

He noted despite logistical and operational challenges, CNPF continues to operate its facilities round the clock to supply the growing demand.

The company also posted a 46% increase in operating expenses to P1.71 billion due to additional costs that went to employee assistance programs and implementation of health and safety procedures.

“There are still a lot of uncertainties as to what the balance of year will look like, including what the pandemic’s effects will be on the broader economy and consumer demand,” Mr. Pobre said.

“Nonetheless, employee welfare and product availability will remain our top priorities and we are taking the necessary steps — including hiring additional personnel, increasing our logistic capabilities, and ramping up safety and security in our facilities — to help address the requirements as best we can,” he added.

Shares in CNPF at the stock exchange traded flat on Thursday to close at P14.30 apiece. — Denise A. Valdez

PSBank earnings down 5.1% in Q1

PHILIPPINE SAVINGS Bank (PSBank) booked a lower net income in the first quarter as it set aside more loan provisions.

In a filing with the local bourse on Thursday, the thrift unit of the Metropolitan Bank & Trust Co. said its net income went down 5.1% to P646.2 million as it beefed up its credit provisions amid the coronavirus disease 2019 pandemic.

“Cognizant of the potential impact of the pandemic to the economy, we decided to exercise prudence by increasing provisions to 150% versus previous year,” PSBank President Jose Vicente L. Alde was quoted as saying in the statement.

The bank’s net interest income increased by 21.8% to P3.2 billion. Meanwhile, net service fees totaled P458.1 million.

During the period, the bank’s loan book grew by 3.6% to P165 billion, buoyed by strong demand prior to the enhanced community quarantine. Its gross nonperforming loan ratio was stable at 3.7%. Meanwhile, low-cost deposits grew 10.2% to P60.6 billion.

Total assets inched up by 1.8% to P240.3 billion, while its total capital stood at P34.8 billion. The bank’s total capital adequacy ratio settled at 17.2%, above the regulatory minimum of 10%.

“During the quarantine period, the bank continued to operate 80% of its branches while keeping in place precautionary measures to ensure that our customers and employees are safe,” Mr. Alde said.

The lender’s shares ended trading at P42.65 apiece on Thursday, unchanged from its Wednesday finish. — L.W.T. Noble

Doing Good: stepping up during a lockdown

MUCH of the country has been under a lockdown for the past two months, including Metro Manila. Movement may be hampered for many Filipinos but it hasn’t stopped companies and private groups from helping those in need during this time. Here are some of the people who are doing good during this pandemic:

L’OREAL PHILIPPINES
Personal care company L’Oreal Philippines has committed to giving 1,000 safety haircuts for select partners and hospitals amid calls from the medical community — the doctors, nurses, and other medical frontliners need haircuts in order to do their jobs better. The company also allocated 100,000 skincare and haircare products worth P30 million to be distributed to frontliners and partners in the Philippines.

“L’Oréal Philippines is committed to individuals who have shown courage in these extraordinary times. As a beauty leader, we are doing everything in our power to provide safety and care where it is most meaningful and where we are most needed. We are empowering our brands and our employees to demonstrate solidarity and real human connections, as the only way to fight this pandemic is through our collective efforts,’ said Supriya Singh, L’Oréal Philippines country managing director, in a statement.

ARC REFRESHMENTS CORPORATION
Local beverage company ARC Refreshments Corp., the makers and distributors of RC Cola, has conducted several online live concerts in order to raise funds for the Molecular Biology and Biotechnology (Diliman) Foundation, Inc. The foundation is a non-profit organization that assists laboratories and testing centers in diagnosing cases of COVID-19. The donations will be used to purchase laboratory supplies, testing kits, equipment, among others. It will also be used to cover transportation costs and lab renovations.

PLDT
PLDT has commissioned high-level decontamination services using Steramist Asia’s Binary Ionization Technology (BIT) for the Research Institute for Tropical Medicine in Muntinlupa City and the National Kidney and Transplant Institute in Quezon City. BIT is a powerful disinfectant certified by the Environment Protection Agency which is effective in eliminating the novel coronavirus that causes COVID-19.

The company also turned over care packages containing hygiene and food items to personnel of those hospitals and to the frontline staff of quarantine facilities of the National Task Force. It also donated 210 blankets and financial assistance to Paco Catholic School which is sheltering more than 200 people including street dwellers.

PLDT is also working with the Philippine Disaster Resilience Foundation, Zuellig Pharma, ABS-CBN, Metro Drug, and Go Negosyo to raise funds for personal protective equipment (PPEs), test kits, and ventilators.

HUGGIES
Kimberly-Clark’s Huggies has distributed over 100,000 newborn disposable diapers to children’s hospitals and maternity wards around Metro Manila. To date, Huggies Philippines has provided diapers to the Dr. Jose Fabella Memorial Hospital, Ospital ng Makati, the East Avenue Medical Center, the Valenzuela Medical Hospital, and the National Children’s Hospital, among others.

“Kimberly-Clark has long been a pioneer and trusted expert in baby and child care and we want to assure moms through this difficult period, we will be there for them every step of the way,” said Michael Vainio, general manager, Kimberly-Clark Philippines, in a statement.

DE LA SALLE PHILIPPINES
As part of its ongoing Safe Shelter program, La Salle Greenhills has opened its doors to 50 frontliners from the Cardinal Santos Medical Center. The school has already been sheltering frontliners from the Medical City for over four weeks.

Since the beginning of the quarantine period, De La Salle Philippines (DLSP) has partnered with hospitals in the metro: De La Salle University (DLSU) has supported the staff of Ospital ng Maynila and is housing a number of homeless people, while De La Salle-College of Saint Benilde (DLS-CSB) has assisted the Philippine General Hospital (PGH) by opening its campus as a provisional shelter.

In addition to shelter, daily breakfast and snacks, psychological support services via phone or online, and spiritual support through prayers and reflections through online activities are being provided.

DIAGEO PHILIPPINES
Alcoholic beverage company Diageo has delivered its first batch of alcohol sanitizers as part of its commitment to support the Philippines in its fight against COVID-19. The first batch of 15,000 500-ml bottles has been given to the Office of Civil Defense. The company is to donate 25,000 more bottles in the coming weeks.

KOTEX
Kimberly-Clark’s Kotex line of sanitary pads has donated 200,000 sanitary pads worth P2 million to non-profit organizations and public hospitals in Metro Manila to support women in at-risk areas, medical workers, gender-based groups, and new mothers across the nation.

“As a company that prides itself in producing personal care essentials, we remain committed to support nationwide efforts to address this health crisis,” says Michael Vainio, general manager of Kimberly-Clark Philippines, said in a statement.

“Access to feminine hygiene products is currently harder due to limitations in mobility, resources, and time. Through our donation, we want to help ensure the accessibility to these necessities so women can safely manage their menstruation with dignity during these trying times,” he added.

Toyota resumes in 19 outlets

Toyota Motor Philippines Corp. (TMP) dealer networks have restarted operations for 19 outlets in areas under general community quarantine, changing showroom layouts to ensure physical distancing measures.

The company in a press release on Thursday said that it is applying health measures in line with the health department and the World Health Organization as it reopens stores.

Business operations to repair motor vehicles and motorcycles are allowed in areas under general community quarantine.

TMP said dealers will have regular temperature checks for employees and customers, and will have regular facility disinfections, especially for common areas.

The dealers changed the layout of their showrooms and service reception areas, and will limit the number of people allowed inside the facilities at any given time.

TMP dealers will only accommodate confirmed service appointments booked on their recently launched online service booking mobile app MyToyota PH.

Dealers that have reopened in Luzon include La Union, Isabela, Tuguegarao, Calapan, Puerto Princesa, and Camarines Sur.

Reopened Visayas locations include Roxas, Negros Occidental, Tagbilaran. Tacloban, Calbayog, Dumaguete, and Aklan, while Mindanao locations include Cagayan de Oro, Iligan, Valencia, General Santos, Kidapawan, and Butuan.

“While we are facing challenging times, this also presents an opportunity to come back better and stronger, to review our current processes and find improvements, to constantly provide ever better products and services, and to make our team members’, customers’, and partners’ lives safer and more convenient,” TMP President Atsuhiro Okamoto said.

“We are working hard to prepare our dealerships and ensuring that everyone will be safe upon their visit. We look forward to serving our valued customers again.”

Toyota Financial Services Philippines had also extended its payment terms, as well as the expiring policies under the Toyota Insure and warranty coverages, until after the enhanced community quarantine is lifted. Toyota vehicles scheduled for periodic maintenance services are also under a grace period until the end of the quarantine. — Jenina P. Ibañez

ILO checklist to help mitigate COVID-19 at work

It appears to me that the authorities have not issued any specific guidelines for companies that may be affected by the pandemic after the lifting of the lockdown. No, we are not talking about financial assistance, but how do we ensure that our workers and managers are protected from the spread of COVID-19 as soon as they report back to work? Could you please help us determine a comprehensive and systematic protocol to ensure the safety and health of our workforce while they’re inside our office and factory? — Fearful Nelly.

On a scale of one to 10 with 10 as the highest, how confident are you after the lifting of the lockdown? Surely, the situation will be different in the next few months and in the years to come. But think of a specific number to help you understand your problem and the rest of the world. Now consider the options. Would it be better to temporarily close the business for several months?

Or would it be better to continue operations subject to strict compliance with health and safety protocols? Or simply maintain a minimal workforce inside the office to support those who are assigned to work from home to keep the business running?

What would make your management confidently increase your number to 10? It’s not easy to guess, without much data. The long list of possible answers (or guesses) makes us realize the obstacles to returning to work. There could be more bad things in store for us, if we are not extra careful in handling workplace situations during the pandemic.

I checked the website of the Occupational Safety and Health Center and found only a generic, 454-page “Occupational Safety and Health Standards” manual amended in 1989. It may not be specific enough to address our COVID-19 questions. Anyway, if you’re looking for “a comprehensive and systematic protocol,” I am advising you to consider the “Action Checklist” of the International Labor Organization (ILO) to help your organization in preventing or mitigating the adverse effects of COVID-19 in the workplace.

ILO’S ACTION CHECKLIST
The 8-page checklist dated April 9 which you can find at www.ilo.org must be done in consultation with key people within your organization, including those in the health and safety committees. While we’re still on lockdown, you may want to confer with your people via Zoom or similar platform. But first, I suggest that you download a copy of the checklist and send it to all your department managers for their initial comment.

The checklist is updated and put together by global experts. It comes in four parts: Policy, planning and organizing; risk assessment, management and communication; prevention and mitigation measures; and arrangements for suspected and confirmed COVID-19 cases. Here are some general guidelines and my other suggestions:

One, appoint a team of key people to go through the checklist. This includes senior management, department managers, workers’ representatives, and health and safety committee members. It’s best to consult other key stakeholders, including your company physician, nurse, security and administration personnel. If you are not a union establishment, you may appoint two workers from the ranks, who may have displayed leadership skills in the recent past.

Two, send the checklist to those concerned via email. Require them to answer as objectively as possible. Allow them to answer anonymously, if that is what the majority want. Give them a one-day deadline to complete the checklist. Then assign someone to tabulate the results for you to determine the answer of the majority. If there are serious disagreements, consult and resolve the issue with the team.

Three, agree as a team to come up with the best action plan. If necessary, conduct a follow-up video conference to discuss the issues and challenges. In discussing possible solutions, it is best to alert the team members that they must come up with low-cost or practical answers rather than choose expensive answers. After all, we’re facing a slow economy, and this is not the right time for businesses to spend money.

Last, present the group decision for top management approval. Before that, you may want to consult with experts from the Occupational Safety and Health Center, the Department of Labor and Employment, and the Employers Confederation of the Philippines on certain issues. You may also want to consult with the representatives of your Health Maintenance Organization for assistance that could be a part of your medical plan for employees.

CONCLUSION
There’s nothing more convincing than your own action plan done in consultation with experts and people who will execute your plan within the organization. That’s the essence of co-ownership. Unfortunately, not many people and organizations appreciate that. With the current crisis, it’s about time we rediscover empowerment and engagement as our basic approach in people management.

Trust this process, and expect a pleasant awakening. Times have changed with the new normal of doing things, but realize that it might become a “better” normal with the active help of workers. We must learn to close the door of the new normal and open new doors and windows for many opportunities in the horizon.

In other words, make calculated decisions based on the overall health and safety of people working for the organization, and at the same time protect jobs. It will not only keep you out of legal and ethical troubles, but also save you a lot of mental anguish. Have a long-term perspective in whatever you do, instead of doing what’s easy – shedding jobs.

Having peace of mind is the greatest measure of success.

ELBONOMICS: One concrete and specific measure of success is a peace of mind.

 

Send anonymous questions to elbonomics@gmail.com or via https://reyelbo.consulting

Hindsight is 2020

I have looked forward to 2020 for about three years as it was my forecasted early retirement year. For someone who has been in the work force for around four decades, idea of letting go and taking care of a travel bucket list was enthralling. My plans were meticulous to include advance airfare and hotel bookings to ensure cost savings. Likewise, in a number of cases, the reservations were on a confirmed and nonrefundable basis.

February 20, or 2-20-2020, was the day. It coincided with an event at the bank that acknowledged personnel who rendered long years of service. It was a pleasant take off day for me as Head of the Sector in charge of the recognition.

In two weeks’ time, I was on the first day of my travel list specifically a visit to Georgia, USA to meet my beloved sister Malou. And to make a long story short, the coronavirus disease 2019 (COVID-19) happened and all my travel plans were in jeopardy.

Actually, it began before the trip when the Philippine government announced the travel ban to Hong Kong, which was my stopover to the US. I had to scramble to get a ticket via Seoul and by the time of my travel, South Korea was also being hit by the virus. Luckily, the plane trip went on without a hitch. When I arrived in the US though, many States started their own lockdown and what was originally planned as a criss-cross trip from East to West became a one stop visit.

Returning prematurely in early April, I was one of fourteen passengers in a plane from Atlanta to Los Angeles, part of the half-full long haul flight from Los Angeles to Seoul. And my plane trip to Manila had 10 warm bodies as passengers. Ratio of crew to passengers was almost one to one. I had laid out travel plans for May, July and yearend. Everything is now in limbo.

Many of us have had our plans put awry because of this pandemic. A meme on the internet even proclaimed that one’s worst or most useless investment for the year would be buying a planner diary for 2020. It would have taken a prophet and gifted seer to have predicted the devastation of the world as we saw it in the recent months. Frankly, alternative scenarios are now being drawn on how the rest of the year will look like. One thing is certain, it will be life as no one ever imagined it to be. Recession is definitely in the works. The more important question is — how long and what will it take for most economies in the world to recover?

One wonders how we could have prepared for 2020 if we knew the things would happen as it is. As they say, hindsight has perfect vision. I would have made drastic changes, maybe even postponing my early retirement to a better time. But how does one really anticipate a worldwide catastrophe like this? Anybody who proposes a lockdown even before the virus spreads would have been called out crazy. The natural tendency is to maintain the status quo, especially from the economic perspective.

My personal issues are actually trivial compared to the losses of many. We are all facing losses, whether it’s a missing on a graduation exercise, facing cancellation of sports event, losing our chance to go to church and masses, struggling to earn for those whose employment is unstable and even the inability to visit sick relatives or say goodbye to a loved one.

While I grieve for my inability to fulfill lifelong dreams, when I look at the bigger pain of others, I feel ashamed for my selfishness. Others have more alarming problems such as actually losing a loved one to COVID-19, small businesses in shambles because of lack of a market, postponed celebrations like weddings, or lacking the cash for day to day sustenance.

But as psychologist Dr. Victoria Tait shared, “let’s allow ourselves to feel those losses, whether big or small. Stifling negative emotions doesn’t make them go away. In fact, suppressing them often gives them more power over us!” Vulnerability researcher Brane Brown observed “emotions do not go away because we send them a message that these feelings are inappropriate and do not score high enough on the suffering board.”

In other words, there are times when it’s OK to be NOT OK. A little disgust and some grieving is healthy. Because no one could have seen the pandemic, we will all have different level of losses and it is alright to feel bad for it. David Kessler, an expert on grief, said it’s absurd to think we shouldn’t feel grief right now. Understanding the stages of grief is a start. Acknowledge the grief you may be feeling, manage it and we will find meaning in it.

On another note, allow me to share an initiative of Don Bosco Mandaluyong High School Class of 1972, in cooperation with DBTC, BICC and DBMAA. The program initiative is to reach out and appeal to the friends of Don Bosco worldwide to give back whatever help they can extend in the fight against COVID-19. Funds raised from donations will be used to design and produce ventilators. Our goal is to produce as many ventilators as possible as soon as the prototype receives the mandatory regulatory approvals. Interested parties can send their contributions to Metrobank SA 0763076947814, under any of the following names — Benel Lagua, Pascualito Oliveros or Noel Cariño.

 

Benel Dela Paz Lagua was previously Executive Vice President and Chief Development Officer at the Development Bank of the Philippines. He is an active FINEX member and a long time advocate of risk-based lending for SMEs. The views expressed herein are his own and does not necessarily reflect the opinion of his office as well as FINEX.

PhilCare net income rose 21% in 2019

PhilhealthCare, Inc. (PhilCare) reported a 21% growth in net income to P130.6 million in 2019, driven by sales of its new products.

The health maintenance organization (HMO) saw its revenues rose by 16% to P2.68 billion last year, compared to the preceding year. Benefits, claims, and expenses also increased by 15% year-on-year to P2.5 billion.

“We are really happy that our efforts in 2019 bore fruit, from the aggressive sales of our innovative products like our prepaid health cards to the new partnerships we formed and the new sales channels that we have opened. All these have contributed significantly to the increase of our bottom line,” PhilCare President and Chief Executive Officer Jaeger L. Tanco said in a statement.

PhilCare’s introduced its pioneering prepaid health card which was born following the results of its first Wellness Index in 2014. The study noted that many Filipinos did not have access to healthcare coverage due to a lack of corporate health benefits.

Aside from the health cards, the HMO also introduced its DigiMed service, a form of medical teleconsultation, which it claimed would make “a more pronounced impact as the nation embraces the new normal” spurred by the impact of the global coronavirus disease 2019 (COVID-19) pandemic.

The new service on the HeyPhil app has received 1,500 digital consultations per month so far. It also launched the DigiMed PLUS, a web-based telemedicine application that provides members access to numerous specialists through video calls.

“As the nation gradually prepares itself for the new normal, we continue to gain momentum, seeking for opportune possibilities to leverage change to our advantage, as we dedicate ourselves in fulfilling our mission of making quality healthcare services available to every Filipino,” Mr. Tanco said. — Adam J. Ang

How PSEi member stocks performed — May 7, 2020

Here’s a quick glance at how PSEi stocks fared on Thursday, May 7, 2020.

Local shares close higher on bargain hunting

LOCAL SHARES closed higher on Thursday as investors ignored the economic contraction reported in the first quarter and instead went bargain hunting on the market.

The bellwether Philippine Stock Exchange index (PSEi) went up 13.89 points or 0.24% to end at 5,653.16 in yesterday’s session. The broader all shares index slipped 2.17 points or 0.06% to 3,413.88.

“Philippine shares traded on a positive note as investors brushed off the contraction in 1Q GDP (first quarter gross domestic product) with a possibility that the country may ease the lockdown after May 15 as mentioned by the administration,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said.

The government reported on Thursday that the economy contracted by 0.2% in the first quarter, the first time it sank since 1998 to end 82 quarters of uninterrupted growth.

This is below the 2.9% median estimate in BusinessWorld’s poll of 11 economists and the 6.5%-7.5% target range of the government.

Despite this, the local bourse still managed to end the day with gains, as Mr. Limlingan said investors believed “the country may have soon reached the bottom, and the reopening of economy is soon and imminent.”

The PSEi opened at 5,661 and traded lower for most of the day, hitting a low of 5,599 and reaching a high of 5,670 before closing at 5,653.

AAA Southeast Equities, Inc. Research Head Christopher John Mangun said the lack of selling drew in buyers that took advantage of cheaper stock prices.

“This allowed the main index to end the day close to its high for the day. We may see more profit taking (on Friday), being the last day of the trading week,” he said in an e-mail.

For Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan, the market was consolidating yesterday as seen in the decreased value trading. Value turnover was slower at P4.86 billion from P6.05 billion a day ago. Some 477.90 million issues switched hands from the previous day’s 561.48 million.

“We think that investors with this kind of market performance are on wait and see mode with weaker trading participation in terms of value turnover for the local bourse,” Mr. Tan said in a text message.

Sectoral indices were divided evenly among gainers and losers yesterday. On the one hand, property rose 50.98 points or 1.74% to 2,970.92; financials added 3.05 points or 0.26% to 1,160.69; and holding firms picked up 10.56 points or 0.19% to 5,529.79.

On the other hand, services dropped 22.27 points or 1.65% to 1,325.06; mining and oil lost 58.46 points or 1.27% to 4,512.07; and industrials fell 68.68 points or 0.93% to 7,312.14.

Some 112 names declined, 63 advanced and 42 ended unchanged yesterday.

Net foreign selling persisted at P302.23 million, although lower than the P969.47 million seen the prior day. — Denise A. Valdez

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