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SEC expects strong capital market rebound after pandemic

THE Securities and Exchange Commission (SEC) is hopeful that the country’s capital market will have a strong comeback once the coronavirus disease 2019 (COVID-19) pandemic is over.

In an embargoed statement, the corporate regulator said it anticipates a strong recovery for both the stock market and the bond market, evidenced by sustained interest from investors while the COVID-19 crisis is ongoing.

“We are optimistic that the Philippine capital market will make a strong recovery from the impact of the COVID-19 pandemic,” SEC Chairperson Emilio B. Aquino said in the statement.

“We take the success of recent fundraising activities as one indication of the investing public’s continued confidence in the strength and resilience of our corporate sector, capital market and economy as a whole, especially with the reinforcements coming from the government,” he added.

The SEC cited several examples that prove continued trust from investors while the outbreak is ongoing: the successful offering of P15-billion bonds by SM Prime Holdings, Inc. on March 25; strong investor demand that pushed Bank of the Philippine Islands to announce a P33.9-billion bond issuance on March 27; and oversubscribed offering of Rizal Commercial Banking Corp. to raise P7.05 billion on April 7.

It added Aboitiz Power Corp. is planning to issue within the next two quarters the fourth tranche of its P30-billion fixed-rate bonds composed of P9.55-billion bonds.

“We are hopeful that the Philippine capital market will come out stronger and even more resilient in the end. As such, it can better contribute to the promotion of financial inclusion and wealth democratization toward the fulfillment of our shared aspiration for a secure, comfortable life for Filipinos,” Mr. Aquino said.

Declining investor sentiment due to the COVID-19 pandemic has pushed the stock market to enter bear territory on March 9. The Philippine Stock Exchange index (PSEi) is now at 5,510.83 as of Wednesday, down 34.5% from its 52-week high of 8,419.59.

As much as P1.16 trillion have been wiped out from the market at one point, when trading resumed after two days of shutdown due to the government’s Luzon-wide lockdown to contain the virus.

But Mr. Aquino noted the decline of the PSEi is no different from what’s being observed around the world. He added it is “crucial” at such a time like this to keep the capital market operating efficiently and reliably amid the COVID-19 pandemic.

The regulator has rolled out several initiatives to support the market as it operates under unique conditions. Some of these are immediately approving off-site trading protocols and relaxing disclosure requirements for listed companies.

“The SEC will continue monitoring developments in the capital market and remain proactive in supporting trading participants, issuers and investors in seeing through the uncertainties brought about by the COVID-19 pandemic,” Mr. Aquino said. — Denise A. Valdez

Being creative with skincare during lockdown

DURING the first days of quarantine, my skin cleared up despite the high stress levels I was under. And now, a month into quarantine, my skin has changed and unlike before when I had a multitude of options at my disposal to adapt to the changes, quarantine has forced me to be creative.

When life was still normal, I had on rotation about a dozen products I used depending on how my skin felt day-to-day and I did have a separate routine in the morning and in the evening. But since quarantine closed many of the online stores selling the products I use, I had to stick with what I have. Here are the products that I have been making work this quarantine.

(NOTE: Since it’s summer, my is more normal-to-dry instead of the usual dry-to-drier.)

Let’s start with cleansing, I ran out of my Avene Extremely Gentle Milk Cleanser (200 ml for P1,280 in Watsons) so I switched to the ever reliable Cetaphil Gentle Cleanser (250 ml for P462 in Lazada) as my morning cleanser, then at night I currently use Palmer’s Skin Therapy Cleansing Oil (150 ml for P595 in Rustans) because my favorite, Calmia Oatmeal Therapy Cleansing Oil (200 ml for P570 in Althea Korea), ran out. The Palmer’s cleanser has a more waxy scent because of its cocoa butter and vitamin E — neither oils are known for being fragrant — so those who don’t like that kind of scent, please stay away. It also has a thicker texture than Calmia but Palmer’s rinses away faster, which blew my mind. And since I double cleanse, I currently use Senka Perfect Whip Moist Cleansing Foam (120 g for P279 in Lazada) which thankfully I haven’t run out of yet. If there’s one product I’m scared of running out of, it’s the Senka, because I wasn’t able to buy any more — I have no extras and no substitutes.

For toner, I am using Hada Labo Hydrating Lotion (170 ml for P685 in Lazada). It’s a thick, almost gel-like toner with hyaluronic acid that I rarely use in the morning because I prefer lighter toners like my recently used-up Goodal Camellia Moisture Barrier Toner (200 ml for P1,000 in Zalora) but since those under quarantine can’t be choosers, I had to use the Hada Labo in the mornings. The trade-off is I rarely use moisturizers now — both in the morning and at night — because I get all my moisture from Goodal Camellia Moisture Barrier Ampoule (200 ml for P1,450 in Zalora). The Goodal Camellia line has ceramides that protect the skin from pollutants and retain moisture. This is such a good line that I’ll be buying some more once everything is over.

On top of the ampoule, I use my Kiehl’s serums: the Midnight Recovery Concentrate (30 ml for P2,950 in Kiehl’s website) that has squalane and evening primrose oil for the evenings, and the Powerful-Strength Line-Reducing Concentrate (50 ml for P3,900 in Kiehl’s) that has 12.5% vitamin C to brighten skin and has antioxidant properties. Both serums have been mainstays in my routine for years.

This brings me down to just four products in the mornings and six products at night. I just ran out of my AHC The Pure Real Eye Cream for the Face (30 ml for P920 in Watsons) so no more eye creams for me for now.

But what I did learn from this toned-down routine is my skin probably doesn’t need as many products as I usually use and it can still function perfectly with less products. Does this exercise make me think of making this my real, everyday routine? It depends because my skin is probably behaving so well because I’m indoors all the time and my skin is not being damaged by pollution or the sun as much. Let’s re-evaluate once we get our normal lives back.

And has it stopped me from loading my cart with skincare products and placing an order expecting delivery after quarantine? Nope, because skincare for me is self-care and therapy. It’s an expensive hobby but it does make me feel like I have my life together even as a pandemic rages just outside the front door. — Zsarlene B. Chua

AboitizPower clinches top credit rating for retail bonds

ABOITIZ Power Corp. (AboitizPower) received the highest issue credit rating for its fourth tranche of fixed-rate retail bonds out of the P30-billion bonds registered in 2017 under the shelf registration program of the Securities and Exchange Commission.

The Aboitiz-led power firm over the weekend said that the Philippine Rating Services Corp. (PRS) gave the company offering bonds up to P9.55 billion a rating of PRS Aaa, meaning the company has a “very strong” capacity to meet its financial obligations.

Also, it was given a stable outlook, which denotes the firm is unlikely to change in the next 12 months.

The bonds, initially worth P5 billion and which can be oversubscribed up to P4.55 billion, are expected to roll out by the second or third quarter of 2020 in one to three series with tenors ranging from two, five and seven years.

AboitizPower earlier told the stock exchange that it plans to use the proceeds from the bonds to reimburse equity infusions and fund succeeding infusions into AA Thermal, Inc., as well as to invest in Therma Power, Inc. for the construction of two units of the 668-megawatt supercritical coal-fired power plant of GNPower Dinginin Ltd. Co.

The energy company engaged BDO Capital & Investment Corp. and First Metro Investment Corp. as joint issue managers, as well as joint lead underwriters, along with China Bank Capital Corp. It also tapped the BDO Unibank, Inc. Trust & Investments Group as its trustee.

The company issued the first tranche of the retail bonds worth P3 billion on July 3, 2017. The second tranche was out on Oct. 25, 2018, amounting to P10.2 billion, and the third, which is worth P7.25 billion, on Oct. 14, 2019.

PhilRatings also maintained the PRS Aaa credit rating and a stable outlook for the company’s outstanding P30.45-billion bonds.

Ratings by the local debt watcher are based on available information and projections at the time that the rating review was performed.

In 2019, AboitizPower reported a 21% drop in net income to P20.2 billion from P25.4 billion in 2018, brought down by the decline in operating revenues and an increase in operating and interest expenses.

It recorded an attributable net sellable capacity of 3,455 megawatts (MW) in the year with a plan to add 935.2 MW. The power company aims to have 4,000 MW attributable net sellable capacity this year.

This year, over half of the P73-billion capital expenditures of its parent Aboitiz Equity Ventures, Inc., or P41 billion was allotted to AboitizPower. — Adam J. Ang

Doing Good: stepping up during a lockdown

THE battle with COVID-19 rages on as Luzon and other parts of the country enter their fourth week in quarantine and frontliners need all the help they can get to win the war. Here is another list of those who are supporting the frontliners.

DIAGEO
British alcoholic beverage company Diageo has pledged to donate 60,000 liters of 96%-strength ethyl alcohol to governments and local manufacturers in the Philippines, Vietnam, and Myanmar. The alcohol, typically used to produce alcoholic beverages, can be used to produce “over a million bottles of sanitizers or disinfecting agents where necessary,” according to a company statement. The company had previously pledged to donate alcohol to the UK, Ireland, Italy, the US, Brazil, Kenya, India, and Australia, to create a total of 8 million hand sanitizers for frontline medical workers.

eBET
Asian mobile i-gaming supplier eBET has donated 9,800 sets of personal protective equipment (PPE) to the Makati Medical Center (MMC) “in response to the call of health workers for protection against the highly infectious coronavirus disease,” said a company statement.

The company said they chose to donate to MMC because “it is one of the hospitals that has experienced a surge of patients since the start of the pandemic in the country.”

“We hope that these protective personal equipment will enable our health workers to perform their duties with a sense of security,” eBET CEO Evan Spytma said in the release.

DE LA SALLE-COLLEGE OF SAINT BENILDE
De La Salle-College of Saint Benilde (DLS-CSB) has opened its doors to approximately 60 professionals and health workers from the Philippine General Hospital. The project, called Safe Shelter, saw some facilities in the campus converted into temporary shelters “to provide hospitality and relief to its guests in need of rest and recuperation,” the school said in a statement.

The college added that it is utilizing decontamination booths and strictly abides by safety and hygiene protocols.

“Even as we each try to do our part in stemming the spread of the COVID-19, there are those on the frontlines who, by virtue of their calling, are doing even more. These doctors, nurses, and providers of support services are today’s heroes, who confirm their heroism repeatedly, every day that they choose to come to work and stand by those entrusted to their care,” Benilde President Br. Edmundo “Dodo” Fernandez, FSC, said in the statement.

In a separate program, industrial design students and faculty of DLS-CSB and the University of Santo Tomas came together to produce 3D-printed face shields. They have so far produced 300 masks and are creating more. Several other programs are ongoing to produce PPEs in collaboration with De La Salle University and other DLS-CSB departments.

VILLAR GROUP
The Villar Group has donated and installed disinfecting tunnels in a number of hospitals to aid “health care workers, staff and everyone visiting the hospital get disinfected, as they go in and out of the facility, to curb the spread of the virus,” according to a release.

The tunnels are equipped with sensors that automatically spray a disinfectant mist when people enter it.

The hospitals given the tunnels are the Research Institute for Tropical Medicine, Las Piñas General Hospital, Don Jose N. Rodriguez Memorial Hospital, Rizal Medical Center, Quirino Medical Center, the Philippine Heart Center, the Lung Center of the Philippines, San Lazaro Hospital, and Santa Ana Hospital. — ZBC

IATF approves unrestricted movement for agri workers

THE Department of Agriculture (DA) has obtained approval to remove restrictions on food production activities, including the movements of farmers and fishermen who have been caught up in local quarantine orders during the coronavirus disease 2019 (COVID-19) outbreak.

Agriculture Secretary William D. Dar said that workers in the agriculture and fisheries sectors play a crucial part in sustaining the food supply as the country deals with disruptions during COVID-19.

“We are heartened that during the 21st teleconference of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID), we approved ‘that all agriculture and fishery stakeholders must be considered frontliners and their movements shall remain unhampered’,” Mr. Dar said.

IATF recently approved the DA’s so-called Plant, Plant, Plant program which aims to increase agricultural production and more efficient food marketing and distribution to major markets.

Under the Rice Resiliency Project of the program, DA aims to achieve rice self-sufficiency to 93% by the end of the year. Self-sufficiency targets for rice were effectively abandoned under the Rice Tariffication Law, which eased restrictions on imports.

“We aim to boost palay production to 22.12 million metric tons (MT), equivalent to 13.51 million MT of rice or 93% of the country’s total rice demand at 14.46 million MT,” Mr. Dar said.

He added that the National Food Authority (NFA) is committed to maintain rice buffer stock levels by rice milling and procurement of the domestic harvest of rice farmers and cooperatives.

“We will see to it that the price of rice in the market will be guided by the prices before the enhanced community quarantine started,” Mr. Dar said.

Mr. Dar also advised the consuming public and local government units (LGUs) to proceed with the usual trade and only purchase food that they need for their weekly requirements to maintain balance in the food supply chain.

“We have our DA regional field offices moving around provinces, ensuring the movement of food supply from production areas to the markets. We are seeing to it that trucking is not impeded and that basic food items remain affordable,” Mr. Dar said. — Revin Mikhael D. Ochave

Johnson & Johnson’s sets timeline for COVID-19 vaccine

By Vann Marlo Villegas
Reporter

JOHNSON & Johnson’s is developing a vaccine against coronavirus disease 2019 (COVID-19) that is expected to be available for emergency use in 2021.

Paul Stoffels, Johnson & Johnson’s chief scientific officer, said the company plans to start Phase 1 clinical study of the vaccine in September this year and the clinical data and efficacy of the vaccine will also be available by the end of the year.

“It is anticipated that the first batches of a COVID-19 vaccine could be available for emergency use authorization in early 2021,” Mr. Stoffels told BusinessWorld in an e-mail response.

“We will continue to work with local and international health authorities, governments, regulators and NGOs (non-government organizations) to ensure that if development is successful and products approved, we achieve broad and timely access to our healthcare solutions,” he added.

The company is targeting to provide a global supply of more than one billion vaccine doses and expand global manufacturing capacity by establishing new manufacturing capacity in the United States, Europe, and/or Asia.

Mr. Stoffels, vice-chairman of the executive committee, said vaccine development usually takes five to seven years before it is ready for market use but the company is expediting the timeline of the vaccine against COVID-19.

“This could allow vaccine availability for emergency use in early 2021,” he said, adding that the company “is well positioned through our combination of scientific expertise, operational scale and financial strength to bring our resources in collaboration with others to accelerate the fight against this pandemic.”

Mr. Stoffels said that the vaccine program for COVID-19 uses Johnson & Johnson’s-owned Janssen Pharmaceutical, Inc.’s technologies, AdVac® and PER.C6®, used for rapid development of vaccine candidates.

These technologies were also used to manufacture the company’s ebola vaccine and develop Zika, RSV (respiratory syncytial virus), and HIV vaccine candidates, which are currently in Phase 2 or Phase 3 of clinical development stages.

The company has identified a lead vaccine and has two back-ups but Mr. Stoffels said the focus is on the production of the lead candidate and “will assess any additional needs” as testing continues.

The company has expanded its partnership with the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response at the US Department of Health & Human Services to speed up the vaccine research program.

Mr. Stoffels said that the company and BARDA committed more than $1 billion investment to co-fund the vaccine research, development and clinical testing. They have also provided additional funding separately for the expansion of the work in identifying potential antiviral treatments against COVID-19.

The World Health Organization said globally, the COVID-19 pandemic has infected more than 1.6 million individuals and killed 99,690.

The Department of Health said there are 4,428 confirmed cases in the country with 247 deaths and 157 recoveries.

Learn at home, with style

YOU might be taking some online classes here and there during this quarantine, but we’re pretty sure you haven’t attended one by Spanish luxury fashion house Loewe.

As large slices of the world population are urged to #stayhome, Loewe Creative Director Jonathan Anderson created the concept Loewe en Casa, turning a forcedly shared situation into an occasion of actual and factual enrichment. Loewe en Casa unfolds as a series of online events, talks, and workshops taking place through Instagram Live for everyone to enjoy in the domesticity of their own space. Paced in regular appointments throughout the week, it celebrates craft, innovation, and artistic expression exploring the words and the work of collaborators involved in the Loewe cultural projects and the finalists of the Loewe Craft Prize.

The range of subjects runs from metalwork, weaving, ikebana (Japanese art of flower arrangement), goldsmithing and ceramics to furniture-making, woodcraft, metalsmithing and textile making. The project merges the theoretical and practical in talks that include studio tours, craft demonstrations, and interactions with artists and designers. The ongoing list of involved personalities includes: Tokyo metalsmith Koichi Io; designer Sophie Rowley; ceramics artist Irina Razumovskaya; weaving artist Idoia Cuesta; artist and woodworker Julian Watts; metal artist Adi Toch, who’ll be showing the temporary make-shift studio she’s built in her home to allow her to keep working; furniture designers Jim Partridge and Liz Walmsley in conversations about working and living together; Giovanni Corvaja holding a tour of his home laboratory-style studio where he combines ancient ideas of alchemy with cutting edge technology; Ikebana artist Watarai demonstrating the Japanese art form, working with flowers, twigs, branches and plants to create unique pieces. Adi Toch’s demonstration is scheduled next Sunday at 4 p.m. CET (10 p.m. in Manila).

In the Philippines, Loewe is exclusively distributed by Stores Specialists, Inc., and is located at Shangri-La Plaza Mall East Wing. Visit www.ssilife.com.ph or follow @ssilifeph on Instagram for more information.

T-bills, T-bonds may fetch lower rates

RATES OF government securities on offer this week will likely decline to follow the trend of falling yields in the market amid monetary easing, strong liquidity and plunging oil prices.

The Bureau of the Treasury (BTr) is looking to raise P20 billion in Treasury bills (T-bills) on Monday, broken down into P10 billion in 91-day papers and P5 billion each via 182- and 364-day T-bills.

On Tuesday, the BTr will offer reissued one-year Treasury bonds (T-bonds) worth P30 billion. The one-year T-bonds were first issued in 2014 and have a remaining life of 11 months and eight days. It has a coupon rate of 3.5%.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort expects yields on the T-bills to be “steady to slightly lower,” while a bond trader said these could dip by 10 to 20 basis points (bps).

For the one-year T-bonds, Mr. Ricafort said the rate could fall within 3.6-3.8% levels while the bond trader sees its yield settling between 3.5% and 3.7%.

At the secondary market on Friday, rates for 91-, 182- and 364-day T-bills closed at 3.293%, 3.448% and 3.717%, based on the PHP Bloomberg Valuation Service Reference Rates.

In last week’s auction, the BTr made a full award of the P20-billion T-bills it offered out of total bids worth P37.6 billion, snapping four consecutive auctions that resulted in full rejections amid soaring rates.

Broken down, it awarded P10 billion in 91-day papers out of total tenders worth P15.95 billion at an average rate of 3.413%, up 38.9 bps from the previous rate.

The government accepted P5 billion each as planned via 182- and 364-day T-bills from P10.915 billion and P10.81 billion in bids, respectively. The average rate for the six-month papers inched up 15.5 bps to 3.553%, while that for the one-year securities also rose 28.8 bps to end at 3.845%.

Mr. Ricafort said even in the secondary market, yields eased as global oil prices continue to plummet to record lows, coupled with a stronger peso.

The trader said the auctions this week could be met with strong demand across all tenors as the market remains liquid following stimulus measures from the Bangko Sentral ng Pilipinas (BSP).

“Strong demand will persist across-the-board as financial market players continue to cheer BSP’s stimulus measures. Moreover, investors continue to show appetite for short dates given the uncertainties surrounding the pandemic,” the trader said via Viber on Friday.

“We may also see some reinvestment flows from a bond maturity amounting to P120 billion on April 11,” the trader added.

Mr. Ricafort said BSP Governor Benjamin E. Diokno’s hint on another rate cut as well as easing inflation could drive yields lower in the upcoming auction.

“Local interest rate benchmarks (PHP BVAL yields) eased week-on-week and could still continue to ease amid the sharp decline in global oil prices to among the lowest in 18 years, stronger peso exchange rate vs. the US dollar among the strongest in a month and also among the strongest in 2 years, recent signals from BSP Governor Diokno about a possible cut in policy rates even before the next BSP monetary policy-setting meeting on May 21, 2020, recent easing of inflation rate to 2.5% in March 2020, reduction in the MLR (minimum liquidity ratio) to 16% (from 20%) for standalone thrift banks, rural banks, and cooperative banks,” Mr. Ricafort said in a Viber message on Saturday.

Mr. Diokno said on Sunday that as the country faces a “once-in-a-lifetime crisis” amid the coronavirus disease 2019 (COVID-19) pandemic, the BSP could slash the key policy rate — the overnight reverse repurchase rate — below 3%.

“It is now clear that reverting to where we were in 2018 — policy rate at 3.0% — is no longer an appropriate policy goal. A deeper cut is warranted in response to the expected sharp economic slowdown,” Mr. Diokno told reporters in a text message, noting that inflation is seen ending close to the lower end of the BSP’s 2-4% target for the year.

“These new realities call for bolder but appropriate moves on the part of the BSP. The challenge is to cushion the impact of the economic slowdown on people, firms and the financial system,” he said. “The monetary authorities’ job, in coordination with fiscal authorities, is to manage a ‘soft’ landing and ensure that economic takeoff begin quickly once the pandemic fades.”

The BSP has cut rates by a total of 150 bps since 2019, almost completely unwinding the 175 bps in hikes it implemented in 2018 amid multi-year high inflation.

Its latest move was 50-bp reduction last month, which brought the overnight reverse repurchase rate to 3.25% and overnight lending and deposit rates to 3.75% and 2.75%, respectively.

Meanwhile, the central bank chief said the remaining 200-bp reduction in banks’ reserve requirement ratios (RRR) is “forthcoming based on available data, the needs of the economy, and the utilization of the additional liquidity.”

The Monetary Board last month gave Mr. Diokno the authority to cut banks’ RRR by a total of 400 bps this year. Big banks’ RRR was already slashed by 200 bps to 12% as of April 3.

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

Batangas, Quezon rice farmers receive P5,000 subsidy

SMALL RICE farmers in the CALABARZON region have received P5,000 each under the Financial Subsidy to Rice Farmers (FSRF) program, the Department of Agriculture (DA) said.

DA Region IV-A Regional Director Arnel V. de Mesa said as of April 8, a total of 15,353 farmers from Batangas and Quezon Province received their FSRF assistance.

“Farmers who tend a one-hectare farm or less were those who received P5,000 each for their day-to-day farming activities,” Mr. De Mesa said.

The FSRF beneficiaries are farmers in the Registry System for Basic Sectors in Agriculture (RSBSA) and whose province was not included in the Rice Farmers Financial Assistance (RFFA) program of the DA.

The DA, the Land Bank of the Philippines local government units (LGUs), will continue to distribute cash assistance to more rice farmers from Batangas, Laguna, and Quezon Province.

Meanwhile, over P34.8 million worth of vegetable seed was procured and delivered to all the five agricultural program coordinating offices in Region IV-A, as part of the DA’s urban agriculture project.

Mr. De Mesa said that the Agricultural Training Institute (ATI) in CALABARZON has been tapped to provide information materials for urban farming, including growing and harvesting indigenous vegetables within 30 to 35 days.

The urban farming materials will be included in the vegetable seed packs to be distributed around Region IV-A.

“All city and municipal agriculturists may devise a strategy on how to distribute the vegetable seeds to prioritize farmers with established marketing linkages,” Mr. De Mesa said. — Revin Mikhael D. Ochave

Investors pick up Jollibee stock on a bargain, but some see sales risks to remain

INVESTORS pounced on the Jollibee Foods Corp. stock last week as they took advantage of its attractive valuation following weeks of sell-offs.

Jollibee was the fifth-most traded stock during the three-day trading week from April 6 to 8, with P837.86-million worth of 7.53 million shares exchanging hands at the Philippine Stock Exchange during the period.

Jollibee shares closed at P120 apiece on Wednesday, up 17.6% from its closing price of P102 each on April 3. Its stock price lost 43.7% since the start of the year.

“Prior to the start of [last] week, Jollibee was the second worst-performing stock in the index with a year-to-date share price performance of -52.8%. Thus, [last week’s] gain was mainly driven by investors who bought the stock on the assumption that the worst-case impact of COVID-19 (coronavirus disease 2019) on the company’s business is largely priced in,” said Philippine National Bank (PNB) Vice-President and Head of Equity Research Division Alvin Joseph A. Arogo in an e-mail.

In a separate e-mail, Philstocks Financial, Inc. Research Associate Claire T. Alviar attributed the stock’s gain on several factors, namely: the news on the slower domestic inflation rate, the developments on Jollibee’s operations, the declaration of cash dividends, and the “technical rebound” following the stock’s huge sell-off in previous sessions.

“Jollibee is at bargain level in terms of Price-to-Book Value (currently at 2.45 times), [which is] much lower than the five-year average range of 6.4 times to 7.1 times… Its price-to-earnings ratio (trading below 20 times earnings), is cheaper compared with the five-year average of around 39 times earnings. Investors are cautiously picking at bargain level, but risks remain given that same-store sales growth might decline in the Philippines and in abroad as well…,” she said.

In a statement last Tuesday, Jollibee Founder and Chairman Tony Tan Caktiong said that while the pandemic has caused “unprecedented disruption” in the company’s operations, they are “already planning” for the full restoration of operations.

The company expects growth to “resume even if gradually” through its delivery, take-out and drive-thru business channels.

In the same statement, however, the global fast-food operator said it was reducing its capital expenditure allocation for the year by 64% to P5 billion from the previously announced P14 billion due to the operational adjustments brought by COVID-19. Operating costs are also being reduced “significantly” for its stores, commissaries, support services and main offices all over the world.

Moreover, the company also declared a cash dividend of P0.62 per share of common stock, of which dividends will be paid on May 22 to stockholders on record as of April 27.

“From dine-in and serving cooked meals to mostly take-out and offering ready-to-cook meals, we can see how the company shifted its strategy to reduce damages of COVID-19 on its earnings… Some investors are also buying up the stock to be entitled to dividends,” Ms. Alviar said.

On the other hand, PNB’s Mr. Arogo, said this shift towards take-out and delivery would, at best, “only minimize” the disruptive impact of COVID-19 on its financial performance this year.

“We believe quick-service restaurants like Jollibee would operate in a more challenging environment both during and after a virus-driven lockdown. This is because even if the restaurant dine-in resumes, overall consumer confidence, especially for discretionary spending, would likely remain weak due to the economic downturn. There is also a higher chance that the turnaround in the company’s recent international acquisitions could take longer,” he said.

“[W]e expect the higher than normal share price volatility to continue because of uncertainties regarding the economic impact of COVID-19,” he added.

Jollibee has 5,981 stores across the globe as of end-February: 3,317 in the Philippines and 2,664 abroad.

The company previously announced operational limitations both locally and abroad due to government-imposed lockdowns in select regions in light of COVID-19.

In the Philippines, the delivery business has grown 5% in the early part of 2020 from 3% in the early part of 2019. But as several stores have closed due to the Luzon lockdown, those that remained open for drive-thru and take-out orders have risen at an average of 50% same store sales growth in the early part of the year.

For Philstocks’ Ms. Alviar: “[G]ood management will help the company to sustain growth in the coming years so some investors are already accumulating at bargain levels.”

“But for now, the COVID-19 pandemic impact, together with the possible losses from Smashburger and CBTL, could still hit Jollibee’s earnings this year, and the stock price might continue to be volatile,” Philstocks’ Ms. Alviar said.

Jollibee’s attributable earnings stood at P6.33 billion in 2019, 14.4% lower from a year ago due to a 25% contraction in operating income to P5.87 billion.

Ms. Alviar placed Jollibee’s stock first and second support levels at P100 and P88, respectively. Meanwhile, first and second resistance levels are pegged at P120 and P140, respectively.

“Technical-wise, it has to break the P120 resistance with strong volume before it continues to rally, and failing to do so, will pull the stock to its support of P100.00. We expect sideways movement with downside bias next week, after its recent rallies,” she said.

The fast-food chain controls brands such as Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, PHO24, Yonghe King, Hong Zhuang Yuan, Dunkin’ Donuts, Highlands Coffee, Hard Rock Cafe, Smashburger, and Coffee Bean and Tea Leaf (CBTL). — L.O. Pilar

Fabergé eggs anyone?

WHAT do you give a woman who has everything? If you were a Romanov, the answer was apparently a jeweled egg.

Every Easter starting in 1885, Empress Maria Feodorovna of Russia received a jeweled egg from her husband, the penultimate Czar of Russia, Alexander III, each one from the House of Fabergé. The first egg was a white enamel egg with a yolk of pure gold, which opened to reveal a gold pendant shaped like a hen. After the Czar’s death in 1894, his son, Nicholas II, continued the tradition, presenting one egg to his mother, the Dowager Empress, and his wife, Empress Alexandra. The eggs were a surprise, even to the Czar himself: the only requirement for each commission was that each one had to be unique, and must open to contain a surprise. These led to projects such as jeweled Easter eggs that contained portraits in ivory, or moving mechanical trains, or perfect miniature replicas of the Romanov palaces scattered across the Empire.

With the fall of the Romanovs came the fall of the man who bejewelled them. According to legend, Peter Carl Fabergé was driven out of his factory by the Soviets, giving him only enough time to put on his hat and coat. The family escaped Russia, and Peter Carl Fabergé died just two years after his flight in 1918.

While his sons set up a company in Paris using their father’s name, their biggest jobs then were to repair the Fabergé pieces of scores of Russian emigres. In America, businessman Armand Hammer convinced his friend Samuel Rubin to register the name Fabergé Inc. The family sued for the name, but the case was resolved in an out-of-court settlement. The name passed to many other individuals and entities (even Unilever at one point). The vestiges of the House of Fabergé Limited, with a division called Fabergé Heritage Council, has as members two of Peter Carl Fabergé’s great-granddaughters.

As for the Imperial Easter eggs themselves, they’re now scattered across the globe in private collections of billionaires and royals. Some of the eggs are still lost, with one found as recently as 2014. The Third Imperial Egg, given by Alexander III to his empress, was found in an American flea market, selling for $14,000 — while it was supposedly worth $33 million.

For Easter, we’re presenting a collection of Fabergé eggs that non-royals may be able to afford; recent creations by Fabergé. They’re tiny, and go for about a few thousand dollars.

18K ROSE GOLD SPIRAL PENDANT
This Spiral Egg Pendant comes set in 18 karat rose gold decorated with 36 round brilliant cut white diamonds and is presented on a 50 cm chain. Fabergé has also added a 0.01ct ruby at the bottom of the egg — a ‘hidden gem’ to surprise and delight the wearer.

18K YELLOW GOLD AND DIAMOND EGGS CROSSOVER RING
The Yellow Gold Crossover Ring features round white diamonds set in 18 karat yellow gold. In keeping with its fondness for delight, surprise, and discovery, Fabergé has concealed a ruby on the inside of the ring.

SUNBURST 18K ROSE GOLD DIAMOND AND PINK SAPPHIRE EGG CHARM
The Sunburst Pink Sapphire Rose Gold Charm features round white diamonds and a pink sapphire set in 18 karat rose gold. The egg charm is 14mm. (The bracelet is sold separately).

PALAIS 18K ROSE GOLD DIAMOND AND PINK GUILLOCHÉ ENAMEL EGGS CROSSOVER RING
The Palais Tsarskoye Selo Rose Crossover Ring features pink guilloché enamel and white diamonds, set in 18 karat yellow gold. Fabergé has concealed a ruby on the inside of the ring.

I LOVE YOU 18K YELLOW GOLD AND DIAMOND EGG PENDANT
The I Love You Yellow Gold Pendant features round white diamonds set in 18 karat yellow gold, engraved with the words “I Love You.” The egg is 18mm.

All the items are available at Faberge.com.

Peso to appreciate on demand for liquidity

THE PESO is seen to appreciate versus the dollar this week on the back of demand amid the extended Luzon lockdown and continued improvement in market sentiment due to stimulus measures to cushion economies from the impact of the coronavirus disease 2019 (COVID-19).

The local unit closed at P50.585 versus the dollar on Wednesday, stronger by 9.50 centavos from its P50.68 finish on Tuesday, according to data from the Bankers Association of the Philippines.

The peso also gained 29.5 centavos from its P50.88 close on April 1 and 13.5 centavos from its April 3 finish of P50.72 per dollar.

Markets were closed on Thursday and Friday due to the Holy Week holidays.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the stronger peso last week to market sentiment on the latest trade deficit data.

“Narrower trade deficit data, among the narrowest in about 2.5 years, amid the recent year-on-year declines in imports and modest growth in exports supported the recent gains of the peso,” Mr. Ricafort said in a text message.

Meanwhile, a trader said the peso gained as the central bank announced a reduction in the minimum liquidity ratio (MLR) of smaller banks.

“The strengthening was more of a continuation of the trend of peso’s strength. A little bit of risk on for us because there was a recent announcement for liquidity ratio cut for thrift banks so it’s a bit of easing so it’s a positive for peso,” the trader said in a phone call.

The Bangko Sentral ng Pilipinas (BSP) trimmed the MLR requirement for smaller banks to 16% from 20% until end-2020 in a move to boost the liquidity of thrift, rural and cooperative banks amid the extension of the enhanced community quarantine in Luzon.

For this week, Mr. Ricafort said continued positive market sentiment could drive the peso higher.

“Major catalyst include any continuation of improved global market risk appetite as seen recently in view of the record stimulus measures worldwide and unprecedented monetary easing by central banks in an effort to better deal with the economic fallout largely due to the COVID-19 outbreak and any risk of recession,” he said in a text message.

Meanwhile, the trader said the peso will remain range-bound as demand for cash persists.

“Since the lockdown is extended, liquidity is still the main factor so I think demand for peso will still be there,” the trader said.

The enhanced community quarantine in Luzon which was supposed to end by 12:00 am of April 13 has been extended by two more weeks to April 30 as the government said more time is needed to flatten the curve and to allow for mass testing, with Health officials noting that cases have yet to peak.

COVID-19 cases in the country reached 4,428 as of Saturday, with 247 casualties, according to the Department of Health. Recoveries totaled 157.

For this week, Mr. Ricafort sees the peso playing around the P50.45 to P50.85 band versus the dollar while the trader gave a forecast range of P50.45 to P50.90. — L.W.T. Noble

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