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Converge’s listing success seen backed by global digital shift

By Denise A. Valdez, Reporter

BROKERS anticipate a high demand for Converge ICT Solutions, Inc.’s planned P35.92-billion initial public offering (IPO) due to positive prospects for the telecommunications sector.

Last Friday, the fiber internet provider submitted with the Securities and Exchange Commission (SEC) its registration statement to do a public offering of up to 1.5 billion shares at a maximum price of P24 each.

The offering is targeted to begin on Oct. 13 until Oct. 19, with listing on the main board of the Philippine Stock Exchange on Oct. 26.

If it goes according to plan, Converge ICT would be the second company to do an IPO this year, following MerryMart Consumer Corp., whose offering was two times oversubscribed when it raised P1.6 billion last month.

Following this trend of an “essential” business thriving in its public offering, Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financial, Inc., said Converge ICT may also attract investors from a market bereft of IPOs.

“Like MerryMart, we may also see excitement with Converge ICT’s IPO,” he said in a text message Saturday.

He noted since Converge ICT’s business is in the telco industry, it is positioned to benefit from the global shift to the digital economy, which has hastened recently because of the coronavirus pandemic.

“[G]iven the silver lining in the telecommunication industry, the firm’s strong performance, and the opportunities that lie ahead as they tap other regions, we may see a favorable response from the market with respect to its offering,” Mr. Tantiangco said.

AAA Southeast Equities, Inc. Research Head Christopher John Mangun thinks so too, saying the transition of education and office work online makes Converge ICT’s services more important, despite not having voice, SMS or mobile data services in its portfolio.

“The company is trying to raise an enormous amount despite having focused on one business segment of the telco sector which is fixed internet service… However, there is tremendous growth in residential and business fixed line internet,” he said via text on Saturday.

While work-from-home schemes and online learning are not set in stone, Mr. Mangun said companies are expected to choose this option down the line if it lowers costs and if fast internet is available in more households.

Both Mr. Tantiangco and Mr. Mangun said Converge ICT has the potential to further expand its client base, noting the company has already grown by 20% or a record 60,000 new subscribers in June to a total of approximately 750,000 residential subscribers at the end of the month.

“As for opportunities, the company is yet to establish their ground in the Visayas and Mindanao regions giving them further room for growth. Majority of the net proceeds of the company’s primary share sale would go to capital expenditures which in turn would be supportive of their nationwide aim,” Mr. Tantiangco said.

Converge ICT already claims a 54% market share of high-speed residential fixed broadband subscriptions as of March 2020. It also recorded a 76.3% compounded annual growth rate between 2017 to 2019, with its 2019 revenues reaching P9.14 billion.

“We expect demand for broadband subscriptions to increase as supply continues to meet the significant latent demand,” Converge ICT said in its prospectus.

It noted fixed broadband penetration in the Philippines is expected to increase from an estimate of 17% for 2020 to 32% by 2025, citing market research company Media Partners Asia.

“We believe that the Philippine fixed broadband market is currently at an inflection point, with Converge, in particular, serving as a catalyst for market growth as it continues to lead efforts to address current unserved demand,” the company said.

Converge ICT is owned by Pampanga-based businessman Dennis Anthony H. Uy. It is backed by United States-based private equity firm Warburg Pincus, which poured a $225-million equity funding to the company last year.

Pandemic further tightens funding for women

By Jenina P. Ibañez, Reporter

BARRIERS to financing for Filipino women entrepreneurs have been aggravated by the pandemic, social enterprise incubator Villgro Philippines said.

While all businesses struggle to operate amid the pandemic, female-led businesses face delays in receiving funding, Villgro Philippines Chief Executive Officer Priya Thachadi said in an online interview on Wednesday.

“Women are disproportionately affected by the pandemic because now the responsibilities at home are more,” she said, referring to an unequal share of housework and childcare done by women.

“Along with running your business or working, you kind of have to manage that, you have to look after the people in your home.”

Villgro has spent the past 12 months speaking with women entrepreneurs and investors in the country.

Ms. Thachadi said women balancing multiple activities at home face barriers as raising money takes time.

“More women are starting and running businesses than ever before… so why do they not progress or advance when compared to their male-counterparts? Many times, to access formal financing, you need collateral, you need credit history, you need to show a certain threshold of revenue and many women-led (small and medium-sized businesses) actually don’t meet that to access formal financing.”

She said that women-led businesses are usually in industries like retail instead of technology, which attracts more venture capital and other investors.

“They don’t meet the definition of what investors say are high-growth or high-revenue generating industries or sectors.”

During the pandemic, the existing financing issues are exacerbated.

“In the start-up ecosystem and ecosystem for business is, whatever challenges there were before the pandemic have all become deeper. This is because the structures and systems are being stress-tested in this pandemic situation,” she said.

“For example, raising money takes a lot of time. You need to be speaking to investors, due diligence takes a lot of time, and it’s a much longer cycle. Which means that a woman who is balancing multiple things at home has to dedicate, spend even more time because now you have to convince investors, financiers your business can survive the pandemic and all of that takes much longer.”

Villgro in April and May conducted a survey of 36 Filipino women entrepreneurs who have identified significantly reduced operations, issues with mobility, closing market channels, and no cash flow as top issues during the pandemic. These were followed by challenges in declining customer demand, fundraising, and market uncertainty.

Among the respondents 28% said they need between P500,000 to P1 million in capital in the next six months while another 28% placed that need between P200,000 to P500,000.

Breaking down the importance of certain factors to their business, 27 said funding is the most important while 23 said access to market is the most important. A dozen each said they need a business mentor or an industry mentor.

The company is launching its “WE Rise” program to assist women-led businesses rebuild amid the pandemic by providing loan funding and mentorship.

“We really want to spend the first part of the program in rebuilding their business models, readjusting, assessing for the risks of the pandemic,” Ms. Thachadi, adding that the focus will then shift to improving internal financial management and growth in the next year.

The company is partnering with a major financial institution for a short-term collateral-free working capital loan between P100,000 to P500,000 with  interest. They plan to select 20 enterprises.

Century Properties reservation sales improve, reach P6 billion

CENTURY Properties Group, Inc. (CPG) recorded improving reservation sales in the second quarter to boost its first-half pre-sales to P6.1 billion.

In a statement over the weekend, the listed property developer said it pre-sold a total of 1,925 homes during the six-month period, equivalent to 651 condominium units and 1,274 house and lot units.

This is after the company enhanced its digitization efforts, which increased its reservation sales in the second quarter to P3.16 billion from the first quarter’s P2.96 billion.

“Century Properties was quick to adapt to digital selling and contactless transactions that generated healthy reservation sales for the first half of 2020. From an investment standpoint, real estate is more stable and safe in the long term, and it’s a hard asset that you can use,” CPG President and Chief Executive Officer Marco R. Antonio said in the statement.

He added that the coronavirus disease 2019 (COVID-19) pandemic changed consumer behavior, and buyers are “starting to appreciate the value of home ownership to protect the health and wellbeing of their families.”

CPG has so far sold 94% of its 14,945 condominium units across projects in Quezon City, Pampanga, Mandaluyong City and Parañaque City.

In the first quarter, earnings of the company fell 36% to P234.44 million due to lower revenues from its urban vertical projects. The company attributed the decline to the eruption of Taal Volcano in January and the imposition of a Luzon-wide lockdown in March.

Mr. Antonio said the positive sales momentum recorded in the first half is expected to accrue in next year’s earnings. For now, CPG’s focus is to be prudent in its finances considering the uncertainties with the remaining COVID-19 quarantine measures.

“We are also keeping a close watch on market conditions in the property industry and the banking sector to get timing indications for next project launches,” Mr. Antonio said.

Shares in CPG at the stock exchange closed at 37 centavos each on Friday, down 1.33% from the previous day. — Denise A. Valdez

Consultations via telemedicine service soar — Globe

GLOBE Telecom, Inc. (Globe) said the coronavirus pandemic brought an increase in demand for its telemedicine service in May.

“On increase in consultations, it did by over 450% in May as compared to January,” Globe said in a statement sent to BusinessWorld via phone message last week when asked for an update on its telemedicine consultations.

Globe has been pushing for telemedicine via KonsultaMD. “We will keep introducing new digital concepts to enhance people’s lives. I think the cycle of adoption and appreciation will be much shorter now given the pandemic,” Globe President and Chief Executive Officer Ernest L. Cu was quoted as saying in a news release last week.

“In many ways, the health crisis has given digital transformation a much-needed push. It has been a long process convincing people to adopt digitalization but I think this situation has made them realize that digital does work. It’s not only for millennials or for the young people, it is really for everyone since it provides a certain level of convenience,” he added.

KonsultaMD is an affiliate of 917Ventures, a wholly owned subsidiary of Globe.

QualiMed Health Network, owned and operated by Mercado General Hospital, Inc. in partnership with Ayala Land, Inc., has teamed up with KonsultaMD to enable its telemedicine service called TeleCheQ.

According to Globe, it is currently working on another partnership. “The other one is still for roll out, so we can’t disclose yet,” it said last Thursday.

Globe has announced its plans to “aggressively” build cell sites in the third quarter of the year, covering several areas in Metro Manila, north and south Luzon, Visayas, and Mindanao.

Mr. Cu said local government units should relax their permitting requirements so that telecommunications companies can fast-track the execution of their cellular tower projects.

“We are investing billions of pesos to connect the rest of the public to the digital world to enable things like working and learning from home and yet, there are so many obstacles along the way. I think it is really incumbent upon our local officials to provide telecom infrastructure to their constituents. Telco is like water or power. It is something that people need and want,” he said. — Arjay L. Balinbin

With no paparazzi or parties, Paris prepares for virtual fashion week

PARIS — Paris is usually abuzz during its prestigious Haute Couture presentations in July, its hotels heaving with fashionistas and monuments turned into catwalk venues.

But in a makeover caused by the coronavirus crisis, top designers will instead be experimenting this week with online showcases to try to keep clients hooked.

Brands from Christian Dior to Valentino are pressing ahead with collections and shows through an organized schedule of videos running from July 6-8.

That has helped keep some textile suppliers and artisans going, though other businesses are feeling the absence of a larger event keenly.

“The impact of a virtual fashion week on our business is serious, because there are no more clients to drive around,” said Guillaume Connan, whose limousine company usually ferries A-listers around between shows.

Paris’s multiple fashion weeks generate some 1.2 billion euros ($1.35 billion) for the local economy every year, the federation grouping couture houses estimates.

At the Haute Couture week, a select club of designers display one-of-a-kind, handmade outfits.

“I will miss the audience, I will miss my friends,” said couturier Stephane Rolland.

But Christophe Josse, another French couturier who has also produced a film, said he had enjoyed being able to highlight the intricacies of his designs differently and would consider doing it again.

“I was a little hesitant at first, wondering what we’d be able to say in a digital fashion week,” Josse said.

It is still unclear whether the format will be a hit with his clients, who include wealthy Americans who would normally travel to a show, Josse added.

Physical catwalk displays are likely to be back on the agenda in Paris by September and brands are already booking venues, said Frederic Hocquard, who oversees tourism and some cultural affairs at Paris’s city council.

He added that the hiatus this time could have some positive side effects, despite the economic hit — including as an inspiration for greener formats in future, which would not generate as much congestion or waste. — Reuters

AC Energy probes Iloilo City power barge blast

AYALA-LED AC Energy, Inc. (AC Energy) said an investigation is now being conducted seeking the cause of the explosion of its power barge in Iloilo City that caused an oil spill last Friday.

“As of this time, we are conducting an investigation of the incident and a reputable third-party firm will be engaged to conduct a thorough investigation as to the root cause of the explosion that ignited the fuel gases inside the sealed tank, in order to avoid similar situations from happening in the future,” the Ayala energy firm said in a statement over the weekend.

About 251,000 liters of bunker fuel from AC Energy’s Power Barge 102 unit were spilled on Iloilo Strait, covering an area of 1,200 square meters in Barrio Obrero, Lapuz district, according to the city’s disaster risk reduction and management office in a Facebook update on Saturday.

AC Energy said containment procedures were undertaken using spill booms from its barge, the Philippine Coast Guard, and Petron Corp. Skimming operations were also done.

Around 105 affected families were temporarily relocated to a nearby elementary school, as of Saturday.

“We are committed to exerting all means to clean up the oil spill as soon as possible and support the affected communities,” the energy company said. — Adam J. Ang

Claims of overpriced fertilizer unfounded, bid process ongoing

FRESH claims of overpriced fertilizer procured for distribution to farmers have no basis because the bid process for the second round of acquisitions is ongoing, the Department of Agriculture (DA) said.

In a statement Saturday, Agriculture Secretary William D. Dar rejected allegations put forward by farmers’ group SINAG (Samahang Industriya ng Agrikultura), saying: “We are wondering where SINAG Chairman Rosendo O. So has gathered his information, as the second round of bidding has not yet been completed. However, early indications show that the public bidding for various lots for Regions 1 and 2, and North Cotabato is considered a failure.”

SINAG’s Mr. So had alleged that prices realized in the bid process for urea fertilizer were “overpriced and disadvantageous to the government.”

“In the case of SINAG, Mr. So is again misleading the media and the general public. It is grossly unfair, and he should apologize publicly,” Mr. Dar said.

The second round of fertilizer auctions has a budget of over P1.3 billion. The first round awarded lots after an auction in May.

“Just like what happened in May, the DA again qualified only one bidder per lot (contract/s grouped together to form one lot). And all the bid prices are again ridiculously overpriced,” Mr. So said.

“The DA pushed through with the next round of bidding despite protests from various farmer groups that the first contracts awarded are overpriced. Even lawmakers from both the House of Representatives and the Senate have cautioned the DA against holding succeeding biddings,” Mr. So added.

According to SINAG, the DA auctioned six lots for Region 1, Region 2, and the North Cotabato province in the second round.

So far, the qualified bidders are Goldman’s Supply Corp. for North Cotabato with a bid of P975 per bag; First Planters Agri Solution for La Union and Ilocos Sur at P975 per bag and Pangasinan at P985 per bag; and Universal Harvester, Inc. for Cagayan, Isabela, Nueva Vizcaya, and Quirino at P975 per bag.

Mr. So said that some of SINAG’s members who are distributors and outlet owners revealed that the fertilizer retail prices in Regions 1 and 2 are lower than the DA’s reported prices.

“United Harvester, Inc., which won the contracts for Region 2, (sells fertilizer at retail) for only P860 per bag. In some areas, for as low as P850 per bag. That amounts to a P125 overprice per bag of fertilizer,” Mr. So said.

Mr. So said that Region 1 has a urea fertilizer allocation of 797,089 bags, while Region 2 has 614,233 bags, for a total of 1.41 million bags.

In May, the DA awarded out four initial contacts worth P1.8 billion to La Filipina Uy Gongco Corp. and Atlas Fertilizer to supply Central Luzon, CALABARZON (Cavite, Laguna, Batangas, Rizal, and Quezon), Western Visayas, and Central Visayas.

The DA has a budget of P5.69 billion for the fertilizer procurement, with a maximum price of P1,000 per bag. — Revin Mikhael D. Ochave

Shangri-La Hotels gets ready to welcome back guests

HONG Kong-based multinational hospitality company Shangri-La Hotels and Resorts has announced the “rigorous hygiene and safety protocols” for all its properties worldwide including cleaning high-touch surfaces more frequently and using medical grade disinfectants and sanitizers, as the group prepares to welcome back guests and chart their way to recovery.

“We’ve seen that moving forward, health and safety, would be number one value proposition [and] flexibility for guests would be very important… people want to be able to make a reservation today and cancel it tomorrow with no penalty,” John Rice, vice-president for operations in the Philippines and general manager of EDSA Shangri-La, said in a digital conference on June 25.

Shangri-La has six properties in the Philippines: EDSA Shangri-La in Mandaluyong City, Shangri-La Makati, Shangri-La at the Fort in Taguig City, JEN Manila by Shangri-La in Pasay City, Shangri-La’s Boracay Resort and Spa, and Shangri-La’s Mactan Resort and Spa in Cebu City.

The Inter-Agency Task Force on Emerging Infectious Diseases announced on June 4 that it is allowing partial hotel (and other accommodations) operations provided that they function using an “in-house skeletal workforce” and must have a certificate of authority to operate from the Department of Tourism. The directive is for places under looser forms of lockdown called general community quarantine and modified general community quarantine.

Metro Manila is currently under general community quarantine.

Mr. Rice said that they see food and beverage outlets as the first revenue streams to come back and are optimistic about Philippine recovery from the pandemic owing to its resilience.

“I think traditionally, the people in the Philippines are incredibly resilient. There’s been a lot of crisis and natural disasters over the years and over the decades, and the people of the Philippines are very resilient, and they come back,” he said.

Restaurants will recover first followed by staycation packages as people won’t be traveling abroad “but they’ll be looking internally for a vacation or a break,” he explained.

International corporate markets, he said, will slowly start to come back in the first quarter of 2021 and the international travel market will start coming back in the second quarter of 2021.

“In terms of getting our business levels back to any sort of semblance to pre-COVID-19, we don’t see that happening until earliest, or fully, until 2022,” he said.

And since health and safety will be of utmost importance, the group partnered with cleaning and hygiene products company Diversey to aid in the cleaning of facilities and rooms within its hotels.

Mr. Rice also said that all paper collaterals have been replaced by digital platforms which will be cleaned frequently. Public areas will be cleaned hourly and will be following proper social distancing. The hotels will also be using UV light on all high-touch surfaces. — Zsarlene B. Chua

Through the looking glass: South Korean ‘augmented reality’ mirror allows touchless cosmetics shopping

SEOUL — An augmented reality (AR) mirror at the new Seoul flagship boutique of cosmetics powerhouse Amorepacific makes easy work of seeing if that scarlet shade of lipstick or long-lash mascara suits you — even if you’re wearing a face mask.

The mirror takes a photograph of the customer’s face and analyses it, recommending products based on skin texture, and addressing any blemishes, wrinkles or dark circles. Customers can then see a computer-generated image of what they would look like wearing a wide range of foundations, blush, eye products and lipsticks.

“Due to the coronavirus, it felt uncomfortable to test cosmetics after someone had used them,” said shopper Cho Yu-lim, 24, as she peered into the full-length mirror, which has “Find Your Makeup Look” written on it. “This is very convenient as I can see the actual color on my face without even touching my face.”

In addition to social distancing, South Korean government guidelines recommend shoppers try out cosmetics on the backs of their hands, not on their faces.

“It was frustrating as I couldn’t try cosmetics on my face … but it was fun to find the product that suits me best through this AR device,” said 20-year-old student Song Da-hye after hours of testing products on her hands at other stores.

South Korea has been praised how it has handled COVID-19, but Asia’s fourth-largest economy has experienced persistent outbreaks in recent weeks, mostly in the capital.

To minimize human contact and limit the risk of virus spread, the shop has also put QR codes next to all products on display, so customers can check details with their mobile phones instead of talking to staff.

“It took very little time and I didn’t need to talk to anyone before I made my purchases,” Cho said. — Reuters

Treasury bills, bonds on offer this week to fetch lower rates

GOVERNMENT securities on offer this week will likely fetch lower rates on the back of strong liquidity in the market.

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

On Tuesday, the BTr will offer P30 billion in fresh 10-year Treasury bonds (T-bond).

National Treasurer Rosalia V. de Leon said the T-bond tenor on offer on Tuesday was changed from the seven-year T-bonds penciled in earlier as investors want higher yields.

“Given low rate regime, investors looking for yields. So stretching tenors for higher rates. And we have not issued long tenors for sometime,” Ms. De Leon told reporters via Viber on Friday.

Two bond traders said the rates for the short-term securities will likely decline by five to 10 basis points (bps) from the yields fetched in the auction last week.

“T-bill rates for auction will likely move 5 to 10 bps lower from the previous auction amid continued demand for short-term papers given the elevated liquidity in the financial system,” the first trader said via Viber over the weekend.

Last week, the BTr upsized its T-bill award to P26 billion on the back of soaring bids totaling P131 billion, more than six times the P20-billion program.

It borrowed P7 billion via 91-day papers and P14 billion in 364-day T-bills, higher than the programmed P5 billion and P10 billion, respectively. Meanwhile, it fully awarded its P5-billion offer of 182-day T-bills.

Strong demand caused rates to drop across-the-board, with the three-month papers fetching an average yield of 1.746%, down from the 2.068% recorded at the June 22 auction.

The average rate of the six-month papers also declined to 1.892% from 2.159% previously, while the one-year securities fetched 1.98%, also lower than the 2.408% seen previously.

Meanwhile, the second trader said by phone that the fresh 10-year T-bonds to be offered on Tuesday may fetch a coupon rate of around 2.75-3%, while the first trader sees its yield settling at 2.625% or 2.75%.

“Market players will continue to bargain hunt for yields in the primary market as it’s seldom for the BTr to offer securities around the long-end of the curve nowadays,” the first trader said.

The last time the BTr offered the 10-year tenor was on Feb. 18. The offering of reissued bonds was met with tenders worth P83.5 billion, prompting the Treasury to make a full award of P30 billion and open the tap facility. The 10-year T-bonds fetched an average rate of 4.409% at that offering.

At the secondary market on Friday, the 91-, 182- and 364-day T-bills were quoted at 1.827%, 1.873% and 1.948%, respectively, while the 10-year T-bonds’ rate stood at 2.814%, based on the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System’s website.

The second trader said strong demand will persist, especially for the short-term securities, as liquidity in the market remains strong. However, the trader said demand for the 10-year papers might not be that strong but will remain ample.

The government has set a P205-billion borrowing program for July and will offer P145 billion in T-bills via weekly auctions and P60 billion in T-bonds to be auctioned off every other week.

It borrows from local and foreign lenders to plug its budget deficit seen to hit 8.4% of gross domestic product this year. — B.M. Laforga

Meat inspection stations to be set up in five ports

THE Bureau of Animal Industry said it will establish inspection facilities at five major international ports this year to step up monitoring of potentially infected meat imports.

In a statement, Agriculture Secretary William D. Dar said the inspection facilities will be established on the recommendation of the private sector.

The Philippine Chamber of Agriculture and Fisheries, Inc. and the United Broilers Association have complained about government efforts to keep out African Swine Fever (ASF) and avian flu, and blamed outbreaks in the Philippines on lax import inspection.

The two groups said the government is missing out on potential revenue from meat import taxes while also helping the industry avoid ASF and bird flu.

The DA (Department of Agriculture) and the National Meat Inspection Service also plan to invest in biosecurity measures in cold storage warehouses.

The biosecurity measures aim to prolong the freshness of poultry and livestock products.

“Investment in biosecurity is a necessity and may be part of the new normal,” Mr. Dar said.

Researchers have discovered a new strain of swine flu in China that is capable of causing a new pandemic.

The new swine flu strain named G4 has genetically descended from the H1N1 strain that caused a pandemic in 2009 and has shown the potential to infect humans. — Revin Mikhael D. Ochave

I-Land signs up Signet Technologies to market Sucat condo project

THE property arm of ISOC Holdings, Inc. is working with technology provider Signet Properties to market its mid-rise condominium project in Sucat.

In a statement Sunday, I-Land, Inc. said it contracted Signet Properties to lead the online sales and marketing of its I-Land Residences-Sucat project.

“Signet Properties will spearhead the online sales and marketing efforts of I-Land Residences-Sucat by providing our lead generation and management platforms to their salesforce. This will ensure maximum occupancy rate of the residence when the project is turned over by 2023,” Signet Properties Chief Executive Officer Andre Mercado was quoted as saying in the statement.

The company is a known provider of solutions using 360-degree aerial views, 3D model units and commute map integrations.

I-Land Vice-President May V. Lopez said it is the company’s goal to reach more potential sellers and home owners both locally and abroad by partnering with Signet Properties.

“We are glad to announce that I-Land is working with Signet Properties, as they understand the unique innovations that we are introducing to the real estate industry,” she said in the statement.

I-Land Residences — Sucat is a two-hectare residential community comprising six mid-rise condominium buildings. It is the first mid-rise development in the Philippines with an LEED (Leadership in Energy and Environmental Design) certification.

ISOC Holdings is chaired by Michael C. Cosiquien, co-founder of listed engineering firm Megawide Construction Corp. — Denise A. Valdez

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