20131129-Maybank_KERPL-Daily_Edge_12页_356kb

Daily Edge Summary - 29 November 2013

Core Content

The document provides an economic and market analysis for the Philippines, focusing on GDP growth, sector performance, and stock market insights. It also includes details on the impact of typhoon Yolanda and upcoming events in the financial market.

Main Points

GDP Growth and Economic Outlook

• GDP Growth: The Philippines' GDP grew by 7% YoY in 3Q13, slightly below the consensus estimate of 7.1% and the forecast of 7.2%, but still within expectations.
• Sustained Growth: The growth is sustained despite the absence of election-related spending and a high base in 3Q12.
• Above-average 2014 Growth Likely: Even after factoring in the impact of typhoon Yolanda, the GDP is expected to grow at 7% in 2013 and 6.8% in 2014.
• Sector Performance:
  • Manufacturing and Services were the main contributors to growth.
  • Private Consumption increased to 6.2% from 5.1% in 2Q13.
  • Fixed Investments saw a 22.3% surge, the fastest since 2010, driven by durable equipment.
  • Construction slowed in 3Q13 due to minimal private sector activity, but is expected to benefit from reconstruction efforts.
• External Demand:
  • Exports grew by 10.6% in 3Q13 after two quarters of decline.
  • The drag from net exports reduced from 4.9ppts in 1Q13 to 1.7ppts in 3Q13.
• Typhoon Impact:
  • The typhoon affected Region 8 (Leyte and Samar), which contributed 2.3% to 2012 GDP but contracted by 6.2% in 3Q13.
  • Reconstruction efforts are expected to mitigate the impact over time, though logistical challenges may delay recovery.

Market Insights

• Utilities:
  • Otto Energy Ltd is set to assume 60% working interest in SC55.
  • The company will receive USD3m and USD24.5m from BHPB upon acceptance of the re-assignment and drilling of the first exploration well.
  • A 2014 work program includes the drilling of the Hawkeye-1 well, with a Best Estimate of 89MMbbl of oil.
• Property:
  • SM Land Inc signed a 300-hectare reclamation deal with Pasay local government, but it is unclear if the deal is permissible under new PPP guidelines.
  • SMPH (SM Prime Holdings Inc) is in the process of reclamation and is under review for its stock performance.

Key Information

Analysts

• Head of Research / Economist: Luz Lorenzo
• Contact: (632) 849 8836 | luz_lorenzo@maybank-atrke.com
• Other Analysts:
  • Laura Dy-Liacco
  • Rommel Rodrigo
  • Lovell Sarreal
  • Katherine Tan
  • Ramon Adviento

Upcoming Events

• 29 November:
  • Imperial Resources, Inc.
  • Abra Mining & Industrial Corporation
• 2 December:
  • Prime Orion Philippines Inc.
• 4 December:
  • Asiabest Group International Inc.
  • Lodestar Investment Holdings Corporation
  • Nihao Mineral Resources International Inc.

Stock Analysis

• BDO:
  • Share price: 76.40 PHP
  • Target price: 98.00 PHP
  • Upside: 28%
  • Recommendation: BUY
• BPI:
  • Share price: 91.95 PHP
  • Target price: 96.00 PHP
  • Upside: 4%
  • Recommendation: HOLD
• CHIB:
  • Share price: 60.00 PHP
  • Target price: 57.75 PHP
  • Upside: (4)%
  • Recommendation: HOLD
• EW:
  • Share price: 25.00 PHP
  • Target price: 31.80 PHP
  • Upside: 27%
  • Recommendation: BUY
• RCB:
  • Share price: 43.45 PHP
  • Target price: 67.00 PHP
  • Upside: 54%
  • Recommendation: BUY
• SECB:
  • Share price: 115.10 PHP
  • Target price: 122.50 PHP
  • Upside: 6%
  • Recommendation: BUY
• UBP:
  • Share price: 125.00 PHP
  • Target price: 127.00 PHP
  • Upside: 2%
  • Recommendation: HOLD
• ALI:
  • Share price: 28.20 PHP
  • Target price: 37.21 PHP
  • Upside: 32%
  • Recommendation: BUY
• FLI:
  • Share price: 1.31 PHP
  • Target price: 2.48 PHP
  • Upside: 89%
  • Recommendation: BUY
• RLC:
  • Share price: 21.85 PHP
  • Target price: 25.17 PHP
  • Upside: 15%
  • Recommendation: BUY
• SMPH:
  • Share price: 16.02 PHP
  • Target price: 20.34 PHP
  • Upside: 27%
  • Recommendation: UNDER REVIEW
• VLL:
  • Share price: 4.87 PHP
  • Target price: 6.70 PHP
  • Upside: 38%
  • Recommendation: BUY
• JFC:
  • Share price: 180.50 PHP
  • Target price: 191.00 PHP
  • Upside: 6%
  • Recommendation: HOLD
• PIP:
  • Share price: 4.61 PHP
  • Target price: 6.05 PHP
  • Upside: 31%
  • Recommendation: BUY
• RFM:
  • Share price: 5.20 PHP
  • Target price: 6.05 PHP
  • Upside: 16%
  • Recommendation: BUY
• URC:
  • Share price: 121.60 PHP
  • Target price: 154.00 PHP
  • Upside: 27%
  • Recommendation: BUY
• PF:
  • Share price: 218.00 PHP
  • Target price: 310.00 PHP
  • Upside: 42%
  • Recommendation: BUY

Summary of Economic Indicators

• PSEi: 6,169.96, with a 1.92% increase.
• Turnover (PHPm): 6,784.50, with a -42.46% change.
• PLDT ADR (USD): 59.80
• PLDT ADR (PHP): 2,615.35, with a 0.13% increase.
• Ave interbank rate: 2.03
• PHP/USD rate: 43.74, with a -0.04% change.

Conclusion

The document outlines a generally positive outlook for the Philippine economy, with above-average growth expected for 2014. While the typhoon had a notable impact on certain regions, the overall economic performance remains strong, supported by robust private consumption and durable equipment investments. The stock market analysis highlights several companies with BUY recommendations and positive upside potential.