System Loss, China Loan, PPC

1. ERC lowers system loss cap to 6.5%  from 8.5% for 2018. The cap will be further lowered gradually until it reaches 5.5% in 2021.

Notes: MER's system loss performance is 6.05%. While AP...two of it's power distribution firms has higher than 6.5%....Catobato Light (8.34%), Davao Light (7.18%)...AP may get affected right away...in the long term...both company will be affected...requiring more investment to improve the loss....hmmmm.

Notes: I think they can still make up using other power generation revenues and increasing power consumption...but still loss is loss...TT

2. Government will pursue loans from China despite its price tag of 2-3 percent per annum, even if Japan can offer funding at interest rates between 0.25-0.75 percent.

Notes: Nothing free ha...but can i borrow with that interest rate personally? :)

3. Pryce Properties Corp. (PPC) is building at least 15 new LPG refilling plants in Visayas and Mindanao to make its products closer to consumer markets. All the expansion projects will be finished till 2019.

Notes: It recorded a good income/revenue in 2017. VisMin's volume growth was 22%..while Luzon was 4%..Is it because of PPC's market share or...general volume growth...maybe both.

PSE correction history

Notes: Nobody knows how deep and long the corrections will affect. In many cases, we don't even know if it's correction or crash down. There are many symptoms why we should be cautious for the mean time, but even this one....nobody knows...SAD.

The data is from COL Financial.
Using the formal definition of a stock market correction, which is a drop of more than 10% but less than 20%, we identified seven episodes of corrections. Based on the seven episodes, the median magnitude is 13%, while the median duration from peak to trough is four months. On a more optimistic side, there have been shallower corrections of 11% that took only two months to complete.

Date		Magnitude	Duration (month)
Jan-92	Mar-92	13%	2
Feb-05	Apr-05	11%	2
Oct-10	Feb-11	12%	4
Jul-11	Sep-11	11%	2
Apr-13	Dec-13	17%	8
Mar-15	Jan-16	16%	10
Jul-16	Nov-16	15%	4

Interconnection Charge, RRR, Hot Money

1. Senate Bill 1636 or the Lifetime Cellphone Act

Senators proposed removal of interconnection fees charged by telecommunications firms for all calls and SMS messages.

Notes: It may reduce the burden for users to transfer to 3rd player. It might have the biggest effect for existing telcos, I think. On top of all the infra  and regulation related support from the government...

2. Reduced RRR (Reserve Requirement Rate) will further weaken Peso.

Notes: Higher estimated inflation(4.34%). More liquidity, TRAIN, Weak Peso...looks like money supply to the market will pick up....but how long?

3. NET hot money inflow in Jan 2018 was $162 million. Jan 2017 was $301 million and Dec 2017 was $457 million. 

Notes: At least it was not outflow.

MARKET ISSUES

[last partial update : 02/28/2018]

Macro and Overseas
(a) US interest rate : 1.25 ~ 1.5%, May increase 3 times in 2018
(b) US 10 yr bond : around 2.9....uptrend..now..When it will hit 3.5%?
(c) Crude Oil Price : around $61.54, Can maintain around $60?
(d) Phil Inflation : 4% in Jan, 2018...need to check several months.
(e) Phil Interest Rate: 3%
(f) Phil GDP : 6.7% in 2017....might be stable/outperform over the next years..
(g) Comprehensive Tax Reform Program : SEZ registered companies will be affected?
(h) China 2017 GDP growth : 6.9%...is it a turning around? fundamental will be stable in 2018 also...
(i) FX : 52.35...still uptrend...when it's gonna stop? 55? 56? Who earns dollars?
(j) OFW remittance : $28.1 billion in 2017, 4.3% increase from 2016
(k) Trade War: will ignite? I don't think so.

RRR, Oil Price

1. BSP reduced Reserve Requirement Ratio (RRR) to 19% from 20%. It will be effective on March 2, 2018. It will gradually lessen its reliance on reserve requirements for managing liquidity in the financial system. This 1% will free around 90 billion pesos.

Notes: BSP said...it has other methods to control..what are they? more money in the market....will support growth...is it good for stock also? or only good for banks? how bout inflation? when they gonna raise interest rate? Some say...BSP may raise 0.75% this year...

2. US shale producers are ramping up output. Russia/Saudi agreed on the need to cooperate to prop up prices.