NEWS IN BRIEF
P/$ rate closes at P53.695 to $1
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The peso rate closed lower at P53.695 to the US dollar yesterday at the Philippine Dealing System of the Bankers Association of the Philippines from P53.65 the previous day. The weighted average rate depreciated to P53.669 from P53.586. Total volume amounted to $321 million.
10-yr T-bond fetches 10.125%
The Bureau of Treasury yesterday sold a 10-year treasury bond at a coupon of 10.125 percent at its last auction for the year. This was lower than the rate awarded when the Bureau of Treasury reissued another 10-year treasury bond in June. Ample liquidity and reduced supply of new government debt bolstered demand for the paper, traders said. Tenders for the P4-billion offer amounted to P12.117 billion. The government awarded the entire P4-billion offering. When the Bureau of Treasury reissued the 10-year treasury bond in June, the offer fetched an average yield of 11.760 percent. On the secondary market, the yield for the 10-year government paper stood at 10.9031 percent. National Treasurer Omar Cruz said the outcome of Tuesday’s auction was "overwhelmingly better than the expectations in the market." A survey by the Bureau of Treasury estimated the coupon for the 10-year treasury bond at between 10.25 percent and 10.85 percent.
PLDT to upgrade network
Philippine Long Distance Telephone Co. (PLDT) said it will install an all-Internet protocol next generation network (NGN) over the next two to three years, in a bid to expand its product offerings. "One of the key benefits of upgrading to NGN is the ability to enhance our voice and data service offerings as well as expand our product range to potentially include video (i.e., IPTV or Internet Protocol Television)," PLDT said in a statement to the stock exchange. It did not say how much will be invested in the project. PLDT’ chairman Manuel Pangilinan said that PLDT plans to venture into Internet-based TV after it failed to acquire a satellite-based pay TV company, Dream Satellite. "PLDT continues to look into new opportunities arising from advances in technology and analyze business models being undertaken by other fixed line operators who are also rolling out broadband services," PLDT said.
6 vie as TV sale advisors
Six financial groups are vying to become the financial adviser of a government agency overseeing the privatization of two broadcast networks. Jose Bengzon III, head of the Privatization and Management Office, said yesterday that the agency has shortlisted CLSA Exchange Capital, ING Bank, KPMG Laya, Mananghaya & Co., Ernst & Young, BPI Capital Corp., and Investment Capital Corp. as qualified bidders. He said bidding for the six groups vying to advise on the privatization of Radio Philippines Network and Intercontinental Broadcasting Corp. will be opened on Dec. 21. The winning group will be required to draw up the terms for the auction and valuation for the two broadcast networks, which the government has been trying to sell since 1997.
PSE okays C&P capital cut
The Philippine Stock Exchange (PSE) said it has approved a reduction in C&P Homes Inc.’s listed shares to 479.6 million from 4.796 billion previously, with a par value of P1.00 each. The exchange also told brokers in a circular that a trading suspension on C&P shares will be lifted tomorrow. The reduction is part of a capital restructuring plan which the Securities and Exchange Commission recently approved. Under the plan, C&P will lower its authorized capital stock to P500 million from P5 billion and its paid-up capital to P479.6 million from P4.796 billion. The resulting surplus will be used in part to wipe out its accumulated deficit. After that, C&P will increase its authorized capital stock to P7 billion, to be divided into 7 billion common shares with a par value of P1.00 apiece. The new shares will be issued to certain holders of the company’s long-term commercial paper that have agreed to convert their debt exposure in the company into equity. The exchange said C&P has yet to apply for the listing of the additional shares that will form part of its P7-billion authorized capital.
RP sovereign bonds firm
HONG KONG, Dec. 13 (Reuters) — Philippine credits firmed on Tuesday, extending a recovery from last week’s sell-off in a broadly stable market ahead of the US Federal Reserve’s policy meeting. Philippine bonds have been the best performers among Asian dollar-denominated debt this year, a factor that attracted a bout of selling last week. "Philippine bonds trade very technically ... if it looks cheap relative to the rest of emerging markets people tend to buy," said Sin Beng Ong, a sovereign credit analyst with JP Morgan, Singapore. He said Philippine bonds were still two basis points wider than Brazilian bonds on average across the curve. Philippine bonds due in 2015 were trading at 108.75/109.25, a quarter of a point higher than New York. Its 2030 bonds were at 112.50/113, three-eighths of a point higher.
The Philippine component of the JP Morgan index has risen 11.89 percent since the start of the year, compared with the JP Morgan composite Asian dollar bond index , which has gained 3.82 percent. "We are seeing bottom fishing emerge after last week’s selling. It started with the offshore accounts and now onshore is joining," said a Manila-based trader.
Japan aids Asean integration
KUALA LUMPUR, Dec. 13 (AFP) — Japan said Tuesday it would provide ¥7.5 billion ($62.5 million dollars) to support the integration of ASEAN as it tries to hammer out a free-trade deal with the 10-country Southeast Asian bloc. Prime Minister Junichiro Koizumi made the commitment in a summit with leaders from ASEAN on day two of the group’s meetings in the Malaysian capital Kuala Lumpur. The offer came one day after Japan said it would provide $135 million to help fight bird flu in Asia. In a joint statement, Japan and ASEAN said they would "deepen and broaden the strategic partnership" between them and resolved to conclude the deadlocked talks on a free-trade pact. Japan’s Trade Minister Toshihiro Nikai said last week he hoped to conclude the negotiations with ASEAN by March 2007. It is the first time Tokyo has tried to hammer out a free-trade deal with an entire region. The two sides said in their statement that they were on an "equal footing to address common challenges and opportunities." The financial assistance will go to the ASEAN Development Fund as well as ASEANJapan cooperation funds, they said.
Japan gives $135 M to bird flu fight
KUALA LUMPUR (XFN-Asia) — Japan said it would give $135 million aid to Southeast Asian nations to help fight the spread of the bird flu virus. On the sidelines of the annual ASEAN summit, Tokyo also said it would host an international conference on the disease next month, bringing together Asian nations, donor countries and international groups. Roughly $46.8 million of the aid will go toward helping Asian nations stockpile antiviral drugs for 500,000 people as well as testing materials and disease control clothing for 700,000 people, Japan said in a statement. Another $49.1 million will be directed to international groups like the World Health Organization (WHO) and the UN Children’s Fund (UNICEF), particularly for hard-hit nations like Vietnam, Thailand and Cambodia. Separately, $2 million would be spent via WHO to improve monitoring of the disease across the region. The World Organization for Animal Health (OIE) and the Food and Agriculture Organization (FAO) will receive $19.3 million to strengthen the region’s policies for chicken farming, reporting mechanisms and disease control systems. Finally, some $19 million will be spend on joint studies of the disease and training of experts at universities in Japan, Vietnam, Thailand and China.
BEIJING (XFN-Asia) — The Asian Development Bank (ADB) said it has approved a $100 million loan for wastewater treatment and water quality improvement in the Hai river basin in central China’s province of Henan. The loan will fund construction of facilities to collect and treat wastewater and to deliver clean water to 15 cities around the highly polluted Hai river basin, the ADB said in a statement. The project will also promote institutional and financial reforms and enhanced management, the ADB added. The Hai river basin, one of the three most polluted river systems in China, has been severely affected by domestic and industrial wastewater, the ADB said. Environmental infrastructure has failed to keep up with the region’s rapidly growing economy, and only 34 percent of urban wastewater in the area is being treated, despite water shortages. The project will build sewers, pump stations and treatment centers to increase collection and treatment of urban wastewater to more than 70 percent, the ADB said. The total project cost is about $200 million, half of which will be met by the ADB loan. Local bank co-financing will provide $27.2 million and central and local government funds will be used for the remaining $72.8 million. The project should be finished by the end of 2010, the bank said.
Rice gets in way of FTA deal
KUALA LUMPUR, (AFP) — Thailand said it had refused to sign a trade agreement between South Korea and ASEAN, insisting that rice be included on the list of goods facing tariff cuts. The other nine Association of Southeast Asian Nations members signed the agreement covering trade in goods, a precursor to a full free trade agreement (FTA), while Thailand said negotiations over the issue would continue. "We deferred the signing. It may take place in the next three to six months," Thai Commerce Minister Somkid Jatusripitak told reporters. Under the deal, South Korea and ASEAN’s six more advanced countries — Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand — would start cutting tariffs from July 2006 when the agreement goes into force. The proposed accord specifies that South Korea and each ASEAN country may choose up to 40 items that could be excluded from tariff reductions for an unspecified period. South Korea wants to put rice on its protected list but Thailand, the world’s number one rice exporter, objected. Vietnam, the world’s number two exporter, also raised the issue with South Korea, but the problem was settled when Seoul granted some concessions on industrial goods.
PRULIFE moves to new address
PRULife U.K., which has seen its Philippine business grow dramatically in the past few months, will soon relocate its customer servicing and backroom facilities. This was announced by PRULife U.K. president Bobby Madrid, who said the move is necessary for its business processing units to cope with the increased volume of work. The unit’s new address is the SSHG Law Center on Paseo Roxas, Makati City. The building, partly owned by the Land Bank, was chosen for its amenities and accessibility to the public. The move, Madrid said, underscores yet again PRULife’s credo of "listening and understanding our customers’ needs." The relocation, facilitated by the Pronove & Associates, a real estate service provider, was finalized at a contract signing recently.
TOKYO (AP) — Nissan’s new car paint repairs its own scratches and scrapes. Minor scruffs disappear like magic in about a week if your car has Scratch Guard Coat, a newly developed clear paint that the Japanese automaker developed with Nippon Paint Co., company spokesman Kiyoshi Ariga said Monday. The coating, which Tokyobased Nissan Motor Co. says is the first of its kind in the world, contains elastic resin, similar to a rubbery surface, and can bounce back to repair itself of slight scratches caused by car-washing, off-road driving and fingernails. Car-washing machines account for most car surface scratches, according to Nissan, which showed before and after photos of a car with scratches on the hood and one with no scratches a week later. The coat lasts about three years, Nissan said. The scratch-proof paint job will be offered only in some Japan models of the X-Trail sport-utility vehicle, planned for sale soon, and overseas plans are still undecided, Ariga said. It may be offered in other models, but no decision has been made, he said. In terms of costs, Nissan would only say Scratch Guard Coat costs "a few tens of thousands of yen" (hundred dollars) extra.
ASB Holdings bares new project
ASB Holdings, Inc. is eyeing robust revenues from its newly launched project St. Francis Square, a bargain mall located in between Henry Sy’s SM Megamall and The Podium at the Ortigas Commercial Center. Edgardo Tenedero, Senior Vice President for Operations of St. Francis Square said the new commercial center is now leased by 950 tenants and will be at full capacity by next month. St. Francis Square has a total leasable space of 18,000 square meters and can accommodate up to 1,300 tenants. Depending on the performance of St. Francis Square, Tenedoro said ASB Realty may also consider putting up more bargain malls in the future. " We hope this(St. Francis Square) becomes a buy word in such a short time," Tenedoro said. The construction of St. Francis Square bargain mall has the prior approval of the Rehabilitation Receiver of ASB Holdings. ASB filed for rehab in the late 90’s due to financial troubles. Meantime in a recent development, ASB Holdings through its subsidiary ASB Realty Corp. entered into a joint venture agreement with Sta. Lucia Realty and Development Inc. for the development of a property in Sto. Tomas, Batangas. ASB Realty, together with Sto. Tomas Agri Farms Inc. (Stafi) and Novoland Development Corp., entered into an agreement with Sta. Lucia to develop a 55-hectare property in Batangas into residential and commercial subdivision. The joint venture has already been approved by the Securities and Exchange Commission. The approval, however, was subject to the condition that ASB Realty will use its earnings from the joint venture to pay its more than 700 unsecured creditors. ASB Realty expects to generate P100 million in earnings from the agreement, which will go to the asset pool of the ASB Group to settle its obligations.
Petron complies with BoI rules
Petron Corp. said it has complied with Board of Investment requirements that would entitle the company’s more than P9 billion worth of petrochemical projects to tax incentives and other perks. Earlier, the BoI approved Petron’s application as a new export producer of benzene, toluene and mixed xylene and as a new domestic producer of propylene. The approval was subject to certain terms and conditions, which Petron said it has already complied with. Incentives Petron would be entitled to include income tax holidays and lower duties on imported capital equipment, the company said in a statement. "Our entry into petrochemicals supports our strategy of investing in higher margin businesses which will increase our presence in the regional market," Petron president and chief executive officer Khalid Al-Faddagh said. "Our focus in the next five to 10 years is to develop our refinery assets to capture the unique opportunities presented by developments in the petrochemical industry. Petrochemical demand is projected to grow at an annual pace of 5 percent between 2005 to 2015, and command better regional and local prices than petroleum products, the company said. In the six months to June, Petron’s export sales contributed nearly a third of its P2.31 billion net profit, the bulk of which came from exports of mixed xylene.
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