‘Import-sensitive’ firms may face supply disruptions amid Russia-Ukraine conflict
Listed Philippine firms importing raw materials and other products may be affected by the global supply chain disruption caused by the ongoing conflict between Russia and Ukraine.
However, companies involved in banking, mining, and renewable energy sectors may see opportunities amid the crisis.
“[Companies] who are import-sensitive will take a hit for the short term, there will be a knee-jerk reaction,” First Grade Finance, Inc. Managing Director Astro C. del Castillo said in a phone call on Sunday.
This includes petroleum-related firms, while food manufacturing companies may also be affected “because of the global shocks in relation to the uncertainty.”
The ongoing surge in coronavirus disease 2019 (COVID-19) infections in the country is clouding the prospects for upcoming initial public offerings (IPO).
This as residential developer Haus Talk, Inc. and Figaro Coffee Group, Inc. are scheduled to make their Philippine stock market debut this month.
COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said the market has been factoring in the latest COVID-19 surge and the “more hawkish” stance of the US Federal Reserve, which may have contributed to the recent “lackluster volume” at the stock market.
“IPOs during this time may not get the multiplier effects they would have wanted as demand levels would clearly be impacted,” he said in a Viber message on Friday.
“This may drive some difficulty in listings during this period as volume levels remain stunted as we have two headwinds to deal with at the time being,” he added, referring to the COVID-19 surge and the looming interest rate hikes in the United States.
The US Fed is widely expected to raise interest rates in March, and start reducing its asset holdings. There are worries of a repeat of 2013’s so-called “taper tantrum,” which led to sharp capital outflows from emerging markets like the Philippines.
The Philippines is in the middle of another COVID-19 wave, with new daily cases hitting 28,707 on Sunday. Active cases reached 128,114 with a 44% infection rate.
PSE seeks to adjust LSI allocation in IPOs
The Philippine Stock Exchange (PSE) is considering adjusting the allocation of shares for local small investors (LSIs) in initial public offerings (IPO), as well as mandating LSI allotments in follow-on offerings (FOO).
In a consultation paper uploaded on the PSE website, the bourse operator said it is proposing to tweak the percentage of the allocation to LSIs in IPOs to not less than 5% but not more than 10% of the entire offer, depending on the size of the offering.
Hoteliers see signs of 'revenge travel'
Hospitality groups expect a rebound in tourism as coronavirus disease 2019 (COVID-19) vaccination rates continue to improve and travel curbs are further relaxed around the country.
However, new and more transmissible COVID-19 variants may threaten the tourism industry's recovery.
Hoteliers are hoping to see a sustained recovery in travel and tourism once the country opens up to foreign tourists. The Philippines is allowing fully vaccinated tourists from low-risk countries to enter the country starting Dec. 1.
However, the World Health Organization has classified the B.1.1.529 or Omicron coronavirus variant as a “variant of concern,” saying it might be more contagious than previous ones.
LNG as transition fuel offers opportunities, lowers costs
Companies are supporting the Energy department’s initiative of looking into liquefied natural gas (LNG) terminal projects as one of the opportunities to source power for the country.
The country’s Energy department estimated that the Malampaya gas-to-power project, the country’s sole provider of natural gas to power around 20% of the country’s needs and 40% of Luzon’s, will be depleted by 2027.
The department is now exploring other options for sourcing en- ergy, which include importing LNG. In a statement made in August, Energy Secretary Alfonso G. Cusi set a goal to transform the Philippines into a “leading LNG hub in Asia.”
Despite the coronavirus disease 2019 (COVID-19) pandemic, companies with LNG terminal projects said construction of their plants remains on track even with the stop-and-go lock- down restrictions in the country.
In navigating e-commerce, new online sellers need help too
With mall shopping now a distant memory for many, how has the process of enticing customers to buy your wares changed in the e-commerce age?
“You have to really be able to know how people are using the different digital channels and being relevant there,” Roshan Ramesh Nandwani, chief strategy officer of advertising agency BBDO Guerrero, told BusinessWorld.
And while literally billions of pesos are riding on understanding consumer behavior when much of their spending has shifted online, perhaps the least understood aspect of this equation is how small businesses that are new to online selling can hit the ground running under pressure from an unprecedented economic crisis.
Ponzi ghost seduces more Filipinos amid pandemic
The Ponzi scheme is among the three most widely used scams in the country after pyramid scams and boiler room operations, the SEC Enforcement and Investor Protection Department said.
Companies watching vaccine rollout
Philippine companies are watching the government’s vaccination drive against the coronavirus to guide their investment decisions for the rest of the year, analysts said.
“Foremost on their minds is how infection could be contained to manageable levels,” Aniceto K. Pangan, a trader at Diversified Securities, Inc. said in a mobile phone message last week.
Virus mutations, vaccine supply shortage and rollout delays, as well as public hesitancy to get vaccinated are all areas of concern.
REITs 101: Understanding real estate investment trusts
This podcast episode was recorded just as the boom of REIT listings at the Philippine Stock Exchange started in 2021.