Biz Progress BriefsPosted on March 17th, 2008 under Biz Progress
Stock market surges to multi-year highs
Philippine share prices are at their highest levels almost seven years.
Philippine Long Distance Telephone Co. (PLDT), International Container Terminal Services Inc. (ICTSI), and Security Bank jumped to their highest closes on record, sending the index to its highest peak since Aug. 27, 1999.
“A lower deficit than what the market has priced in is good for sentiment,” said
Eduardo Banaag, an equity fund manager at Manila-based First Metro Investment said a better than expected first quarter budget deficit is spurring the market.
The first-quarter deficit was probably lower than the government’s P72 billion estimate for the period, indicating a “stable” fiscal position and sending “a strong signal” that the budget will be balanced by 2008, Finance Undersecretary Gil Beltran said. Beltran said the government may post a surplus this month as individuals and companies pay taxes.
The government has raised taxes to help it trim the budget deficit this year to P125 billion, a seven-year low. It is also betting the additional taxes will help it trim P3.9 trillion of debt, swollen by eight years of budget deficits.
“The investment story continues to improve in the Philippines,” Chris Wood, regional strategist at CLSA,. “The Philippines is on the brink of a virtuous cycle with the peso having already appreciated and the sovereign bond spread having already declined.”
Vienna donates coaches
Vienna Lines, Austria’s state-owned rail operator is donating 48 second-hand light rail vehicles to the Philippines.
The department of transportation and communications said the delivery of the trains will starting in December, and delivered over a 12-month period.
The Vienna Line trains will increase the capacity of Metro Rail Transit 3, which runs on EDSA from North Ave. in Quezon City to Taft Avenue in Pasay City.
A transportation official said the additional cars would speed up the time gap between an arriving and a departing train, and with more trains, the system could hit the two-minute gap in waiting time.
The DOTC is a big help because it would spend $5,000 to refurbish each coach, compared to buying a new coach which will cost about $2 million.
San Miguel grows amid foreign beer sales
San Miguel Corp. continues to reap gains from its overseas investments.
Southeast Asia’s largest food and beverage company grew by 14 percent in the first two months of the year due to strong beer sales overseas.
Sales in northern China rose 37 percent, driven mainly by San Miguel’s “Blue Star” brand.
Operations in southern China also surpassed last year’s sales, as San Miguel’s Guangdong brewery rode on an effective ad and promo campaign that saw all its brands outperforming previous marks.
In Hong Kong, sales were up as well from last year. Australia’s sales were the same as last year, despite having to deal with heavy competitor discounting and a recent excise tax hike.
Despite a massive rise in oil prices last year, Indonesia’s sales fell over the two-month period by only 7 percent.Manila
Fame show attracts more SME’s
Some 500 small and medium enterprises manufacturing furniture, home furnishings, holiday décor and fashion accessories showcased their merchandise to overseas buyers at this year’s Manila FAME International trade show at the World Trade Center Manila.
“The show is meant to give our design-driven industries the strategic advantage and enhance their competitive advantage in the international marketplace,” Trade Assistant Secretary Fe Agoncillo Reyes said in a statement.
Manila FAME generates about $217.5 million in yearly sales from booked orders abroad, and there are expectations it would be exceeded this year.
The 2005 show, attended by about 7,000 local and foreign buyers, contributed 15 percent of total sales last year on design-driven exports equivalent to $831.42 million.
Organized by the Center for International Trade Expositions and Missions, Manila FAME International highlight new product designs from local designers every year.