00:58.4
We begin with a look at morning trade in Asia.
01:01.7
They are extending gains early Wednesday following the overnight rally in tech heavyweights in the United States.
01:07.9
Taking a look at the board now, Japan's Nikkei 225 up over 8%,
01:12.2
while South Korea's Kospi climbing nearly 2%.
01:16.5
Australian shares also edging higher.
01:19.1
This as investors await Canberra's first quarter inflation figures set to be released later today.
01:25.4
Economists polled by Reuters expect Australia's consumer price index to climb a little to 3.5%,
01:33.1
marking its fifth straight quarter of slowing inflation.
01:39.3
Over to the US, a strong batch of corporate earnings and a rally in tech heavyweights lifted the broader stock market Tuesday.
01:47.0
The S&P 500 gained 1.20%, while the tech-heavy Nasdaq added 1.5%.
01:53.9
The Dow also gained 1.5%.
01:55.4
The S&P 500 also climbed nearly 7 tenths of a percent.
01:58.3
Tuesday's moves came after an upbeat session on Wall Street.
02:02.2
Tesla kicked off the earnings cycle for tech heavyweights,
02:05.8
which reported a 9% drop in first quarter revenue, its biggest decline since 2012.
02:12.8
Investors are still awaiting earnings reports of other tech majors,
02:16.9
including Microsoft, Alphabet, and Meta platforms later this week.
02:21.6
Markets were also buoyed by upbeat earnings from companies
02:25.1
such as Apple and Apple.
02:25.3
Such as General Motors and Spotify,
02:27.9
which recorded better than expected quarterly results.
02:32.0
Elsewhere, treasury yields pulled back after US manufacturing data hit a four-month low.
02:39.3
We're now starting to see an expansion of the rally.
02:43.4
What we haven't seen and what investors are looking for is an expansion of earnings.
02:48.8
As it stands right now, for the first quarter of 2024, according to FactSet,
02:53.9
the tech-heavy Nasdaq will be the first to hit a 4.5% drop in first quarter of 2024.
02:54.2
As it stands right now, for the first quarter of 2024, according to FactSet,
02:54.2
the tech-heavy Nasdaq will be the first to hit a 4.5% drop in first quarter of 2024.
02:55.3
The technology sector is expected to grow earnings by 20% year-over-year,
03:00.1
including a lot of those Magnificent 7 technology names.
03:03.9
Communication services also has some names in the Magnificent 7,
03:07.9
is also expected to grow by 20% year-over-year.
03:11.3
However, the rest of the S&P 500 is only expected to grow by one-half of 1% year-over-year.
03:19.6
So that's what the investors are concerned about right now,
03:24.0
not only in terms of the S&P 500, but also in terms of the S&P 500.
03:25.3
Not only in terms of earnings growth, but also what the Fed is going to do or not do for the balance of this year.
03:32.8
Taking a look at U.S. futures, they're pointing to positive opens still due to the anticipated earnings reports.
03:41.4
Now here's a look at the local corporate headlines that we're watching out for this morning.
03:46.4
PXP Energy further narrows its losses in the first quarter.
03:50.1
Core net loss of the Manny Pangilinan-backed firm stood at 2.6 million pesos,
03:55.2
in the first three months of 2024.
03:58.3
This was lower year-on-year thanks to higher output sales from its Gallup Oil field
04:03.2
and from lowering recurring overhead and higher interest income.
04:08.1
Petroleum revenues up by nearly half to 26 million pesos,
04:12.7
with over 196 million barrels of crude oil sold in Q1.
04:18.3
Now to Price Corporation, the gas company's first quarter net income climbs to 713 million pesos.
04:25.2
This was higher by 40% year-on-year on the back of improved LPG margins,
04:31.1
particularly in the Luzon market.
04:33.6
Price Corp. said, though, that revenues were down at 4.7 billion pesos
04:38.5
following a drop in the average contract price and lower sales volume.
04:45.1
And finally, the Philippine Competition Commission opens an in-depth review
04:48.7
of the proposed acquisition of a northern Luzon drugstore chain
04:52.6
by Ayala Health's pharmaceutical arm.
04:55.2
Ayala Pharma Ventures, the operator of Generica drugstore,
05:00.3
is seeking a 49% stake in Joleco Resources' St. Joseph drug.
05:06.3
The antitrust body says Phase 2 of its review will assess
05:09.8
if the transaction could lead to lesser competition in relevant markets
05:14.2
in Ilocos and the Cordillera regions.
05:18.9
ANC's parent firm and AMBS Inc.
05:22.2
have made a deal to bring some of ABS-CBN's iconic shows,
05:25.2
as well as its evening newscast, TV Patrol,
05:28.4
to the free-to-air channel, All TV.
05:31.1
Jackie Pascual has details.
05:34.9
Advanced Media Broadcasting System, or AMBS,
05:38.4
and ABS-CBN have formally signed a partnership
05:41.2
that will bring iconic Filipino entertainment programs
05:44.5
to more audiences via the free-to-air channel, All TV.
05:49.4
Nostalgic kapamilya shows under Jeepney TV
05:52.4
will now be aired on All TV.
05:55.2
Included in the partnership is the airing of TV Patrol,
05:58.6
the flagship news program of ABS-CBN on All TV.
06:02.8
Very proud and honored to be celebrating today
06:07.8
the start of what we hope is going to be a long, fruitful,
06:13.9
and good partnership between AMBS and All TV,
06:19.4
as well as ABS-CBN.
06:20.9
We are very excited to bring the ABS-CBN brand of storytelling,
06:25.2
to the audiences of All TV.
06:26.9
It's a bit of a sentimental note for us today
06:28.9
because we're bringing one of our longest-running programs,
06:31.5
TV Patrol, back to Channel 2.
06:34.4
I know there are some who feel that,
06:38.2
who feel some pain over our return to our former channel,
06:42.4
a home that was once ours.
06:44.7
But in all humility, let's try and put all of the past behind us
06:48.9
and embrace instead our mission to serve the Filipino,
06:52.0
wherever they may be.
06:53.3
ABS-CBN President and CEO,
07:01.0
Maribeth Torrentino,
07:05.6
Also present were ABS-CBN Chairman,
07:08.6
and Chief Partnership Officer,
07:11.4
The Villar Group, meanwhile,
07:12.7
was represented by Chairman,
07:17.0
Vista Land and Livescapes, Inc.
07:18.9
President and CEO,
07:21.2
and All Value Holdings Corp President and CEO,
07:25.8
AMBS and ABS-CBN hope the partnership
07:28.5
will bring more enjoyable,
07:31.8
and informative content to Filipinos.
07:34.1
We're very excited to welcome TV Patrol,
07:38.3
which, as you know,
07:39.0
is the longest-running news show in the Philippines.
07:43.9
We're very honored to have them in all TV,
07:47.0
as well as the rest of the content.
07:48.9
There's been a persistent clamor for Patrol's credible news and information
07:52.3
to reach the audience at one side.
07:53.8
I hope that by working together with All TV,
07:57.5
we are once again able to deliver this service
07:59.5
to all our Kababayans.
08:01.5
All TV is available on free TV, cable, and satellite TV nationwide.
08:07.2
Jackie Pascual, ABS-CBN News.
08:11.6
The Bank of the Philippine Islands,
08:13.6
the country's oldest bank,
08:15.0
underscoring the impact of artificial intelligence
08:17.5
on the banking sector.
08:19.2
With an annual investment of at least 14 billion pesos
08:23.1
The bank announces the upcoming launch of an AI tool which aims to support employees in addressing client concerns in their preferred language.
08:53.1
And the answer is consistent. Because obviously, you know, the bank, we've got thousands of products, we have so many processes, so many policies. What we've done is we've ingested all that into a platform developed by OpenAI and it's our own little generative AI tool that anyone can ask from the branch in Cebuano, in Ilongo, they can ask in their native tongue.
09:23.1
Now this piece of breaking news, the erstwhile Philippine statesman Rene Sagisag has died. The prominent human rights lawyer was among the leading opposition figures during the Martial Law era and was among those imprisoned at the start of the military regime.
09:39.8
Mr. Sagisag served as presidential spokesman post-EDSA People Power I under the Corazon Aquino administration. He was also a senator from 1987 to 1992.
09:51.7
A statement from...
09:53.1
A statement from his family this morning reads, as we mourn his loss, we take solace in the enduring impact of his legacy.
10:01.1
Sagisag's family also remembered him as a dedicated public servant and a tireless human rights advocate who fought for justice, truth, and democracy.
10:10.5
Now we will be bringing you more details later on the show and in our succeeding newscasts.
10:23.1
Now according to market intelligence firm International Data Corporation or IDC, the personal computer market in the Philippines fell 24% year on year due to the sharp decline in government purchases.
10:37.7
Now that COVID-19 restrictions have been lifted and workers are returning to their offices, can we see a resurgence in global and Philippine PC sales next year? Or this year in fact?
10:48.5
Joining us now is Ro Ben Dispo, an associate research analyst at IDC.
10:53.1
Hi Ro Ben, welcome to the show, the program.
10:57.1
Hello Stanley, good morning. Glad to be here today.
10:59.6
Okay, it's great to have you here to talk about PC sales.
11:02.7
Now quick stats first, we saw the PC market fall 24.2% in fact year on year in 2023.
11:11.4
Now Ro Ben, there could be many factors behind that decline, but what were the prevailing conditions last year that brought about that kind of sales slump?
11:23.1
Okay, if we do check the PC market on a global scale, there's been a decline year on year.
11:29.1
Now due to the significant increase in PC purchases driven by the COVID-19 pandemic, market falls on demand together with the macroeconomic uncertainties.
11:38.9
So for the Philippines, we're hitting right now at a substantial decline of 24.2%.
11:44.2
This has then led to the early year saturation in the inventory reeling from the low demand of the market.
11:53.1
Consequently, vendors shifted their focus towards effectively managing their existing inventory.
11:59.4
Now both for private enterprises and government entities alike then experienced a decline in purchasing activity influenced by the prevailing pessimism within the financial market landscape and the procurement challenges in the market.
12:13.0
All right, you're talking about private and government.
12:15.4
Let's tackle government first.
12:17.0
What could be the reasons behind the slump in terms of purchases of new government equipment?
12:23.1
Which includes PCs in a lot of public offices, what were the reasons there?
12:29.6
For the procurement challenges, we could navigate through different factors.
12:33.6
It could be, it's just a general case of navigating through procurement involving grappling the budget constraints, ensuring supplier qualifications, and meeting technical requirements such as the certifications, requirements for the laptops.
12:47.0
And these challenges demand strategic planning and careful consideration.
12:52.9
These are the things that we need to overcome effectively soon rather than it just happened by the second half of the year.
12:57.8
Yeah, Robin, the reason for that question is a lot of people, a lot of us would assume that, you know, a lot of government offices are going digital, they should be purchasing more.
13:08.4
Yes, that is true.
13:09.9
By the second half of the year, they did achieve that.
13:12.9
By around the first half, they had a lack of purchases.
13:17.7
By the second half, they increased the purchases by then.
13:21.3
Let's talk about private consumer.
13:22.9
Private consumer purchases now, we also think that, you know, PC sales could be coming from a higher base because from 2020 until 2022, we saw an uptick, of course, in demand for personal computers and similar gadgets at the height of the pandemic when people worked and studied at home.
13:41.9
Could that have attributed as well to the decline?
13:45.4
Yes, it did attribute.
13:47.4
Now, following the lifting of the COVID restrictions, there was a prevailing expectation that...
13:52.4
By the return to office setup, we might expect that enterprises like BPOs would try to stimulate the demand for desktop computers.
13:59.7
However, this was the contrary of these expectations.
14:03.1
So, due to that, significant deals such as the refresh cycles occurred during the pandemic.
14:09.4
As a result, there was a reduced demand at the end of the pandemic.
14:14.6
The substantial portion of industries has shifted their presence towards remote work setups also, which affected the...
14:22.4
...demand for those desktop setups known for the traditional offices.
14:28.4
Other than that, the PC sales, the topic of the macroeconomy wasn't doing so well, leading to the companies just saving for the moment.
14:39.9
So, a lot of companies have really put off on more capital spending.
14:43.9
What about personal consumers or consumers of personal computers, families, individuals?
14:50.4
Is there anything unique in the way that...
14:52.2
...the trends are going and what your research is showing you about personal purchases?
14:58.2
So, for consumers, we've already...
15:02.2
It's just the fact that during the pandemic, that consumers already bought computers.
15:08.7
The students, the...
15:10.7
So, we assume that they already have and there are no immediate purchases in the next couple of years, I suppose, until those PCs stop working.
15:18.7
Now, when you talk about brands now, what remain the...
15:22.2
...passive brands across all price points, Robin?
15:25.2
And are they reporting the same decline pattern in sales or do you see that more preferred brands still enjoy a considerable edge versus competition?
15:36.2
We do check all the brands' activities by year on year.
15:41.2
All the brands did follow all the trends.
15:43.2
They did drop year on year.
15:46.2
So, it does not matter which brand as long as, you know, all personal computer sales in general.
15:52.2
Yes, that's right.
15:53.2
They have declined for the year.
15:55.2
Now, how is market picking up emerging PC brands?
15:58.2
Because we know that in the case of cell phones, for instance, there are a lot of emerging brands cheaper or, I mean, more affordable.
16:06.2
They even have better features.
16:08.2
So, is this the same with personal computers?
16:11.2
Are consumers now opening up to the lesser-known, newer, cheaper brands?
16:17.2
Now, if we're looking for the brand activity right now,
16:21.2
for the past years, the top five brands have still been gaping the market right now.
16:28.2
So, it's mostly just those top five brands.
16:31.2
But what's new to the market right now is that the innovation of AI into PCs.
16:37.2
It could be the greatest innovator for PCs right now.
16:40.2
And when you talk about innovation for AI, how is that affecting the price points at least for these brands that have these additional features?
16:50.2
the brands don't have the features but they are planning to release by late of 2024 or early of 2025.
16:57.2
We do expect the increase of price points because of those components.
17:03.2
Now, Robin, the slowdown, of course, in sales of personal computers may also be attributed to inflation.
17:09.2
You mentioned that a while ago.
17:11.2
You know, these are difficult times and, you know, consumers have to tighten their budgets, limit spending to essentials.
17:18.2
How are PC brands in this regard?
17:19.2
How are PC brands and distributors reacting to this?
17:22.2
I mean, what are they doing to still encourage purchases in spite of hard times?
17:29.2
So, for 2023, most of the brands reacted by just lowering their price points during 2023, trying to stimulate the demand for PCs.
17:42.2
So, it's really promos and price cuts.
17:45.2
Now, is this the same situation now for private or government?
17:48.2
Private or government institutional purchases?
17:51.2
Are the numbers also improving as well for 2024?
17:54.2
What are you seeing now?
17:57.2
For 2024, there's a chance that there will be a gradual increase in the replacement, the usual replacement cycle.
18:09.2
During the pandemic, that would be, the purchases would become three to four years old.
18:14.2
That's already approaching the replacement cycle.
18:18.2
But another thing for that is that the hype around AI encouraging the companies to repurchase their, repurchase laptops.
18:30.2
I don't know if the scope of that study only, was only limited to brand new units because it can also be possible that consumers, because of hard times, have just shifted to buying the secondhand market to meet their personal computing needs.
18:46.2
Now, is there any part of your study?
18:47.2
Any part of your study that point to that possibility as well?
18:56.2
Right now, I don't have that necessary information to answer that question accurately at the end moment.
19:03.2
Moving forward now, what are the projections for this year?
19:06.2
Do you see PC sales to pick up in 2024?
19:12.2
So, for 2024, we do expect a huge rebound.
19:16.2
Huge rebound for this year with a 26.5% compared to 2023.
19:22.2
Now, the main driver would be because of the recent DepEd computerization program deals.
19:30.2
On that note, Robin Dispo, Associate Research Analyst at IDC, thank you so much for sharing those research insights on the program today.
19:38.2
Talk to you again sometime soon.
19:41.2
Thank you so much, Stanley.
19:43.2
Moving on to more news.
19:44.2
President Ferdinand Marcos Jr. vows more cold storage support for onion farmers in Mimaropa region.
19:50.2
He spoke Tuesday at a town hall meeting with farmers and fisherfolk in Occidental Mindoro Province.
19:56.2
There, Marcos bared plans to set up solar-powered cold storage and other post-harvest facilities.
20:02.2
The President says this would help stabilize the prices of onion and boost farmers' income.
20:09.2
If we have cold storage, we don't need to buy it immediately.
20:13.2
Whatever is needed, whatever is the demand, even for the consumer, the price is fairly even, even during the day, during the rainy season.
20:27.2
Now, selling commodities, Marcos sought the assurance, sought to assure the public, the country's rice supply remains sufficient amid the El Niño phenomenon.
20:39.2
If what we are talking about is rice, our supply is just right.
20:42.2
Our supply is just right.
20:43.2
People don't need to worry.
20:44.2
The areas, in fact, the areas that have water, our rice has increased, our tons per hectare.
20:57.2
But, of course, there are many more, like here.
21:00.2
Maybe only about 50 percent are irrigated, so others are really having a hard time.
21:10.2
Philippine House Speaker Martin Romualdez vows to review laws affecting agriculture.
21:19.2
This as government seeks to stabilize prices of key commodities.
21:23.2
House leaders earlier met with agriculture groups and supermarket associations which raised concerns on high fuel prices and the country's reliance on importation.
21:32.2
Romualdez assures the groups their concern will reach the President.
21:37.2
We want to look at the body of laws first, no?
21:40.2
Kasi may sinabi niya na hindi dapat knee-jerk lang for the next six years lang.
21:48.2
I think we'll do a comprehensive review.
21:50.2
A holistic approach dito.
21:52.2
Hindi lang isang batas.
21:53.2
Titingnan natin lahat.
21:55.2
We'll work together kung ano yung mga batas that is working or needs to be amended or even repealed.
22:04.2
If anything has to be introduced as a new law.
22:06.2
To be more updated.
22:15.2
The Marcos administration ramping up efforts to secure more climate financing.
22:19.2
The finance department says President Marcos has formed an inter-agency technical working group to lead the Philippines in its bid to host the Loss and Damage Fund Board.
22:29.2
The fund aims to provide financial assistance to vulnerable countries dealing with the devastating effects of climate change.
22:36.2
By hosting the board, the Philippines will gain significant traction from developed countries that can pledge contributions to finance the fund.
22:45.2
The country recently secured a seat on the fund's board during the COP28 summit in Dubai.
22:53.2
The Philippine Transportation Department aiming for net zero emissions for the aviation industry by 2050.
23:00.2
Transportation Chief Jaime Bautista says his agency is in talks with industry stakeholders and aviation experts.
23:04.2
Transportation Chief Jaime Bautista says his agency is in talks with industry stakeholders and aviation experts.
23:05.2
Transportation Chief Jaime Bautista says his agency is in talks with industry stakeholders and aviation stepsire to develop goals that will help absorb carbon from the atmosphere across the islands.
23:13.2
Transportation Chief Jaime Bautista says his agency is in talks with industry supporters and aviation experts.
23:17.2
Transportation Chief Jaime Bautista says his agency is in talks with industry supporters and aviation stepsire to develop goals that will help absorb carbon from the atmosphere across the oceans.
23:25.2
Transportation Chief Jaime Bautista says his agency is in talks with industry supporters and aviation stepsire to develop goals that will help absorb carbon from the ocean.
23:29.2
Transportation Chief Jaime Bautista says his agency is in talks with industry supporters and aviation stepsire to develop goals that will help absorb carbon from the ocean.
23:31.2
Transportation Chief Jaime Bautista says his agency is in talks with industry supporters and aviation stepsire to develop goals that will help absorb carbon from the ocean.
23:32.2
happening within the hour, several government
23:34.3
agencies will discuss solutions to the
23:36.3
country's perennial traffic and
23:40.0
At 11 a.m., the Senate will conduct
23:42.3
a consultative meeting tackling
23:44.4
threats to press freedom.
23:47.2
And at 1 in the afternoon,
23:48.5
various environmental groups will hold a
23:50.5
protest action calling for accountability
23:52.5
from Environment Chief Tony
23:58.2
Time for a quick break. When we return,
24:00.3
we bring you your midweek trading
24:02.5
guidance from Paul Joseph Garcia of
24:04.2
Grow Capital Partners Incorporated. Stay with ANC.
24:26.3
Welcome back. You're watching Market Edge.
24:28.1
The headlines, a U.S. government report
24:30.3
Yes, extra judicial killings
24:32.1
remain a serious problem in the
24:36.2
Malacanang warns the public against
24:38.0
a manipulated audio of the president
24:40.0
supposedly instructing the military to
24:42.1
act against a foreign country.
24:46.2
more Chinese vessels spotted in the
24:48.1
West Philippine Sea as Manila holds
24:50.1
joint military exercises with
24:55.0
Philippine shares
24:56.0
joining its peers in the green with a
24:58.0
main index climbing back above the
25:00.0
6500 level on Tuesday.
25:02.0
Can it sustain the momentum?
25:04.0
Joining us now for more
25:06.0
on markets is Grow Capital Partners
25:08.1
Paul Joseph Garcia.
25:10.2
Mr. Garcia, welcome to Market Edge
25:15.3
The question really at hand is
25:18.1
if the PSE in fact
25:20.2
can sustain or establish at least
25:22.3
a strong base at the
25:24.1
6500 level as failing to do
25:26.1
so can bring the market back to
25:27.7
2023 lows. Now, what
25:30.0
conditions do you think are
25:31.8
necessary if we are really to sustain
25:37.6
Very good question.
25:39.4
I wish I could have a very straightforward answer
25:41.6
to that question. Unfortunately, we're seeing
25:43.8
the same movie as last year.
25:45.5
We had a very good start
25:47.0
in the first quarter, first three months
25:55.7
the 7000 index level
25:57.1
last month. Unfortunately,
25:60.0
with the recent developments over the past
26:05.8
concerns, macro concerns
26:07.4
particularly on the inflation front
26:09.6
and the Fed looking
26:17.1
shall we say easing
26:19.6
mode but again a more
26:22.8
in terms of anchoring
26:25.5
inflation expectations and the BSPs
26:29.6
suit. And we've seen also
26:33.0
in terms of sustainability moving forward
26:35.6
I think what we can expect
26:37.8
is that earnings should be the
26:40.6
bedrock for investors
26:43.3
to hang their hat
26:45.8
on. If earnings will not
26:51.5
2024, then I don't see
26:57.0
breaching the 7000 index again.
26:59.6
Soon, anytime soon, but in fact as we're now in a downtrend, we might see a further retracement of what we've seen over the past couple of weeks. So I think investors should be on a defensive mode. The market overall is de-risking, risk off, and therefore taking some money off the table, raising cash. So that's the situation now, unfortunately.
27:24.6
All right, you brought up geopolitical tensions, which was a concern just a few days ago.
27:29.6
But after, you know, there was a
27:31.7
bit of easing of those tensions between
27:33.7
Iran and Israel. Do you think
27:35.3
the market has put that out of the way now, at least
27:37.7
the geopolitical tension?
27:41.4
At least for the moment,
27:43.7
yes, I would say.
27:49.6
Black Swan events, unfortunately,
27:51.7
may still linger on in the
27:57.5
like what I'm saying,
28:04.3
and anything can happen.
28:08.3
just see continued maybe
28:10.1
volatility in markets,
28:12.1
in asset prices, until we see
28:22.0
regulators like the
28:24.2
Fed, for example, that inflation
28:30.5
down trend. And unfortunately,
28:33.1
my economy is also in inflation.
28:34.5
It's really sticky on the way down.
28:37.4
It's very sticky.
28:38.4
And base effects have been waning, actually.
28:41.7
We're now entering the
28:43.9
full-blown effects of the El Nino
28:46.0
weather phenomena.
28:51.1
the heat, we're seeing that
28:53.6
energy prices in the Western market, for example,
28:59.5
have to see that in the
29:00.8
unfortunately, in the electric
29:05.0
from Meralco over the
29:07.4
next couple of months, which will reflect
29:09.0
possibly a higher energy rate.
29:11.8
So, all these things right now
29:13.3
we're seeing, and of course, the effect
29:15.3
on commodity prices and local goods,
29:17.5
particularly on rice.
29:19.2
By the way, we're still the largest
29:21.1
importer of rice, and we've seen also
29:23.3
an uptick in prices. Although,
29:25.0
it's a stabilizing thing.
29:29.5
another spike in rice prices
29:32.2
due to the supply situation
29:34.5
globally, not only locally
29:35.9
as a result of this El Nino
29:38.1
weather phenomenon.
29:39.0
All right. Really, too many moving parts there.
29:42.5
Let's talk about the markets now.
29:44.1
Individual prices. The recent steep
29:46.1
dive, of course, from the highs nearing
29:47.6
7,000 to the lows of 6,400
29:49.9
was a purging of sorts
29:52.4
revealing the stronger companies
29:54.2
were able to cling on, still
29:56.1
close to the recent highs.
29:57.9
While the rest really suffered very deep cuts.
30:00.2
Now, do current values more or less reflect
30:03.2
the real value now of our stocks?
30:05.3
Or are you expecting a further shakedown
30:08.4
for those that are really considered
30:13.3
For the overall market, I don't,
30:14.7
I don't, what do you call this?
30:16.9
At the current levels at 6,500,
30:19.9
the market P is around close to 11 times
30:22.7
this year's earnings.
30:25.3
I don't see that demanding or very, you know,
30:27.8
expensive relatively compared to previous years.
30:31.0
In fact, I would say that's about one ST lower
30:34.5
than our average P multiple over the last five years
30:38.3
and maybe even more over the past 10 years.
30:41.5
However, saying that is that a lot of the stocks
30:46.5
have retraced from the recent highs.
30:50.9
And fortunately, there are more stocks that are, of course,
30:57.8
underperforming more than the index
31:00.7
and some are more resilient.
31:02.6
I like particularly the banking sector,
31:05.0
the banks for example, BPI just came up with their earnings
31:09.4
I used to work with BPI before and
31:12.6
I didn't know the difference of BPI.
31:14.7
So I just want to make that full disclosure.
31:17.8
But banks, I think in general,
31:20.9
will continue to do well in this environment,
31:25.0
will continue to do well in this environment,
31:26.8
will continue to do well in this environment,
31:27.8
rates are still elevated their names or net interest margins will continue to be um expanding
31:34.8
uh relative to previous years when we had low interest rate environment and we're seeing also
31:40.7
loan growth tracking uh surprisingly uh growing in a high interest rate environment so that may be a
31:47.1
good sign for for the macro economy in general means corporates are looking to expand and and
31:54.8
uh perhaps uh invest in capex additional capex to to take advantage of market opportunity so
32:06.7
you don't see uh you know corporates uh taming and down their growth targets for the year
32:11.8
considering that you know uh
32:13.5
we you said so yourself
32:14.8
the timelines for interest rate cuts have moved uh this might cause uh a lot of companies
32:21.8
particularly property for instance
32:23.7
very sensitive to interest writing
32:24.8
you might not need a current market license for only one business in the future, and for companies you might need a lot of resources
32:24.8
Definitely. When interest rates are higher and investors are demanding a higher risk premium to invest in the markets,
32:38.7
that's a result of a discounting or pricing in of expectations of investors that companies would have to revise downwards their earnings projections for the rest of the year.
32:50.0
As you said, as we see the BSP moving or postponing their moves to lower interest rates possibly if not for the end of the year, early next year.
33:02.3
My view is that most likely we won't even have a rate cut this year and moving towards that direction already.
33:08.5
So if that's the case, that would mean a lot of the forecasts that we're seeing from analysts or from the corporates themselves would have to be reassessed.
33:20.0
And perhaps revised downwards. And that for me would be, again, not good for the markets.
33:27.0
But if they're able, if corporates are able to be resilient and show better than expected numbers, whether in the top line or bottom line, keeping their margins stable, that should bode well.
33:40.8
But again, as investors, I think they would have to be more bottom up, meaning they have to look at...
33:50.0
each company more closely with regards to how they're able to navigate this macroeconomic environment.
33:57.6
It's very tricky. There are a lot of moving parts, as you said, headwinds from the geopolitics and everything.
34:04.8
The peso, by the way, is now closer to 58 than 54.
34:08.1
Right, right. I was wondering about that too.
34:11.2
This continuing weakness of currency, how's that panning out?
34:16.4
That's not good for some corporates, especially for those who are...
34:20.0
importing a lot of raw materials and capital expenditures, of course, that needs to be imported.
34:30.1
This would definitely have an impact on local inflation.
34:34.4
So we are importing inflation as a result of a weaker peso.
34:42.0
My view also was still at that time closer to 55 most of the year.
34:47.5
But now we have to adjust that.
34:50.0
So weaker stance, we have to see a stronger peso, sorry, most likely a stronger dollar for the rest of the year.
34:57.6
Unless there will be a commercial of sorts in the global economy or interest rates from the Fed, which unfortunately is not the case.
35:09.1
So I would advise investors to be very closely monitoring the peso.
35:15.9
And for importers, of course, as you well know, we're not yet in the import season.
35:19.8
We will have to make some foreign exchange hedging and, you know, in anticipation of a weaker peso.
35:30.2
Mr. Garcia, let's just bring in the opening numbers now.
35:33.8
We're eight minutes into trade and we're now at 65.59.
35:37.3
That's eight-tenths of 8% up from the opening of 65.06.
35:43.0
Now, part of this month's milestone as well for the Fund Managers Association of the Philippines, which you are part of.
35:49.0
Now, what changed in FMAP's 27 years of existence in terms of, you know, professionalizing the investment management ecosystem?
36:00.5
Well, thank you for that.
36:02.5
Yes, we are celebrating our anniversary actually yesterday, this week.
36:06.5
And it's been an honor to be part of this organization.
36:14.4
And that's just, we are, our objective is to professionalize.
36:19.0
The investment management industry.
36:21.3
And we've been doing that by, for example, during my time, we started our first out-of-town convention conference in Boracay with the late BSP, then BSP Deputy Governor, Nesting Espinilla.
36:39.7
We were only about, I think about 60 then, but recently we had one also.
36:47.6
In Samal Island and the new Discovery Resort.
36:54.1
We were over 130, I think, at the time, 120.
36:59.1
We had the CEO of the Mahalika Fund, Joel Gonsing, to grace the occasion and be our research speaker.
37:08.1
So, we're doing a lot of these professional development seminars and conferences tied up with CFA Society to also come up with seminars.
37:15.9
So, that's our...
37:17.6
And webinars, of course, that are timely and I guess I would say that would help increase the skills of our local fund managers.
37:29.7
And we're seeing more and more younger investment professionals coming in and we're happy to see that the average age of fund managers now is coming down, which is a good sign.
37:43.0
Now, speaking of those ages coming down, FMAP is, of course.
37:47.6
Continuously growing, getting new members, you know, joining the free and the organization.
37:53.1
What is your advice now to young fund managers joining this ecosystem, this industry?
38:00.1
It's a very interesting time to be a fund manager, investment professional at this time.
38:05.6
I suggest those who are thinking of, you know, going to the fund management industry to be a fund manager and investment analyst and associate.
38:17.0
I mean, now is a good time to come in.
38:19.3
Very interesting time, especially with what we're seeing right now in the global macro fund and also locally.
38:27.0
And this will definitely test the skill set of investors.
38:33.4
And I also suggest, of course, to take a lot of, you know, all of these, take advantage of the professional development seminars that we're offering.
38:43.6
And, of course, if they have the time and the resources to take, let's say...
38:47.0
The CFA, for example, that will help them become better investment professionals and investors in general.
38:56.4
Now is an interesting time.
38:58.3
We're going through this fog right now in the markets.
39:01.1
And, therefore, you separate the men from the boys.
39:04.8
Hopefully, we'll have more men, you know, going into the market and, therefore, not really displaying the market in terms of, you know, short-term funds and the like.
39:17.0
Right now is, of course, real honest-to-goodness, you know, serious investors if we look at the markets from a medium-to-long-term perspective.
39:24.7
Yes, especially now that, you know, more Filipinos are getting into investments, now opening up to, you know, putting some money, growing their resources and their wealth.
39:34.2
We need more professional investment managers to run to, again, grow capital partners, principal and managing partner, Paul Joseph Garcia.
39:43.3
It was a pleasure talking to you.
39:44.7
And congratulations to FMAP for this month.
39:51.4
Thank you for having me.
39:53.0
All right. Have a good day as well.
39:54.9
As we reported, trading at the Philippine Stock Exchange officially kicked off this Wednesday.
40:00.0
Today's opening number is 6541 with the PSE's main index up by half of a percent.
40:06.8
Value so far is at 66 million pesos, though that can change, with advancers and decliners at 37 to 20.
40:17.0
We're taking a quick break again.
40:21.1
Coming up, President Marcos wants to create 1 million digital jobs by 2028.
40:25.9
We'll talk about this with the Employers' Confederation of the Philippines next.
40:29.9
Market Edge. We'll be right back.
40:49.8
The Marcos administration embarking on a mission to create 1 million digital jobs by 2028.
40:56.6
President Marcos says this could bring in 24 billion pesos to fund public services and infrastructure projects in the country.
41:04.0
Can this plan materialize or will it remain a dream?
41:07.3
Talk to us about this.
41:08.3
We now have with us Serio Ortiz-Luis Jr., the President of the Employers' Confederation of the Philippines.
41:17.0
Welcome back to Market Edge.
41:19.0
Hi. Good morning to you and to all the ones who are watching us.
41:24.7
All right. It's a pleasure having you on the program.
41:28.3
Now, President Marcos announcing a new mission, which is to create 1 million digital jobs by 2028.
41:35.2
Now, what kinds of jobs do you envision out this mandate?
41:39.1
Or what do you think would come out of this mandate?
41:43.2
You know, the impact of the digitization.
41:47.0
It's very noticeable already, especially in the e-commerce, no?
41:52.3
You have noticed that during the pandemic season, there have been deliveries and everything, and a lot of jobs have been created.
42:04.4
But I think the President is really making a statement regarding the state of our connectivity and the state of the internet system.
42:17.0
Because unless we expand it, and unless we improve it, I don't think we can compete with our neighbors in this area.
42:24.0
But there's a, we have a bunch of talents of people that can enter this.
42:32.0
And, you know, there is a wide range of software developers that can be employed.
42:44.0
There can be companies that can enter.
42:46.6
These two prepare platforms, prepare infrastructure.
42:52.0
And even the government alone, spending towards reaching out to the unserviced part of the country.
43:01.2
And also the, to target the underserved population, like the low-income individuals, the seniors, the people with disabilities.
43:15.0
These, this, this.
43:16.6
They can be employed, eventually, if we are able to expand our services, and especially to the rural area.
43:26.7
And, but most, first and foremost, I think the President, I understand he even instructed the cabling to, you know, to use the cables.
43:36.7
And, and I think they are going to improve the regulatory environment for, yeah.
43:46.6
It's also the investors.
43:47.6
Because, unless investors are encouraged to come in, the jobs you try to create will be there.
43:54.6
Sergio, we know that, you know, most of these jobs would either come from the government or the private sector.
44:00.6
Your group, the one you're representing.
44:03.6
Now, is the private sector ready now to respond to this call, help generate these jobs?
44:08.6
What opinions have been expressed so far by employees on this, based on your, you know, conversations with them?
44:16.6
Well, we're very supportive and we welcome the President's pronouncement because he has to really take a direct hand and all the agencies of the government must do that.
44:29.5
But on the side of the private sector, PISAC encouraged us to do great jobs also.
44:40.5
You know, if you will remember, Sandy, in 2021, during the pandemic was going down already, ECO with the Philippine Chamber of Commerce and PhilExport and other agencies,
44:58.0
other like the manufacturing associations, the construction association, together with DOLE, DTI,
45:09.0
we embarked with a creation of...
45:12.0
And we succeeded in that, although a little delayed.
45:15.0
We didn't get that in 2021, but we were able to meet the...
45:20.8
Now, in 2020, last year, through the effort of the Philippine Advisory Council, the PISAC,
45:30.8
we were encouraged to embark again on creation of 1 million jobs.
45:35.8
This is basically led by Tessie Coulson of SM.
45:40.5
And he encouraged us.
45:41.5
And now, so we are now doing all these things.
45:47.0
We'll develop platforms.
45:49.0
We'll develop fairs, trade, and fortunately she offered the facilities of all the SM for us to be able to conduct these things.
46:00.5
And so, I think in the labor day, we have a lot of activities in many of the SM halls to do this.
46:10.5
All right, sir. You know, there is no roadmap yet for this initiative which has a timeline of just three to four years from now.
46:20.3
So maybe if you can envision it for us how this should be executed, what important components do you think are non-negotiable when it comes to the roadmap to providing or creating a million digital jobs, one of which could be education?
46:37.2
Well, number one is, first and foremost, we have to improve our connectivity. Second, our internet status is way behind. And then we can put up the training on the platform for this and we can move forward based on this.
47:02.5
All right. On another matter, you know...
47:07.2
You know, just weeks ago or a month ago, during the first quarter of the year, everyone was talking about wage hikes, even some legislators proposing to mandate a specific amount, whatever happened to that now.
47:22.2
Well, you know, we were saying before that this will be inflationary and all the economic managers are saying that.
47:32.4
None of the economic managers of the present administration has agreed.
47:37.2
None of the economic managers have agreed to that. And I don't think even any economic manager would be saying that.
47:43.9
What people do not realize is that mandated wages only affect the formal sector in the private sector, and that is those who have employers.
47:56.2
And this is only 10 to 15 percent of the 52 million in the labor market.
48:04.7
The 86 to 90 percent.
48:07.2
I have no employers.
48:10.4
Well, some of them are employees of the government, but they have no employers.
48:17.2
These are the farmers, the fisher folks, market vendors, all sorts of...
48:25.5
And this is the majority.
48:27.2
And that is why we are saying we keep on talking to improve the 10 percent minimum wage earners.
48:37.2
As against the 90 percent.
48:39.9
And this is inflationary.
48:42.8
And a good thing, but even some farmers are saying, okay, you improve the 10 percent after a few months, inflation cuts off on them.
48:53.8
And they will be in the same situation as the farmers who did not receive any.
49:04.6
As a matter of fact...
49:07.2
The wage board has already come out with increases, anything from 30 to 60 pesos, depending on the regions.
49:18.7
And now, again, day by day, as usual, as a matter of practice, they will be fighting again on the private sector.
49:30.8
So, let's wait for them.
49:32.3
They are the ones who are qualified to do this.
49:35.3
Right, on that note.
49:37.2
Employers Confederation of the Philippines present, Sergio Ortiz-Luis Jr., we thank you so much for joining the show today.
49:43.9
Have a great day.
49:46.3
Thank you, thank you, Sandy.
49:47.8
And thank you also to those who are watching us today.
49:51.8
All right, and before we go, if you're dreaming of visiting Venice and sailing along its canals, get ready to pay for entrance.
50:00.3
Venice will begin charging day trippers for entry, a world first, aimed at easing the tourism pressure on it.
50:07.2
It's the Italian city.
50:08.4
Starting Tuesday, a public holiday in Italy, day visitors will have to buy a 5-euro ticket.
50:14.5
Inspectors will carry out spot checks at key points in the UNESCO World Heritage Site, with violators facing a fine of up to 300 euros.
50:24.6
For researchers, Venice is the embodiment of overtourism, with visitors easily outnumbering the resident population of 50,000.
50:35.5
And that's it for the show.
50:37.2
Stanley Palisada, thank you so much for watching.
50:39.3
You can listen to our interviews again on the ANC Market Edge podcast, available on Spotify.
50:45.2
You can also watch highlights, recaps, and exclusive content of our shows online.
50:49.7
Subscribe to the ANC YouTube channel, like us on Facebook, and follow us on Twitter.
50:54.0
Stay safe and stay with ANC.
51:01.4
The health protocols, the ability of people to move around will likely contribute better to growth.
