Asian shares mixed, dollar breaks 110 yen markAgence France-Presse 12:08 am | Thursday, October 2nd, 2014
HONG KONG–Asian markets were mixed Wednesday, with Japan’s Nikkei giving up earlier gains despite a surprise pick-up in business confidence and the dollar’s breaching of the 110 yen level for the first time since 2008.
The dollar extended its run-up despite weak US indicators, but profit-taking in the afternoon saw it pare those gains. The euro continued to struggle after eurozone inflation hit a five-year low.
Tokyo ended 0.56 percent lower, giving up 91.27 points to 16,082.25, while Seoul sank 1.41 percent, or 28.55 points, to close at 1,991.54.
However, Sydney added 0.78 percent, or 41.29 points, to close at 5,334.1.
Hong Kong and Shanghai were shut for public holidays but markets are keeping a nervous watch on the southern Chinese financial hub as a pro-democracy protest moves into its fourth day.
Following the weekend police tear-gassing of demonstrators, there had been fears of clashes as the city’s government marked Chinese National Day Wednesday. But by mid-morning there had been no incidents.
Protesters, who have shut down some of the city’s main thoroughfares, have vowed to stay put until Beijing agrees to give them full universal suffrage.
In Japan the central bank said its closely watched Tankan survey showed confidence among large manufacturers increased to plus 13 in July-September. Markets had forecast a reading of plus 10.
The figure is welcome news for the government after the index dropped to 12 in April-June following a sales tax hike at the start of the quarter. The index marks the difference between the percentage of firms that are upbeat and those that see conditions as unfavorable.
Wall Street hit by weak data
However, the reading for large non-manufacturing sector firms sank to plus 13 from plus 19.
On currency markets the dollar climbed to 110.09 yen–its highest since August 2008–as investors bet on an early rate rise by the US Federal Reserve as the economy picks up pace, while the Bank of Japan mulls easing measures to jumpstart growth at home.
However, it later pulled back to sit at 109.77 yen in the afternoon, against 109.64 yen in New York.
The greenback gains came despite a rare batch of weak data out of Washington, with the Conference Board index of US consumer confidence falling to 86.0 from 93.4 in August due to concerns about the jobs market.
On Wall Street Tuesday the Dow eased 0.17 percent, the S&P 500 fell 0.28 percent and the Nasdaq lost 0.28 percent.
In other forex trade the euro bought $1.2625 and 138.58 yen against $1.2631 and 138.50 yen.
The single currency slipped below $1.26 Tuesday for the first time since September 2012 after data showed inflation at just 0.3 percent in September, its lowest since 2009, fuelling fears of deflation in the troubled bloc.
In China the official purchasing managers’ index of manufacturing activity showed growth stalled in September, sticking at 51.5.
The figure was unchanged from August and slightly above the 50.2 figure given by British bank HSBC in its own survey released Tuesday.
On oil markets US benchmark West Texas Intermediate for November delivery rose 36 cents to $91.52 a barrel in afternoon trade and Brent crude advanced 38 cents to $95.05.
Gold was at $1,213.29 an ounce against $1,207.30 late Tuesday.
In other markets:
— Taipei rose 0.26 percent, or 23.34 points, to 8,990.26.
Taiwan Semiconductor Manufacturing Co. added 1.25 percent to Tw$121.5 while Acer was 0.7 percent higher at Tw$21.55.
— Wellington added 0.37 percent, or 19.55 points, to end at 5,274.58.
Spark was up 2.02 percent at NZ$3.03 and Air New Zealand rose 1.55 percent to NZ$1.97.
— Bangkok edged up 0.11 percent, or 1.68 points, to 1,587.35.
Coal producter Banpu rose 1.69 percent to 30.00, while Bangkok Bank added 0.49 percent to 205.00 baht.
— Jakarta ended up 0.06 percent, or 3.33 points, at 5,140.91.
Paper manufacturer Indah Kiat Pulp & Paper gained 3.79 percent to 1,095 rupiah, while state-controlled miner Aneka Tambang slipped 2.25 percent to 1,085 rupiah.
— Manila gave up 15.01 points, or 0.21 percent, to closed at 7,268.06.
— Kuala Lumpur ended flat at 1,845.32.
Malayan Banking lost 0.10 percent to 9.95 ringgit and RHB Capital shed 1.36 percent to 8.71 while Telekom Malaysia added 0.15 percent to 6.65 ringgit.
— Singapore closed down 0.39 percent, or 12.65 points, at 3,264.09.
Agribusiness company Wilmar International fell 1.29 percent to Sg$3.05 while vehicle distributor Jardine Cycle & Carriage eased 1.21 percent to Sg$42.39.
— Mumbai fell 0.23 percent or 62.52 points to 26,567.99.
Wipro rose 3.22 percent to 615.55 rupees, while car maker Maruti Suzuki fell 3.11 percent to 2,968.90 rupees.
Businesses commit 450 MW to resolve power shortage—solonBy Marc Jayson Cayabyab | INQUIRER.net 8:11 pm | Wednesday, October 1st, 2014
MANILA, Philippines—The chairperson of the House of Representatives energy committee is still vouching for the Interruptible Load Program (ILP) to address the looming power shortage in 2015, and he has the figures to prove it.
Oriental Mindoro Representative Reynaldo Umali, co-chair of the Joint Congressional Power Commission (JCPC), said the private sector so far has committed 449 megawatts (MW), more than enough to plug in the 300 MW for contracting in resolving the power shortage during the summer next year.
He said the Manila Electric Company (Meralco) has committed 204 MW, while the Retail Electricity Suppliers Association committed 245 MW.
“So that is 449 MW of power that we can tap under the ILP. Kung ‘yun lang, baka sobrang sobra na ‘yun eh. 300 MW nga gusto ng Department of Energy eh. Baka ‘yun, sobra sobra na,” Umali said.
He said it’s only a question of how much pass-on costs the consumers would shoulder under the ILP.
Meralco had said the costs of ILP will be P200 million per 100 MW, and that the required 300 MW power will cost only about P600 million
This is a far cry from the P6 billion government wants to source from the Malampaya fund to lease generator sets, among the options to address the power shortage once the President is granted emergency powers, Umali said.
“Our desire is for consumers not to bear the burden of this impending power crisis,” the lawmaker said.
Under the ILP, big industrial and commercial customers who have the ability to produce their own electricity through generating sets should cut off or reduce their supplied electricity, particularly during peak periods of the day, and instead use their own generator sets.
This is to give way for the other customers who may need the power than the commercial users. The businesses are also required to contribute their excess energy reserves.
President Benigno Aquino III has asked Congress to grant him the authority to contract additional capacity precisely to address the looming power shortage during the summer, as granted to him under the Electric Power Industry Reform Act (Epira).
Epira allows emergency powers to the President “upon the determination by the President of the Philippines of an imminent shortage of the supply of electricity.”
“Congress may authorize, through a joint resolution, the establishment of additional generating capacity under such terms and conditions as it may approve,” Section 71 of the law reads.
Energy Secretary Carlos Jericho Petilla had said the agency is expecting a 600 to 800 MW shortage for Luzon in 2015, and that the President must contract at least 300 MW of the total shortage.
The agency had said the thinning power supply may be due to the looming El Nino phenomenon, the maintenance shutdown of the Malampaya power plan, increased or continuing outages of power plants, and the delay in commissioning of committed power projects.
The energy department had told the committee that at least P9 billion will be needed to purchase gensets and P6 billion to rent gensets.
The department had also set the following deadlines for the signing of the contracts in the following options – October 31, 2014 for the purchase and lease, December 19, 2014 for the voluntary ILP, and February 28, 2015 for the mandatory ILP.
Petilla said he was hoping the ILP would contribute as much as 700 MW of the shortage.
He also said the ILP is only voluntary and they could not compel businesses to participate.
Instead of immediately granting Aquino’s request, the leadership in the House of Representatives sought an inquiry in aid of legislation on the need to contract additional power.
New scheme to address power shortfall in ’15
Congress is no hurry to give Aquino crisis power
DOE eyes mandatory energy saving measures
Shortage, high cost of power hinder foreign investmentBy Amy R. Remo | Philippine Daily Inquirer 7:24 pm | Wednesday, October 1st, 2014
MANILA, Philippines—High electricity prices and lack of adequate power supply remain the biggest impediments to more foreign investments in the country, the head of the Philippine Economic Zone Authority (PEZA) said Wednesday.
Speaking at the Philippines-South Korea power plant vendors roadshow, PEZA Director General Lilia de Lima noted that such energy problems made it hard for the Philippines to position itself as a better investment hub than its neighbors in Southeast Asia.
Thus she urged South Korean companies participating in the roadshow to look at the various investment opportunities in the Philippine energy sector.
“We urge Korean companies to enter into joint venture with Filipino companies to put up power plants, to help address the country’s growing requirements and any shortfall in the future,” De Lima said, promising the investment promotions agency would extend full support to companies that decide to set up facilities in the country.
De Lima said that innovations by Korean companies in the energy sector would provide significant assistance to the country in terms of addressing the shortfall and ensuring stable and competitively priced power in the future.
The Philippines will need to double the current installed capacity of 17,000 megawatts by 2030 to address the expected growth in energy requirements over the long term, said Jesus T. Tamang of the energy policy and planning bureau of the Department of Energy.
Twenty Korean firms participated in the roadshow, all of which were exploring potential partnerships with local energy players, despite the difficulties being faced by Korea Water Resources Development Corp. (K-Water).
The visiting companies included Samjin Metal Co. Ltd.; Turbopowertech Co. Ltd.; PNC Co. Ltd.; Enesg; Sinjungwoo Industrial Co. Ltd.; Samyoung Fil-Tech Co. Ltd.; Dongsuh Industry Co. Ltd.; Hankook Coatings Co. Ltd.; KLES Inc.; J-E Tech Co. Ltd.; and Seobo Industrial Co. Ltd.; Powernix Co. Ltd., Korea Engineering Co.; Vitzrotech Co. Ltd.; International and Industrial Electronics Co. Ltd.; Higen Motor Co. Ltd.; Hisco Inc.; KNTEC Co. Ltd.; HANA Evertech Co. Ltd.; and Duon System Co. Ltd.
One of the biggest Korean energy players in the Philippines is Korea Electric Power Corp. (Kepco), which operates among other facilities the 1,200-MW Ilijan combined cycle power plant in Batangas.
K-Water meanwhile has yet to take over the 218-megawatt Angat hydroelectric power plant in Bulacan after submitting the highest offer of $440.88 million during a bidding held in April 2010.
Min Kyong-Ho, minister and consul general at the Embassy of the Republic of Korea in the Philippines noted that the two countries have been collaborating in the energy sector since the entry of Kepco in the mid-90s. The success of such projects “enhances bilateral cooperation and contributes to steady growth of the country,” he added.
Gov’t logs P393B in investment pledges
Foreign investment pledges down 38.8%
Gov’t seen to lose P12B in Swiss challenge for Bonifacio South Pointe dev’tBy Amy R. Remo | Philippine Daily Inquirer 7:23 pm | Wednesday, October 1st, 2014
MANILA, Philippines—The Philippine government stands to lose as much as P12 billion if the state run Bases Conversion and Development Authority proceeds with the conduct of a Swiss challenge for the development of the 33.1-hectare Bonifacio South Pointe property in Taguig.
In a statement issued on Wednesday, BCDA president and chief executive officer Arnel P. Casanova explained that President Benigno Aquino III’s legal and economic teams were convinced that a competitive bidding would yield the best deal for government instead of conducting a Swiss challenge as ordered by the Third Division of the Supreme Court.
In a Swiss challenge, a form of public procurement, a government agency that has received an unsolicited bid for a public project or services may publish the bid and invite third parties to match or exceed the unsolicited proposal.
A Supreme Court ruling, which was released only last month, favored the petition of SM Land Inc., which had sought a Swiss challenge instead of a public bidding after it submitted an unsolicited offer to develop the Bonifacio South property. Malacañang, however, thumbed down the petition and opted to sell the property through an open competitive bidding process.
The property firm of the Sy family then filed a case, citing the BCDA for breaching their agreement to conduct a competitive challenge.
BCDA filed on Tuesday a motion for reconsideration before the Supreme Court, as it stressed that the offer of SM Land at P38,500 per square meter was barely half the current market value of the property.
According to the BCDA, the current zonal value of the Bonifacio South Pointe property is at P100,000 per sqm, while its present market value has been appraised conservatively to be about P78,000 per sqm.
The agency added that the latest transaction at the Bonifacio Global City near the Bonifacio South Pointe was already at P500,000 per sqm when the Government Service Insurance System (GSIS) sold a 1,600-sqm property in September.
“The losses emanating from a bidding with a floor pegged at more than P12 billion below current market values will be much more,” the BCDA said in its motion.
“Clearly, this is grossly disadvantageous to government. We are asking the Court en banc to reconsider. Not only does it have legal basis, but it is also the better option for reasons of public policy,” Casanova further said.
On Aug. 13, the high court issued a decision, which permanently stopped the BCDA from auctioning off the Bonifacio South Pointe property. It also ordered the state agency to push ahead with the Swiss challenge.
But in a dissenting opinion, Associate Justice Marvic Victor Leonen noted that “there would be no unjust enrichment on the part of BCDA or injustice on the part of SMLI if the competitive challenge is terminated. The BCDA has already offered to return the value of SMLI’s security plus interest and admitted its obligation to return it upon termination of the process.”
“Any advantage given to SMLI now, arising from ambiguous terms and erroneous interpretation of the joint venture guidelines may have unnecessary and undesirable effects. It is partiality in favor of one company that has deterred investors,” Leonen warned.
BCDA to appeal SC ruling on sale of Bonifacio lot
BCDA turns over P100M in dividends to Treasury
Bill seeks local bourse for SMEsBy Marc Jayson Cayabyab | INQUIRER.net 7:00 pm | Wednesday, October 1st, 2014
MANILA, Philippines—A congressman from a real estate family wants to set up a stock exchange market exclusively for small and medium enterprises (SMEs).
Las Piñas Representative Mark Villar filed House Bill 4942 titled “Small and Medium Enterprises Stock Exchange Act of 2014″ to improve the SMEs’ capitalization to further the growth of these businesses.
The bill seeks to create a SME Exchange (SMEX) that will allow SMEs, which cannot meet the capitalization requirements for public listing by the Philippine Stock Exchange.
Under the bill, SMEX will give SMEs a steady and cheap pool of funds to meet the business requirements.
Representative Villar, the son of real estate magnate and defeated presidential candidate Manny Villar, said SMEX seeks to make these businesses “investment ready.”
The solon added that in the long run, the local bourse for SMEs would broaden the capital market.
In the bill’s explanatory note, Villar said SMEs comprise 90 percent of the total number of business establishments and 97 percent of exporters.
“Unlike large companies, SMEs experience more difficulties in obtaining finance to fund their capitalization or expansion requirements,” he said.
The bill defines the SMEX as a stock market catering to SMEs that will be self-regulatory and under the supervision of the Office of the President.
The bill will also create a Board of Governors that will manage and control the SMEX and will be composed of the Governor of the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission (SEC) representative, the Philippine Stock Exchange representative, and five members from the SMEX.
According to the bill, only registered members may deal or transact businesses with registered brokers or securities dealers.
Simplify trade process for SMEs, DTI urges Asean
SMEs hobbled by high power cost