01:13.1
They're also reacting to earnings from Chinese tech giants.
01:17.0
On Tuesday, Tencent reported higher profit that neared $6 billion, while Alibaba profit plunged.
01:24.7
Leading to a slide in its shares.
01:27.1
Now, China has also criticized the Biden administration's move to formally hike tariffs on Chinese imports, specifically on electric vehicles.
01:36.5
The world's number two economy has vowed action.
01:39.1
Traders also await inflation data from the U.S. out later today.
01:43.3
Taking a look at the board now, the Nikkei 225 is up by nearly a percent, while South Korea's Kospi is closed for a public holiday.
01:51.7
The ASX 200 also higher.
01:54.7
As investors sparse through Australia's annual budget.
02:01.0
A look now at the financial markets in the United States.
02:04.4
Major indices on Wall Street ended Tuesday on a positive note.
02:08.1
This follows remarks by Federal Reserve Chair Jerome Powell at an event in Amsterdam that their inflation outlook remains intact.
02:16.0
Overnight, U.S. producer prices were also out, showing it climbed more than expected in April.
02:24.1
After a very good day, we had a very good day.
02:24.4
We had a very good day.
02:24.5
We had a very good day.
02:24.5
We had a very good day.
02:24.5
We had a very good day.
02:24.6
We had a very good day.
02:24.7
We had a very good day.
02:24.7
We had a very strong first quarter and a very rocky April.
02:29.1
Now we're seeing things sort of rebound a little bit.
02:32.7
There's a lot of expectations about the inflation numbers tomorrow, of course.
02:39.4
And quite frankly, it's about expectations.
02:42.0
You know, if we expect that the inflation numbers will be improved, then the market will boom.
02:49.2
And if they are improved, then the market will boom.
02:51.3
But if they come out still...
02:54.7
A little stubborn or even higher, then the market will also react for a day or so.
03:00.5
You know, somewhat of a reflex reaction as the market always does.
03:03.5
But then ultimately, things balance out in the end.
03:07.7
The market is showing some weaknesses in certain areas.
03:12.2
But overall, corporate earnings and consumer spending is reasonably strong.
03:17.6
So, this is why we're seeing a reasonably strong market still.
03:24.7
Take a look at the U.S. futures now.
03:26.5
They are pointing to a flat open as Wall Street braces for April's Consumer Price Index.
03:33.6
Now, here's a quick look at the business headlines from overseas.
03:37.1
Ilya Sutsnever, or Kevver, the co-founder of OpenAI,
03:42.3
announces his departure from the firm after nearly a decade with a Microsoft-backed company.
03:48.2
He did not disclose the reason why he's leaving.
03:50.9
But this comes months after OpenAI's board fired.
03:54.7
he brought back within days the firm's co-founder and CEO, Sam Altman,
03:59.7
due to concerns over AI safety.
04:03.2
Now, speaking of AI,
04:04.9
Google parent company Alphabet bears details of how it is building on AI across its business.
04:10.9
This includes a beefed-up Gemini chatbot and improvements to its price search engine.
04:17.1
Now, the announcement highlights Google's efforts to refresh its products since OpenAI's 2022 launch of chatbots.
04:24.7
It's a very important technology.
04:33.4
and allow people to use it for thinking.
04:34.3
And in the U.S. Justice Department,
04:35.1
concludes Boeing,
04:37.2
breached obligations in a 2021 agreement that shielded a firm from criminal prosecution
04:42.3
over fatal 737 MAX crashes in 2018 and 2019.
04:47.7
Now, the incidents took the lives of over 300 people.
04:51.2
The U.S. DOJ says the firm failed to design,
04:54.7
and enforce a compliance and ethics program to prevent and detect violations of U.S. fraud laws across its operations.
05:02.8
Now, it adds, Boeing is subject to prosecution, but government is determining how it will proceed with this matter.
05:11.5
Here at home, the local corporate headlines this morning.
05:14.5
Citicorp Renewable Energy Corporation setting its initial public offering to June 7.
05:19.2
Ed Saavedra's firm says the Philippine Stock Exchange has approved the offering of up to 8.9 billion common shares.
05:26.8
CREC is seeking to raise as much as 8 billion pesos from this IPO.
05:31.7
Now, the offer price is at 3 pesos and 88 centavos apiece, with offer period set from May 27 to the 31st.
05:40.8
Next, Philinvest Development Corporation books 2.9 billion pesos in quarterly net income.
05:46.5
This was up 36 percent from strong.
05:49.2
Contributions of its banking, power, and property segments.
05:53.5
Revenues also higher at 26.4 billion pesos.
05:57.5
And also in earnings, A. REIT's Q1 net income jumps 45 percent to 1.5 billion pesos.
06:04.1
Revenues stood at 2.11 billion.
06:07.0
As overall occupancy remained high at 96 percent.
06:10.4
Now, A. REIT also declared cash dividends of 56 centavos per outstanding common share.
06:16.1
It says this is the highest since its IPO.
06:19.2
In 2020, dividends are out on June 13th to shareholders on record as of May 28th.
06:28.7
Moving on, after inflation data in the U.S. later today, the focus here at home turns to the Philippine Central Bank for its latest policy decision that's coming out on Thursday.
06:38.0
Now, it's slower than expected growth in the first quarter, accelerating inflation on a weaker peso.
06:43.5
What are the prospects of rate cuts still happening this year, at least in the Philippines?
06:48.0
We'll discuss this.
06:49.2
And more with Katrina L.
06:50.7
She's a senior economist at Moody's Analytics.
06:53.5
She joins us live from Sydney, Australia.
06:55.7
Hi, Katrina. Good morning.
06:59.3
Now, the Philippine economy had a bit of an expansion.
07:01.8
I mean, not as bad as expected in the first quarter amid persisting headwinds.
07:06.4
You have inflation, high interest rates.
07:08.6
Now, how are you plotting the GDP track for this year and next?
07:12.7
So, our expectation actually is that the Philippines will have a decent expansion this year.
07:18.5
We're looking at...
07:19.3
We're looking at GDP growth hitting 5.9% this year, and that's, you know, a little bit stronger than that 5.6% that they experienced last year.
07:27.7
So, you know, these are pretty good growth figures, and it really does position the Philippines to be one of the strongest performers right across Asia Pacific.
07:37.1
And I think one of the key drivers of that ongoing strength is really coming from the household sector.
07:43.3
They've been an ongoing and consistent upward contributor to these really decent growth rates.
07:49.2
So, the Philippines has been experiencing.
07:51.4
I mean, of course, as you mentioned, that first quarter GDP data did surprise on the downside a little bit,
07:57.7
and it does show that households aren't, you know, spending with the same sort of exuberance as they previously had
08:05.2
because that high interest rate environment is really kind of impacting their household budgets
08:10.9
as well as inflation still being elevated is also hurting purchasing power a little bit as well.
08:17.1
All right, Katrina.
08:17.9
We're seeing GDP.
08:19.2
So, for 2024 at 5.9, hitting government's target of 6% to 7% this year.
08:25.0
I don't know if it's a long shot, but what about next year?
08:27.6
Do you see GDP settling within the target of now 6.5% to 7.5% range?
08:34.5
Yeah, that's a good question.
08:35.7
So, our expectation is that GDP growth next year will also remain around the 5.9%.
08:41.6
So, it will just be, you know, a whisker short of that 6% expansion.
08:47.3
But I think, you know, overall,
08:49.2
these are good growth rates.
08:51.1
But I think what we need to be really cognizant of when we're looking at the Philippines' growth rates
08:55.8
is also what happens overseas.
08:57.9
I think the export performance is going to be critical here.
09:01.0
And there's a big question mark about how the global economy is going to be performing.
09:05.9
And in particular, when we're going to see easier monetary policy settings
09:10.0
out of those major economies overseas,
09:13.7
thinking here in particular about the U.S. and also Europe.
09:17.4
Because when we do start to see those...
09:19.2
when those rate cuts come through,
09:20.7
that will, of course, flow back into positive spillovers for the Philippines' economy
09:25.4
via a stronger export performance.
09:27.4
But unfortunately, we're just not seeing those rate cuts come through yet from overseas.
09:32.2
But when we do, that should, you know, provide a boost.
09:35.7
And that might even be enough to get us past that 6% growth rate.
09:40.2
But at this point, it's going to be, unfortunately, just shy of that.
09:44.3
Katrina, what's the possibility, I mean, what are the implications of, you know, controlling exports?
09:49.2
To balance out, I mean, controlling imports?
09:51.4
To balance out the low export numbers that we're experiencing in the Philippines, really?
09:56.4
Yeah, it's a good question.
09:57.4
So really, I mean, what we're seeing is that it's difficult.
10:02.3
And I think when we're looking at the import figures in particular,
10:05.4
we need to be cognizant of the weak currency.
10:08.4
You know, the peso is down about 4% year-to-date against the dollar.
10:13.0
If we do see kind of renewed weakness in that currency,
10:16.9
then that will kind of continue to add
10:19.1
to the import bill and it will also add to imported inflation
10:23.1
and more broadly, inflation right across the economy.
10:26.6
And then that's, of course, going to put further pressure on households and also businesses.
10:31.1
So I think we need to be mindful of that.
10:33.3
But at the same time, I think the export picture is actually holding up not too bad,
10:38.4
considering just how the global economy is underperforming its capacity,
10:43.7
given these high interest rates that it is kind of grappling with right across the globe.
10:49.1
To your key drivers, you were mentioning about the consumer sector being at least resilient,
10:54.8
at least for the first quarter of next year
10:57.7
but it's also a reality that, you know, inflation can bite
11:01.3
and we have El Nino to grapple with,
11:03.8
interest rates remaining high, creating some affordability constraints now in the Philippines.
11:08.2
How are you seeing consumer spending now affected by this, impacting GDP eventually?
11:15.1
Well, I mean, I think the inflation side of things is really critical here.
11:18.8
And we're seeing it coming out of the Central Bank commentary as well.
11:22.9
I mean, they're incredibly worried about food prices because it's such a key driver of inflation.
11:28.7
And it's also such an important input into household purchasing power and more broadly, household consumption.
11:36.0
So our expectation is that inflation will actually remain kind of elevated in the next couple of months because of that high food prices.
11:44.6
And then hopefully we'll come down over the course of the second half of this year.
11:49.3
And when you talk about high food prices, one of the solutions there is really importing.
11:53.6
The country is in fact focused on using that measure to control food prices with one more hurdle, of course, in the next few months, the full effects of El Nino.
12:03.7
Now, as it is, the agriculture sector has now suffered losses at about, what, 5.9 billion pesos.
12:09.8
Now, what kind of impact from El Nino are you seeing that would significantly temper?
12:14.6
Growth in the upcoming quarters, at least.
12:17.5
So I think what it means is if we're looking at it from a monetary policy point of view, I think we can see the growth impact quite clearly.
12:25.8
Because I think if we weren't seeing such high food prices and overall such high inflation, we might see a central bank that isn't kind of maintaining a hawkish bias.
12:36.0
I think they might be more willing to cut rates a lot sooner.
12:40.1
And we need to remember as well that monetary policy is a blunt instrument.
12:44.7
Keeping rates higher with one of the reasons being this elevated food price inflation environment that has an adverse impact across domestic demand in the Philippines.
12:55.6
It's not just impacting household consumption having higher rates.
12:59.3
It's also impacting private businesses as well, as well as investment.
13:05.1
So it's this wide reaching impact and monetary policy is just one example of how that elevated inflation environment is kind of holding back growth.
13:14.7
All right, Katrina, now that you brought up, you know, monetary policy, the BSP is set to keep rates steady.
13:21.7
At least that's expectation tomorrow.
13:23.9
Moody's Analytics now seeing a possible rate cutting of about 25 BPS as early as August and another in Q4 if inflation and the peso, of course, would stabilize.
13:35.3
Now, two points in that view, expectations that food inflation is decelerating in Q3 and of course the peso appreciating versus the U.S. dollar.
13:44.6
How intact are those expectations as of now?
13:48.3
Yeah, so it's there are some big risks there.
13:51.2
So our expectation for tomorrow's meeting is that they will keep rates steady.
13:56.0
And, you know, what what really depends going forward on this future path is, as you mentioned, what happens with inflation.
14:03.5
I think that's going to be a key driver.
14:05.6
And also what happens overseas in terms of U.S. monetary policy rate expectations and then feeding that back what that means for the patient.
14:14.6
So if we see that the peso is kind of experiencing renewed weakness, then that's going to be enough for the central bank in the Philippines to actually trigger holding rates higher for longer rather than actually providing that additional kind of support by cutting rates.
14:32.9
So rate cuts are only going to come to pass if we actually see the peso remaining steady and even seeing some sort of appreciation as well as food prices continuing to.
14:44.6
Come down and also on a sustained basis coming down.
14:48.9
You know, I agree because, you know, federal reserve chair Jerome Powell's to keeping the higher for longer narrative for U.S. rates at least.
14:56.0
And, you know, we know that the Banco Central, the central banks, of course, unlikely to ease policy before the U.S. does.
15:03.3
Now, what does this mean for rate cutting timelines for you?
15:06.0
Is this going to be proving a case that we might experience those cuts maybe in the first quarter of 2025 and not this year?
15:16.3
I mean, there is the possibility that we won't actually see any rate cuts from the Philippines this year.
15:21.1
I think they'll be really careful about wanting to move probably only after the Federal Reserve does because of that peso weakness.
15:29.9
And so, you know, we're watching that U.S. inflation data for April very closely just to see how that would change our view.
15:38.3
I mean, at this stage, our expectation is that the Fed will deliver its first rate cut in September.
15:43.2
So that does bring.
15:44.9
Some hope that we will see easier policy settings in across Asia Pacific this year.
15:50.3
But certainly it is a risk that we won't actually see any rate cuts this year if U.S. inflation continues to remain elevated and doesn't come back to those target ranges as the Fed would like it to.
16:03.1
And of course, those higher rates are supposed to impact growth and expansion.
16:07.0
And let's talk about the business environment now and the expansion environment in the Philippines.
16:10.6
You know, a lull in these activities due to high rates may bear down.
16:14.6
And growth momentum, at least for momentum.
16:17.4
Now, when can we expect to see a clearer picture of the effect of the high borrowing costs on businesses, investments and expansions?
16:25.3
Considering it may take a while, there's a lag before you actually feel the bite of these interest rates.
16:32.2
We see, unfortunately, there is a lag with monetary policy.
16:34.9
So it does make it really difficult for policymakers and economists as well to actually view how those monetary policy settings are filtering through the economy.
16:46.1
But I think we are starting to see the impact of those higher rates through the business environment.
16:52.0
Now, we are starting to see a bit of a pullback in investment.
16:55.6
But I think, you know, we'll continue to see that right through the second half of this year.
17:00.8
I guess the hope and the optimistic take is that the expectation, if the global economy, you know, and global demand rather starts to improve in the second half of this year,
17:12.9
then that will, of course, provide.
17:14.6
Some support to those export facing businesses in the Philippines.
17:18.3
So it's it's a bit of a tussle in terms of ongoing domestic weakness, but also seeing that offshore environment as well and how that impacts.
17:28.3
Lastly, Katrina, given all that we've tackled, the Philippines is still seen as among the fastest growing economies in the region this year.
17:35.6
What do you remain the threats that might, you know, dislodge the country from that performers list?
17:42.3
Oh, that's a good question.
17:44.6
I don't know if we'll dislodge, but I think we need to remain cognizant of all the geopolitical risks that continue to to threaten the global economy.
17:52.2
I think if we do see a re escalation of geopolitical risk and we see a sustained spike in oil prices, that will certainly crimp growth right across Asia Pacific and Philippines.
18:04.6
Unfortunately, won't be immune from that either.
18:07.7
All right. Katrina, Moody's Analytics Senior Economist, thank you so much for joining us this morning.
18:12.9
Have a great day.
18:17.5
On to more news, President Ferdinand Marcos, Jr., optimistic the Philippines could regain its footing in the global shipbuilding industry.
18:25.1
Mr. Marcos made that remark as he witnessed the partnership between U.S. equity firm Cerberus and South Korean shipbuilder HD Hyundai in Subic Bay.
18:35.8
Marcos hopes the deal will cement Subic as an economic growth driver.
19:14.6
Cerberus acquired the Subic shipyard in 2022 and invested around $40 million to revive its shipyard operations.
19:22.5
HD Hyundai intends to use its dry docks for its shipbuilding business, potentially boosting economic activity in the area.
19:30.0
Other companies believe the deal will create more jobs and bring more investments into the Philippines.
19:36.6
The partnership between HD Hyundai and Cerberus will bring substantial investment,
19:41.2
create thousands of jobs, and put the Philippines back into the highest tier of maritime manufacturing.
19:48.1
It will take some time, of course, for operations to begin ramping up.
19:52.1
This is a big thing, and you can't just flip a switch and go.
19:56.2
But that process begins today.
19:58.7
HD Hyundai has been a committed partner of the Philippines for many years.
20:03.4
Now, these recent advancements are part of our broader vision to expand our cooperation
20:09.7
into the maritime construction industry.
20:11.2
We are transforming the Subic facilities into a state-of-the-art maritime complex
20:19.4
set to handle offshore wind structure projects, ship block fabrication, and ship repairs, and so on.
20:29.9
President Marcos approved the creation of an electronic platform to digitalize government procurement.
20:36.2
This was among the proposals approved during a Tuesday sectoral meeting at the palace.
20:41.2
The electronic marketplace initiative will be launched by the end of July,
20:45.6
first for the purchase of state vehicles.
20:48.0
The head of the agency's procurement service says the platform could shorten public bidding to just days
20:54.1
from the usual one-month period.
20:56.7
Budget officials also seek to assure the public the initiative will be managed with transparency.
21:03.6
This will really be open.
21:05.2
We are looking at what you call yung pong tinatawag ho na machine-readable files.
21:11.2
Later on, if they need an in-depth determination of what's in there,
21:15.6
we can basically provide that.
21:17.2
But of course, essentially, there are data or information already appearing or available in the site
21:22.1
that the public or the private sector market operators can look at
21:26.9
to see the transparency characteristic of the system.
21:36.0
The Philippine government is introducing electric ferries
21:39.2
as a more sustainable mode of transportation in the country.
21:43.4
The Transportation Department says talks are underway with potential shipyards for this.
21:49.0
It's also studying possible energy sources for the initiative.
21:52.5
The agency adds the Asian Development Bank is exploring ways to help finance the program.
21:58.2
Also in the DOTR's pipeline, a Manila Bay-Pasig River-Laguna Lake ferry system.
22:05.1
The agency aims to finish its viability study on the ferry system,
22:09.2
within the year, and bid out the project as a public-private partnership program by 2025.
22:17.3
Air Asia Philippines expecting robust growth in the second half of the year
22:21.7
amid the anticipated surge in travelers.
22:24.7
The Asian airline cites a recent study by travel platform Kluk for its rosy outlook.
22:31.4
This revealed that over 70% of Filipinos are willing to spend more on foreign travel.
22:36.5
Now with a running load factor of over 82%,
22:39.7
Air Asia is confident that its Q2 figures will surpass last quarter's load factor of 92%.
22:47.6
With more Filipinos booking their last-minute summer trips and to further boost air travel,
22:53.2
Air Asia is offering a one-way base fare of P1,750 to some parts of Australia.
23:00.8
Now the offer runs up until May 19th.
23:06.2
State-run pension fund SSS is urging,
23:09.2
including government employees, including village workers, to be part of its insurance program.
23:14.0
Jackie Pascual has details.
23:17.2
Social Security System or SSS wants some government employees to become members of the pension fund.
23:24.0
Its president, Rolando Macasaid, said,
23:26.3
many government workers who are not regular employees or who are under a job order contract
23:32.1
are not part of any social insurance program.
23:35.3
And this, he said, is possibly by the millions,
23:39.2
include village workers.
23:41.6
There are 50,000 barangays in the entire Philippines, about 45.
23:46.6
I am rounding it off to 50,000 po, no?
23:50.1
Ni isa dyan po, hindi yung miyambro ng CSIS.
23:54.7
Lato yung barangay kapitan, pag silbi sa pansa natin,
23:59.5
pag after 30-40 years po, kawawa, wala ni 5 na tatanggap.
24:05.6
A village chief in
Taguig admitted to have stopped contributions,
24:09.2
admitting to SSS for several years now,
24:11.8
after he resigned from a private company.
24:14.4
He's glad that SSS has signed a memorandum of understanding with Taguig government
24:19.3
so village workers may become members of SSS
24:22.9
and their contribution will be deducted from their monthly pay,
24:27.3
similar to the setup of private firms.
24:30.3
Lahat po ng empleyado ng barangay ay wala pong benepisyong makukuha mula sa SSS at GSIS either.
24:36.7
Kasi po, hindi sila sakop.
24:39.2
Kami salary, kami po ay parang allowance lang po.
24:42.9
SSS hopes this new measure can add more members and help increase the fund.
24:47.3
It targets to hit 100 billion pesos in income this year from last year's 83 billion pesos.
24:54.7
The social insurance program also plans to extend their services to motorcycle hailing app riders,
25:00.9
athletes, and micro-entrepreneurs so they can avail of benefits in times of need.
25:06.8
At birth, gusto ko may SSS number ka na.
25:09.2
So kinausap ko yung PSA.
25:11.0
Pero at the age of 18, pagka may kita ka na, pwede ka na magsimula magbaya.
25:17.1
Makasahit added that they are also beefing up its investment portfolio for the benefit of all members.
25:22.2
He said they may invest in projects where Maharlika Investment Corporation is also investing,
25:29.0
but only in select and less risky projects.
25:32.9
Pension fund kami, hindi kami development fund.
25:39.2
Ang pera ng SSS, hindi ko pwede ilagay sa mga high-risk investments.
25:47.7
Whatever Maharlika invests in, if we feel we can invest, we can also invest.
25:53.4
He adds they would adopt the so-called brownfield investment or invest in existing projects
25:59.6
as opposed to greenfield investment or new projects.
26:03.8
Ang SSS, hindi ko ilalagay yung pera sa isang korporasyon na nagsisimula.
26:09.2
Wala pa lang ng construction.
26:10.5
Halimbawa, toll road, wala pa siya.
26:14.3
Hindi ako maglalagay pera ng SSS.
26:16.0
Pero kung sabihin mo, say Mr. Pakidin, sabihin niya,
26:19.6
Rolly, do we want to buy the NLEX?
26:23.8
Why? Wala nang construction risk.
26:27.3
Makasahit is seeing a better year this 2024 with first quarter earnings already reaching P33 billion.
26:34.2
He added that they've also welcomed a million new members in the first quarter alone,
26:38.5
a number they usually achieve in a year.
26:41.9
Jackie Pascual, ABS-CBN News.
26:45.9
Now here's a look at the other stories we're tracking today.
26:49.1
Happening this hour, progressive groups hold a forum on the maritime resources of the Philippines amid China's aggression.
26:56.4
Meanwhile, at 10 a.m., the Philippine Coast Guard and the National Security Council will also give an update on the situation in the West Philippine Sea.
27:04.5
And at 2 p.m., President Ferdinand Marcos Jr. will attend the National Highway...
27:08.5
Higher Educations Day Summit that's going to happen in Pasay City.
27:14.8
Now, time for a short break.
27:16.4
When we come back, Matthew Cabangon joins us to give you your midweek trading guidance.
27:21.0
Market Edge will be right back.
27:38.5
You're still watching Market Edge.
27:47.6
The headlines, the Philippine Navy deploys a warship to Escoda Shoal in a bid to stop China's suspected reclamation activities.
27:56.0
House leaders ask the Philippine Senate to end their investigation of the so-called PIDEA leaks.
28:03.1
And Philippine Justice Department taps the National Bureau of Investigation to probe foreign diplomats,
28:08.2
allegedly, to the Philippines.
28:08.5
They're also allegedly committing illegal activities in the country.
28:13.5
Time to zip through the top headlines for major business papers from Business World.
28:18.1
The head of the Sugar Regulatory Administration saying they are taking steps to help the industry meet the export quota in the U.S. of raw sugar.
28:26.7
SRA Chief Pablo Ascona saying they are targeting an initial shipment of the sweetener by the month of June.
28:35.1
And from Business Mirror, the European Chamber of Commerce...
28:38.5
The Philippines calls for the inclusion of eliminating import duties for European vehicles in Manila's free trade deal with the EU.
28:47.4
And from Philippine Star, Sofitel Philippine Plaza's president says they will offer separation packages and job training seminars for its workers who will be affected by the closure of the five-star hotel by July.
29:02.6
Philippine shares officially kick off trading this Wednesday.
29:05.5
The PSE's main index opened lower this morning.
29:08.5
Down 0.4% at 65.78.
29:12.8
Now joining us for his market guidance is Matthew Cabangon, president of AAA Equities.
29:17.9
Hi Matthew, good morning.
29:19.8
Hi Stan, good morning. Thank you for having me back on the program.
29:22.7
Alright, let's talk about the market now.
29:24.2
It is still range trading, expected to do so for some time.
29:27.7
How must investors take advantage now, Matthew, of this lot?
29:32.1
I've said it before and I'll say it again.
29:34.4
This market has been a stock picker's market for the past.
29:38.5
Better part of two years.
29:40.3
It's been difficult trading based off index levels.
29:44.3
As you said, it's been range bound for so long.
29:47.3
Despite so much good data coming out.
29:50.2
And I think it's frustrating for a lot of people.
29:52.3
So I think it's important for investors to be choosing the stocks that outperform regardless of what the economic headwinds are.
30:03.4
Okay. Now Matthew, you can't help but feel some sort of deja vu here.
30:08.5
You're likely mirroring 2023 track for stocks high and well in the first quarter.
30:15.0
And then you experience this doldrum in the middle of the year and then a slight pickup towards the end.
30:20.2
Is it going to be the same?
30:23.6
Well, it's really hard for me to tell what sort of patterns we're going to see.
30:28.6
But I do agree with you.
30:29.6
It does feel like a lot of deja vu.
30:33.4
Perhaps the old adage of selling in May and going away might hold true.
30:39.0
But again, you have to be selective.
30:41.9
You have to pick the winning stocks.
30:44.6
And that's how you outperform in this market.
30:47.2
You have to be an all-weather investor.
30:49.5
All right. Let's talk ultra short term now.
30:51.7
When you talk about this range of 6,300 to 6,800, we're now trading at around, what, 6,600 today.
30:57.5
We went back to 6,500.
30:59.4
It's not yet too close really to current psychological resistance.
31:03.1
Do you foresee more participation still at this stage?
31:05.9
As you mentioned earlier, this is, of course,
31:08.5
a trader's market.
31:10.3
Well, certainly in the short term, I think the bias is upwards.
31:15.1
Again, our market takes our cues from global equity indices.
31:21.2
And just based off that, I do think the path of least resistance is higher.
31:26.1
I think a lot of the gloom and doom that we felt a week or two ago, that's largely gone away.
31:32.6
But so, yeah, in the short term, I do think there is a bias for our market to go higher.
31:38.5
Matt, you know, for those into, you know, value investing, what is the current guidance when it comes to stock picking?
31:43.8
Because we're looking at a no-touch policy still for second and third liners, maybe just a few of them doing well.
31:51.0
And then the big ones, the big boys are as well consolidating and not very encouraging in terms of price action.
32:00.1
So I think the number one advice I could give investors at home is to follow the money.
32:06.5
Last week or so, we have been...
32:08.5
We've been seeing corporations give out their first quarter net income.
32:12.6
And some of these numbers are just simply eye-popping.
32:17.0
Net income growth of 15, 20, sometimes even 30%.
32:21.1
And these aren't the small companies.
32:22.7
I'm talking about the blue chips.
32:25.0
These are numbers we haven't seen since COVID.
32:28.1
So by many measures, the economy is firing on all cylinders.
32:34.4
Now, this reality does not...
32:38.3
It's not being reflected in the stock price.
32:40.5
So you have companies making well above their all-time high net income.
32:45.5
But their stock price has been flat for about 10 years.
32:49.8
There's a disconnect there.
32:51.6
And in that disconnect, I think, is where the opportunities are.
32:55.0
So for the investors at home, you know, you don't have to look hard to find promising stocks.
33:02.1
You don't have to dig through sort of small microcaps.
33:06.0
They're hiding in plain sight.
33:07.6
And that's where...
33:08.3
I think investors should be positioning themselves for the long term.
33:13.0
You brought up earnings.
33:14.2
Now, the first quarter earnings season, of course, wrapping up.
33:16.7
Still with many corporates, as you mentioned, earning above or exceeding expectations.
33:21.5
How is second quarter looking now when you talk about the lag effects of higher interest rates?
33:28.0
I remain optimistic about the second quarter.
33:32.6
I think there has, rightfully so, been worries about...
33:38.3
inflation and high interest rates.
33:41.2
But, Stan, we've been having these worries for, what, two years now.
33:46.3
And it hasn't really materialized, you know.
33:48.5
So I think at some point, we have to stop crying wolf and really face the reality that the economy is firing on all cylinders, as I said previously.
34:00.3
Now, when you look at this market, you have, you know, low participation and prices are not really moving significantly.
34:07.1
It makes you think about...
34:08.1
When you think about capital formation now, these efforts have been a challenge to raise capital by way of the PSE.
34:16.8
Lately, we saw our first IPO fizzle with OGP shares still struggling to find, you know, the right price level.
34:24.3
What was your experience like for this first IPO this year?
34:28.3
I think this IPO is a little strange to me because I actually think it's a very attractive opportunity.
34:34.1
I don't think a lot of people really study...
34:38.1
I don't think a lot of people really studied what this company has to offer.
34:42.5
I think it is primarily a dividend play.
34:45.5
It's projected at about 15-16% dividends per year, but still, the market doesn't seem to want it.
34:52.8
There must be some hesitation over the sustainability of gold prices because their dividend will depend on what gold prices are moving forward.
35:04.3
But, you know, I think this is just people being antsy.
35:08.1
But, if I'm not mistaken, the company will be declaring their first dividend for the third quarter.
35:15.2
So, I think as we approach that first big dividend date, you know, I feel quite confident that the stock price will move higher.
35:23.7
Because until then, people are just sort of speculating on how sustainable this gold rally is.
35:29.6
And I'm wondering now how this salvo in the IPO scene for 2024 will pan out.
35:34.6
In fact, we have one more next month, Citicor Renewable.
35:38.1
Parent of CREIT, the largest REIT offer on renewable energy, moving its listing to June.
35:44.4
Now, what is your take on this listing?
35:47.1
It's priced at $3.99 or 3.88% apiece.
35:52.8
Well, I personally have not yet taken a look at the prospectus.
35:56.7
I'm not sure if it's been published.
35:58.3
But, you know, let's call a spade a spade.
36:01.9
The market sentiment towards IPOs has not been great and has not been great for a while.
36:08.1
I'm not sure what it will take to get that reunion or that marriage of excited IPO investors and IPO companies back together.
36:19.5
I'm not sure what the catalyst for that will be.
36:22.7
My best guess is that a strong performing IPO, you know, strong price action cures all things.
36:30.1
So, until then, I do believe most people will be a bit on the back foot.
36:35.8
Lastly, let's talk about the big event.
36:38.1
Tomorrow, we're anticipating not much change in terms of interest rates as the BSP meets and announces policy.
36:45.1
What track are you seeing at least for rate cutting?
36:47.6
Because just last week, the prevailing view for rate cuts happening in the first quarter of 2025.
36:53.6
But, you know, with the new GDP figures and encouraging, a bit encouraging inflation prints coming out, not as worse as expected.
37:01.9
Bets are now back to possible rate cuts at least in the last quarter of 2024.
37:07.1
Some are even saying.
37:08.1
As early as August or September, that's Moody's.
37:10.8
What's your stand on this?
37:13.9
I'm still very personally in the rate cut by the fourth quarter camp.
37:18.7
It has gotten a bit, you know, a bit more popular to have the view that we actually see a rate hike instead of a rate cut.
37:26.3
I don't personally believe that.
37:27.9
I think that's just being contrarian for contrarian sake.
37:31.3
I think central bankers around the world have communicated quite clearly that they intend to.
37:38.1
They've cut rates.
37:40.7
They've also similarly communicated that expectations are still for it.
37:46.2
It's still for inflation to come down.
37:47.5
So I don't see a reason for rate hikes.
37:52.4
Now, as for why it's in the fourth quarter, again, inflation is still stubborn.
37:58.0
I'm not going to assume too aggressively that it's going to be a straight line down for inflation from here.
38:04.5
So, you know, it's best to be a bit conservative.
38:07.1
And I think before.
38:08.1
Before fourth quarter is probably the right time, given the information that we have today.
38:13.1
On that note, Matthew Cabangon of AAA Equities again.
38:16.0
Thanks a lot for joining us for this conversation.
38:17.8
Have a great day.
38:19.7
Have a great day.
38:21.3
More stories now.
38:22.1
Philippine senators reject proposals to re-empower the National Food Authority to import and sell rice.
38:28.9
Now, the Agriculture Department asked for the move during deliberations on the proposed changes to the rice tarification law.
38:36.1
The DA asserts this will help.
38:38.1
But temper high prices of rice.
38:40.2
But senators fear this would lead to more corruption in the NFA.
38:45.0
Over 100 NFA employees were recently suspended due to an alleged unauthorized sale of buffer stocks.
38:53.1
Kung gusto ng President of the Philippines, kunin niya yung power.
38:58.1
Kaya, we have very bad experience sa NFA.
39:01.6
Walang wala ng tiwala ang sino mamababatas dito sa Senado.
39:06.8
At gayon din ang mga magsasabi.
39:08.1
At saka, basta pinakialaman ng NFA, sad to say, may kababalaghan.
39:14.0
Meanwhile, a bill to amend the rice tarification law is moving forward in the lower chamber.
39:22.9
The House seeks to pass the bill on final reading next week.
39:28.1
Farmers in the northern Philippine province of Ifugao blame the prevailing El Niño phenomenon for their stunted harvest.
39:34.7
Lady Bisoncho reports.
39:39.0
Farmers in Tinok, Ifugao have started harvesting carrots this cropping season.
39:43.9
But this year, there were more crops that were stunted compared to previous years.
39:50.1
Farmers blame the El Niño phenomenon for the lack of rainwater for their crops.
39:55.0
Tinok Town is a rain-fed area, being one of the highest points in Ifugao province.
40:00.5
Medyo kunti ang harvest na. Hindi masyadong malaki ang mga karot.
40:05.8
Dapat maraming tubig.
40:08.1
Para maganda. Kunti yung tubig kasi.
40:11.6
Kasi mainit. Ilang araw na walang hindi umuulan. Kunti lang yung tubig na galang sa mundo.
40:22.6
The Environment Department said less water is also flowing down from the mountains due to deforestation
40:28.9
as forests are being converted to vegetable gardens.
40:32.7
The town of Tinok is known as the salad bowl of Ifugao,
40:36.5
being the largest vegetable producer in the province.
40:40.2
Data from the Municipal Agriculture Office show,
40:42.8
around 286 metric tons of highland vegetables are being harvested in the early months of the year.
40:49.7
The goods are being traded in agri-posts in Benguet and Nueva Vizcaya.
40:55.0
Due to demand, farmers expand their farms through kainin,
40:58.7
which requires cutting and burning of trees and plants to prepare land for cultivation.
41:04.4
Forest cover in Tinok has duplicated.
41:06.5
Dwindled by 1,000 hectares in 2020, compared in 2010.
41:11.4
Deforestation affects only the farm located within Garibol Basin, very near Garibol,
41:19.1
because the erosion caused by deforestation destroyed or damaged our irrigation systems.
41:25.9
Among the factors seen as a challenge in curbing deforestation in the area
41:29.9
is the number of indigenous people relying on farming.
41:33.4
Pinopromote din namin sa kanila,
41:35.4
Hindi sa natutal, hindi massive, dapat mag-iwan tayo ng mga areas for watershed.
41:43.2
Affected ang ating tubig to support our irrigation system.
41:47.0
Government agencies and stakeholders are working together to protect forest reserves
41:51.9
and prevent further deforestation in Ifugao.
41:55.7
Lady Vicencio, ABS-CBN News.
42:00.1
We're taking a quick break. We'll have more stories when we come back. Stay with us.
42:05.4
We'll be right back.
42:35.4
We'll be right back.
43:05.4
We'll be right back.
43:35.4
We'll be right back.
44:05.4
We'll be right back.
44:35.4
The spokesperson for the West Philippine Sea Commodore Roy Vincent Trinidad said
44:38.9
they have not monitored any activity in the area in the past few days.
44:43.8
Navy has increased its patrols in Sabina Shoal and for the past good number of days
44:49.2
we have had one warship stationed in the area.
44:52.7
This is to ensure that whoever is doing that, we are not sure who is doing that,
44:57.4
whoever is piling up dead corals on Sabina Shoal, we will be able to expose their activities.
45:02.8
The official said the Navy will ensure that
45:05.4
no reclamation activity will be done by foreign vessels
45:08.4
in features well within the country's sovereign rights, including Escoda Shoal.
45:13.2
We will do everything to ensure that Sabina and all other features
45:17.2
within our EEZ will remain under Philippine sovereign and sovereign rights.
45:22.5
Over the weekend, the Philippine Coast Guard reported it has discovered crushed corals
45:28.9
allegedly dumped by Chinese ships in Escoda Shoal in a supposed new reclamation attempt.
45:34.6
But China denied this, despite photos and videos from the PCG.
45:40.0
But PCG spokesperson for the West Philippine Sea Commodore J. Tarjala maintained
45:44.5
their findings were properly documented and cannot be simply dismissed as disinformation.
45:50.6
The PCG has then deployed one of its biggest ships, the BRP Teresa Magbanwa,
45:55.6
to deter any attempts at island building.
45:58.3
Meanwhile, the Department of Justice gave its assurance
46:01.4
all legal options against China are being studied.
46:04.6
This, after former Supreme Court of Senior Associate Justice Antonio Carpio called
46:09.6
for legal action against Beijing following the reported reclamation efforts in the Shoal.
46:15.2
Carpio noted that DOJ has been preparing an environmental case against China
46:19.8
following the discovery of destroyed corals in Iroquois Reef last year.
46:24.6
Solicitor General Menardo Guevara added,
46:27.2
the government is not limiting its legal options against Beijing
46:30.6
to the filing of an environmental case.
46:34.6
Madawa, ABS-CBN News.
46:39.4
Now, artificial intelligence systems as depicted in movies and television
46:43.6
are able to hold intelligent conversations with humans.
46:47.0
Now, that's closer to becoming a reality as chat GPT maker of OpenAI
46:51.6
makes the latest move to stay ahead in the race to dominate the emerging technology.
47:00.5
Nope, that's okay.
47:01.7
Could we soon be having real conversations with aliens?
47:04.6
I want to introduce you to somebody.
47:08.1
Well, hello there, cutie.
47:10.8
What's your name, little sloth ball?
47:15.2
Chat GPT maker OpenAI has released a new model called GPT-4-0
47:20.6
capable of realistic voice conversation and able to interact across text and image.
47:26.9
The hottest temperatures occur around July.
47:29.1
New audio capabilities let users speak to chat GPT
47:32.9
and obtain real-life responses.
47:36.6
They can also interrupt chat GPT while it is speaking.
47:40.8
Both of these new capabilities are hallmarks of realistic conversations
47:45.0
that AI voice assistants have found challenging up until now.
47:49.6
OpenAI researchers showed off GPT-4-0 at a livestream event.
47:54.4
So, I'm on stage right now.
47:56.0
I'm doing a live demo.
47:57.2
And frankly, I'm feeling a little bit nervous.
47:59.1
Can you help me calm my nerves a little bit?
48:01.6
Oh, you're doing a live demo right now?
48:05.9
Just take a deep breath.
48:08.2
In another demo, chat GPT used its vision and voice capabilities
48:12.0
to help a researcher solve a math equation.
48:15.4
Okay, I think it's the vision.
48:16.5
Let me try to divide both sides by three and let me see what I get.
48:20.8
Go ahead and divide both sides by three.
48:23.9
So, chat GPT, this is what I ended up with.
48:25.7
How does this look?
48:27.1
It looks perfect.
48:28.8
You've solved it.
48:33.0
How do you feel about solving linear equations?
48:34.6
Open AI's chief technology officer, Mira Murati,
48:39.6
says the new model would be offered for free.
48:42.4
She added that paid users of GPT-4.0
48:45.3
will have greater capacity limits than the free users.
48:49.1
Shortly after launching in late 2022,
48:52.0
chat GPT was called the fastest application ever
48:54.7
to reach 100 million monthly active users.
48:58.0
But Open AI faces growing competition
49:00.5
and pressure to expand the user base of chat GPT.
49:04.6
And that's it for the show.
49:10.3
I'm Stanley Palisada.
49:11.4
Thank you so much for watching.
49:12.6
You can listen to our interviews again
49:14.4
on the ANC Market Edge podcast available on Spotify.
49:17.7
You can also watch highlights, recaps,
49:20.1
and exclusive content of our shows online.
49:22.5
Subscribe to the ANC YouTube channel,
49:24.5
like us on Facebook,
49:25.4
follow us on Likes.
49:26.7
Stay safe and stay with ANC.
49:34.6
Thank you for watching.
