PH an outlier in AsPac

PHL an outlier in slowing Asia-Pacific M&A  market

Arra B. Francia
BusinessWorld
04 July 2019

THE PHILIPPINES was the fastest-growing market in the Asia- Pacific (APAC) region ex-Japan in terms of mergers and acquisitions (M&A) last semester, driven by the consolidation of one of the country’s largest cement players.

In its Global & Regional M&A Report for the first half of 2019, media firm Mergermarket revealed that the value of M&A deals in the country soared by 398.2% or $2.2 billion during the period.

This was primarily driven by conglomerate San Miguel Corp. (SMC)’s acquisition of an 85.7% stake in Holcim Philippines, Inc. from LafargeHolcim Ltd.

“The surge in the Philippines was largely driven by the flagship ‘Build, Build, Build’ campaign of President Rodrigo Duterte, which is spurring consolidation among cement players,” Mergermarket said in its report.

Holcim Philippines disclosed in May that SMC has agreed to acquire 85.7% of the firm for $2.15 billion, making it the biggest M&A deal in the local cement industry. The sale of LafargeHolcim’s Philippine assets is part of its rationalization program to exit from the “hyper competitive arena in Southeast Asia.”

The Philippines defied the slowdown seen in the region as well as in individual markets. Mergermarket noted that dealmaking “slowed down to levels unseen since 2013,” attributing the decline to the escalating trade war between the United States and China.

APAC ex-Japan tallied 1,525 deals last semester worth $241 billion, resulting in a drop in global market share to 13.4% from 18.6% in the same period last year.

China and Hong Kong accounted for more than half of the region’s total deal value, although deals from the former dropped by 44.7% year on year.

Deals in Hong Kong meanwhile dipped by 11.1%.

India followed as the largest M&A market, despite also posting a 52.8% decrease to $33.5 billion.

Southeast Asia showed a more favorable performance in the same period, with Singapore increasing by 154% to $17.1 billion for the period. Indonesia picked up by 88.6% to $6.6 billion, while Malaysia jumped by 16.4% to $3.7 billion.

In terms of sector, consumer-related transactions booked a 7.6% increase to $23.2 billion from 144 deals. The technology sector dropped by 66% to $22.9 billion, “as the tech war between the US and China is threatening to disrupt the supply chain and create a digital iron curtain between countries using US technologies and those who adopt Chinese ones.”

Meanwhile, Mergermarket also said that private equity (PE) buyouts appear “bleak and is expected to worsen in the near future.” PE buyouts amounted to $28.8 billion in the first half, 57% down from last year’s $67.1 billion. PE exits were also weak at $28.25 billion, 62% lower than last year’s $73.4 billion. — Arra B. Francia

PH's Asia-Pacific Top Universities

UP, DLSU among top universities in Asia Pacific 

CNN Philippines| 21February 2019

Metro Manila —  Two Philippine universities were included among the top educational institutions in the Asia-Pacific region, according to London-based data provider Times Higher Education (THE).

Results published on Wednesday showed that the University of the Philippines (UP) and the De La Salle University (DLSU) were in the top 300 schools of the region.

UP was at 101st-110th bracket, an improvement from its 2018 ranking of 151-160.

DLSU joined the list at the 201st-250th bracket. The Taft-based institution was unranked last year.

China's Tsinghua University rose to the top spot from its second place in 2018. It displaced the National University of Singapore which dropped to No. 2.

The University of Melbourne came in third.

The Hong Kong University of Science and Technology and the University of Hong Kong were in fourth and fifth spots.

Japan listed the most number of schools in the rankings, with 103 of its universities featured.

The Asia-Pacific University Rankings analyzed universities across East Asia, Southeast Asia, and Oceania. The featured schools represented 13 countries.

UP and DLSU were also the only Philippine universities in the Emerging Economies for 2019 of the same data provider.

Second Fastest Emerging Market

Oxford Economics: PH will be 2nd fastest 

growing emerging market in 2019-2028



Ben O. de Vera
Inquirer.net
20 February 2019

MANILA, Philippines — With an expanding labor force, the Philippines will be eclipsed only by India among emerging markets (EMs) expected to post the fastest economic growth in the next 10 years.

In a February 15 report, UK-based Oxford Economics projected the Philippines’ gross domestic product (GDP) to grow by an average of 5.3 percent between 2019 and 2028, only outpaced by India’s 6.5 percent.

For 2019, Oxford Economics had said its expects the Philippines’ GDP growth at 6.1 percent, below the government’s 7-8 percent target range.

China and Indonesia’s economies were both seen expanding by 5.1 percent during the 10-year period; Malaysia, 3.8 percent; Turkey, 3 percent; Thailand, 2.9 percent; Chile, 2.6 percent; Poland, 2.5 percent; and South Africa, 2.3 percent.

The labor force in the Philippines was projected to increase by an average of 2.3 percent during the next 10 years, the fastest among the 10 emerging markets.

The labor force growth figure was computed by Oxford Economics as the number of people in the labor force multiplied to the average number of hours worked.

Total factor productivity growth was seen at 1 percent, while capital deepening or the contribution of capital accumulation to labor productivity growth was projected to rise by 1.6 percent from 2019 and 2028.

In a report titled “Sustained growth in EMs calls for thrift and innovation,” Oxford Economics said that while “countries with higher gross domestic saving (as a share of GDP) tend to have higher trend growth… the Philippines seems to be a major outlier, but its domestic savings are supplemented heavily by remittances.” /kga

Bloomberg's Top Emerging Markets

Malaysia remains on top of emerging markets list

The Star Online

28 November 2018

Four of the top six economies on the scorecard are from Asia, including China, the Philippines and Thailand.

Malaysia remained at the top of the emerging-market list, thanks to its current-account surplus, relatively stable economic growth outlook and valuations.

KUALA LUMPUR: Malaysia remained at the top of the emerging-market list, thanks to its current-account surplus, relatively stable economic growth outlook and valuations.

According to a Bloomberg analysis on Wednesday, data last week showed inflation came in at 0.6% in October from a year earlier, compared with its 10-year government bond yield of about 4.17%.

The scorecard includes metrics ranging from growth prospects to the state of the current account, sovereign credit ratings and stock and bond valuations.

Bloomberg reported Asia’s economies have stronger buffers against headwinds like Federal Reserve policy tightening and outshone the rest of the emerging markets, Malaysia holding on to the No. 1 spot.

However, Turkey has tumbled to bottom of the pile. Ranked fifth out of 21 nations in a similar study six months ago.

Turkey’s economy is forecast to grow 0.8% in 2019, down from an estimated 3.5% this year, according to a Bloomberg survey of economists. Inflation reached 25.2% in October, the highest level since 2003, eroding real yields

Four of the top six economies on the scorecard are from Asia, including China, the Philippines and Thailand.

China and Thailand are drawing support from current-account surpluses, relatively strong growth and benign inflation. The Philippines’ current-account deficit and high inflation rates are partly
offset by growth of more than 6%.

“A closer attention is now paid to economic growth outlooks of each emerging economy amid successive rate hikes,” said Tsutomu Soma, general manager of the investment trust and fixed-income department at SBI Securities Co. in Tokyo.

“Investors are also deciphering how each country is impacted by the U.S.-China trade frictions. They will continue to be more selective with their investments given such circumstances.”

Selected economies are either in the MSCI Emerging Markets Index or a Bloomberg Barclays measure tracking EM local-currency government bonds.

Valuations are computed based on real yields, price-to-earnings ratios for MSCI’s equity gauges and real effective exchange rates.

The numbers are Z-scores that measure deviations from the average of the economies covered in the case of GDP, current-account balances, ratings and real yields. The Z-scores for real effective exchange rates and P/E are based on historical comparisons.

For reserves, the economies that sufficiently meet the International Monetary Fund’s adequacy ratio get a zero score and those that fall short receive minus 1.

GDP growth and current account balances are from economist forecasts for 2018 and 2019 compiled by Bloomberg. Sovereign ratings are from S&P Global Ratings. Real effective exchange
rates are based on JPMorgan Chase & Co. data. - Bloomberg