Quick takes from around the market
1. Aboitiz Power [AP 37.70, down 0.3%; 18% avgVol] [link] predicted “tight market conditions” for electricity in 2024 due to “thin supply margins”, 6.6% demand growth, and insufficient transmission infrastructure. The Aboitiz Family’s energy generation company said that “finishing long-overdue transmission projects” will help “free stranded capacity like that in Mindanao and help support thin margins elsewhere in the country.”
MB quick take: This take runs counter to the one that we just heard from Ramon Ang of San Miguel [SMC 109.80, down 0.2%; 13% avgVol], who said that he doesn’t foresee “any additional electricity demand in the next three years”, and we probably won’t need any additional power generation until 2027 or 2028. Electricity consumption is closely tied to economic growth, so perhaps one could make the case that the Aboitiz Family is incentivized (due to its enmeshment with the current presidential administration) to cheerlead the potential for economic growth and thus speculate about that 6.6% electricity demand as an indirect statement about its opinion of the administration’s ability to grow the economy in 2024. Truth is that the 6.6% growth number is actually quite large, so to me the Ramon Ang take and the Aboitiz Family take cannot coexist. It is possible, though, that things might happen to curb growth (and as a result, electricity demand), but the Aboitiz Family’s prediction was made based on the same inputs that Ramon Ang had when he made his statements earlier this week.
2. Colliers Philippines (ColPH) [link] thinks that the Metro Manila commercial market will experience a 2024 improvement “in terms of office demand and net take-up.” ColPH said that they anticipate companies will begin to emerge from their “wait-and-see” pandemic approach to office space leasing, and will begin “rolling out their real estate plans that were put on hold by the pandemic.” ColPH is expecting the net take-up to reach 300,000 square meters, which is 36.4% higher than 2023.
MB quick take: REITs focused on commercial office leasing, like AREIT [AREIT 33.75, up 0.3%; 67% avgVol], MREIT [MREIT 12.52, up 0.8%; 108% avgVol], RL Commercial REIT [RCR 5.00, down
