Quick takes from around the market
International Container [ICT 187.20 1.47%] [link] to sell its entire interest in Davao del Norte port for P325 million. ICT says that “the expected market for [the port] did not materialize”. ICT will sell its interest to Hijo Resources Corp (HRC). ICT received P95 million as an initial cash payment from HRC, with the balance due in tranches / installments over the next two years.
MB Quick Take: I don’t have a lot of insight into Enrique Razon or his port operations, but this looks like a “win” for ICT in terms of converting an under-performing asset into cash that it can use for almost anything else. As a shareholder, these “optimization” moves are greatly appreciated.
Alternergy [ALTER 1.48 pre-SEC] [link] is reportedly “all systems GO” for a November IPO, according to ABS-CBN’s Michelle Krystle Ong. The alternative energy company was formed by former Department of Energy Secretary Vicente Perez, and has been operating as a green energy producer since 2008. ALTER is looking to raise P2.2 billion in a deal that consists of 87% primary shares.
MB Quick Take: I love the spirit, but it would be a nightmare if the company was anything other than “all systems go” for an IPO process that it started only a couple of months ago. While the preliminary prospectus listed November 25th as a target listing date for the IPO (based on receipt of pre-effective clearance to conduct an IPO from the SEC on October 4), the dates listed there are really just placeholders. The SEC’s decision on whether to permit the offering to go ahead doesn’t really take the dates given by the company into consideration, and even after the SEC approves, there’s still the matter of getting the PSE to put the deal on the schedule. ALTER will go on the schedule when it’s approved by the PSE, because before then, the dates are all just preferences.
Raslag [ASLAG 2.10 6.25%] [link] buy-back boys keep the buy-back party going with another huge round of buying on Monday. T.G.N. Realty Corporation (TGN), an affiliate company owned by ASLAG’s Chairman and one of its directors, purchased 1 million shares on the 12th, which was about 12% of the volume on that day.
MB Quick Takes: Just following the story, paying one eye’s worth of attention to what the BBBs (buy-back boys) are doing. I haven’t spent any real time with the data to get a feel for how impactful TGN’s purchases have been, but the ownership group has acquired millions of shares since the IPO, and that’s got to have a positive impact by soaking up low-hanging asks.
Megaworld [MEG 2.41 2.03%] [link] to host another Landers Superstore location in Bacolod City township development, The Upper East. MEG has signed Landers to leases at four other MEG township locations.
MB Quick Take: These kinds of anchor tenants are really important to the financial health of a project. For developers like MEG, who do not have a dominant, in-house grocery brand, there’s always a little uncertainty in terms of who can or will take the space, and at what rate. At least for developers like the Villars, they know that they could always cause AllHome [HOME 3.81 0.53%] or AllDay Marts [ALLDY 0.33 unch] to swoop in and sign friendly lease deals to prop up new developments. Same for DoubleDragon [DD 7.35 0.14%] through its sister company, MerryMart [MM 1.33 1.48%]. The lack of an in-house, mid-market brand doesn’t appear to have slowed MEG, but it is an added complication.
PwC MAP 2022 CEO Survey [link] showed that 87% of the 119 Philippine CEOs were “confident” that their company would “experience revenue growth in the next 12 months”, but 52% said that full recovery from COVID-19 would probably take more than two years.
MB Quick Take: When asked about what is likely to cause a recovery delay, you’d think those CEOs would mention something about inflation challenges, maybe some hot takes about the rising cost of capital, but no. The #1 complaint is corruption. 67% of CEOs said that corruption is what would cause the recovery delay. The CEOs surveyed said that the top 3 priorities for the incoming administration to help the business community would be government accountability/transparency, fighting corruption, and attracting more foreign investments.
Philippine Telegraph and Telephone [PTT susp] [link] board voted to remove restriction against foreign ownership of shares, and to increase its authorized capital stock from P11.8 billion to P16.4 billion, split between various classes of shares, with the largest being the “Class A” serial redeemable preferred stocks at P7.4 billion.
MB Quick Take: This is a stock that hasn’t traded in over 12 years. There are a lot of fantastic rumors that swirl about this company, which has many legacy contacts and potentially-powerful backers, but the fact is that it’s been a complete non-factor for so long that the vast majority of PSE traders have never seen PTT in active trading.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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