Synergy Grid [SGP 12.32 6.81%] [link] subsidiary, National Grid Corporation of the Philippines (NGCP), was issued a “show cause” order by the Department of Energy (DoE) for NGCP’s alleged failure to contract enough ancillary services to “ensure grid security and stability”, as per DoE circulars. The DoE’s reaction comes after blackouts and brownouts frustrated consumers and businesses connected to the Luzon grid. Senator Risa Hontiveros said the DoE’s order was a good “first step” toward holding NGCP accountable for its alleged failures. NGCP has 15 days to submit a “verified explanation”.
MB Quick Take: The government is sensitive to disruptions in critical infrastructure because the stink of those failures can quickly get in the clothing of top appointees and politicians. Did the NGCP fail to contract enough firm power to supply enough power to maintain grid stability? Did power generation companies violate any rules or laws when their plants went offline, at the same time, during the period where the blackouts and brownouts occurred? SGP shareholders probably hope that whatever the NGCP has to say will satisfy the initial inquiry, and save the company the uncertainty of having government light shined all up in its business.
POGOs [link] are in hot water again, as senators, including the Senate President, have said that there’s a need to “weigh the social costs” of POGOs against the “meager income” they provide the government coffers in taxes. Some senators have said that they’re interested in drafting legislation to ban POGOs outright, and also taking it one step further to ban all online bet placing in the country.
MB Quick Take: POGOs have been a disaster from the very beginning, and have only benefited a small number of commercial property developers in the NCR. According to Bilyonaryo, Leechiu Property Consultants said that “office rental rates could drop from 55 percent to 80 percent” in the Manila Bay area. Most (all?) REITs have done what they can to back away from POGOs over the past two years as the POGO craze has died away, but Eton Properties, a subsidiary of LT Group [LTG 8.98 0.22%], just recently leaned-in and signed a massive 6,000 sqm lease with a POGO. Looks like LTG and the current administration might be heading for a clash.
First Metro Philippine Equity Exchange Traded Fund [FMETF 99.20 0.20%] [link] was halted yesterday after its intraday net asset value (iNAV) tracker stopped posting real-time updates to the PSE website. FMETF was halted at 10:15 AM. The problem was reportedly fixed by 10:30 AM, and the halt was subsequently lifted by the PSE at 10:50 AM.
MB Quick Take: What’s worse, trying to buy/sell when there are no quotes, or trying to buy/sell and using an old/dead quote to inform your decision? Trick question, they’re both pretty terrible, though at least they were able to correct the issue with the service provider quickly and get FMETF up and running again within 15 minutes and back to trading within 40 minutes. I don’t know what caused the outage, but that’s the kind of quick turnaround that I like to see to build confidence in the system’s ability to handle adversity!
Semirara Mining and Power [SCC 40.45 1.22%] [link] disclosed that Maria Cristina Gotianun was buying up more SCC, this time SCC’s President and Chief Operations Officer purchased 804,600 shares on September 16, at an average price of P41.13/share, for a total spend of P33.1 million. Ms. Gotianun’s buying spree accounted for a whopping 27% of SCC’s volume on that day.
MB Quick Take: There’s nothing wrong with Ms. Gotianun’s interest in purchasing more of her own company, I only bring it up because there’s such a vocal group of market watchers that wait for the Gotianuns, and in particular, its President, to start the insider buying spree as part of a seeming dividend harvest cycle.
Global Ferronickel [FNI 2.41 2.55%] [link] marked the maiden shipment of ore, set for China, from its affiliate, Ipilan Nickel Corporation (INC) in Palawan. The shipment is loaded with 54,700 Wet Metric Tons of medium-grade nickel ore, and FNI says that it hopes to do over 500,000 Wet Metric Tons of shipments through the rest of this year, with increased production in the coming years as INC begins year-round operations. The INC mine has a 10-year life span, and has been assessed to be able to provide an annual production of approximately 1.5 million wet metric tons.
MB Quick Take: My simple math says that INC might have some trouble meeting that 2022 target, but if I were a shareholder, I’d be pleased to see INC getting regular shipments out and building relationships with buyers. Given the mine’s capacity, it can only produce approximately 400,000 WMT of ore in the 27% of the year remaining, but if INC is able to sell all that ore and get it on boats before the end of the year, I’d consider that a big win and proof of concept for the operational stability of the mine and the income it should generate. Apollo Global Capital [APL 0.04 2.78%] be like: “write that down, write that down!”
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