Quick Take: Ayala Corp's cold storage plans and 2 more market updates
Ayala Corp [AC 656.00 1.65%] [link] was in the news talking about its interest in acquiring a cold storage company, and this lines up with its rumored interest in the purchase of Glacier Megafridge, a 2nd-tier private cold storage company. The acquisition is supposedly being made by AC’s internal logistics unit, AC Logistics Holdings (ACLH), which is a wholly-owned subsidiary of AC. The deal does not appear to involve AyalaLand Logistics Holdings [ALLHC 3.22], the Zobel Family’s publicly-listed “logistics” company.
MB Quick Take: ALLHC’s Q3 teaser showed how profitable cold storages can be. There’s a ton of interest in this space, but as I’ve written about several times, the oligarchs are on the outside looking in. The biggest names in cold storage logistics are all private, non-public, and profitable. Glacier Megafridge is not one of those big names, but it’s a reasonable addition to any cold storage portfolio. I’d almost rather see ACLH buy the cold storage properties out of ALLHC, then bundle Glacier into that pack and then make THAT offering into a company that I can invest in directly without having to take on all of AC’s other baggage. I’d say to wrap it all up into a REIT, but REIT valuations have been decimated and are still in the cross-hairs for more pain.
Fruitas [FRUIT 1.00 1.96%] [link] board voted to shuffle the allocation of IPO proceeds slightly to increase the amount of capital that would be put toward “Acquisition opportunities and introduction of new concepts” from P135 million to P154 million. The increase was cobbled together from unused portions of a land acquisitions tranche, the offer expenses tranche, and the tranche that was originally allocated to the expansion of the commissary.
MB Quick Take: You know how I feel about boards and their ability to reallocate IPO proceeds. I don’t like it. I want the PSE to change the rules to require minority shareholder approval for any changes. Part of the reason for this is that we get so little information on what is being done. If I were a FRUIT shareholder, I’d want FRUIT to make the case for why it makes sense to divert money away from the commissary. Is the commissary going to cost less than anticipated? Did FRUIT just decide to limit its size? What kind of things will FRUIT buy or create with this money? This is wild like when Solar Philippines [SPNEC 1.19] basically ripped up its prospectus in the first few months of its life, but it is an issue that I think the PSE needs to look at. I’m not saying FRUIT did anything wrong here. According to the rules, FRUIT appears to have done everything properly. But I think the rules do too little to protect the interests of the minority shareholders that make the PSE’s dreams of a massive and thriving IPO market possible.
Bangko Sentral ng Pilipinas (BSP) [link] projects October inflation to fall between 7.1% to 7.9%, up from September’s actual inflation rate of 6.9%. The BSP said that inflationary pressures will come from transpo fare hikes, rising oil prices, rising commodity prices due to storms, and the continued devaluation of the peso.
MB Quick Take: Sounds like the BSP and Asian Development Bank (ADB) are in disagreement about the potential for storms to cause us inflationary problems. Remember when ADB declined to adjust its inflationary forecast for the rest of the year after Karding, and how I said that whatever was in the ADB report should be considered a best-case scenario because of this? Well, it looks like we’re no longer dealing with the best-case. I don’t know why ADB didn’t want to re-do their work to account for actual changes on the ground, but the “ground” doesn’t care too much about what the old report said. Costs are going up, and the BSP thinks that the storms will impact the affordability of food. It’s not under control yet.
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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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