Quick Take: "Insider trading" galore? and 2 more market updates
Cemex [CHP 1.17 0.9%] [link] FY22 net income fell 237% to a net loss of P1 billion, which CHP attributed to “lower operating EBITDA and foreign exchange losses”. CHP’s operating EBITDA was 26% lower y/y due to higher costs of inputs (materials and energy) and lower volume (which CHP blamed on inflation/rates). CHP’s forex losses were P0.9 billion for the full year, and are due to the movement in value of the Philippine Peso relative to the US Dollar. All of CHP’s forex losses are unrealized.
MB Quick Take: This is basically like a DITO [DITO 3.27 0.6%] result; the underlying business is losing money, AND the financials were exposed to significant exchange rate risks that punished the company as the Philippine Peso devalued. “Unrealized” forex losses here just means that, based on a computation using an updated PHP/USD exchange rate, CHP expects to “lose” P0.9 billion when it pays its bills (debt, suppliers, etc) due to the slide in the Peso’s value.
Keppel Philippines [KEP 2.80] [link] disclosed that Ng Kwang Keng Samuel Henry, its President, CEO, and Chairman, has resigned to pursue a “new corporate assignment” within the Singapore-based Keppel Corporation’s group of companies. The KEP board elected Tan Kuang Liang to President and Chairman to serve the remainder of Mr. Ng Kwang Keng Samuel Henry’ term.
MB Quick Take: KEP is one of those “barely-traded” stocks with a tiny public float that lurches up and down on super-low volume. It has land holdings in Batangas and Subic for its shipyard interests, and that weird tall trapezoid building on Buendia Ave in Makati.
PSE [PSE 183.00] [link] is investigating allegations of insider trading in relation to suspicious market activity before PLDT [TEL 1,326.00] disclosed its capex budget overruns in late December. The Capital Markets Integrity Corp. (CMIC), a subsidiary of the PSE, is conducting the investigation, which has focused on “about three” foreign brokers, according to the PSE’s President, Ramon Monzon. The three foreign brokerages sold a “substantial” number of TEL shares during the period under review. CMIC hopes to have all of the records from the brokers in question sometime this week, with the results of its investigation available by the end of February.
MB Quick Take: I’m excited for CMIC to investigate any (credible) allegations of insider trading, since the growing frequency of these suspicious trading events helps reinforce the public’s perception that the market is “rigged” against the public and unfair. I’m a little concerned that the PSE/CMIC appears to be loud only about the investigation of “foreign” brokerages, but if this helps normalize the CMIC’s proper regulation of the market enough to allow the CMIC to investigate local brokerages that may have been involved in suspicious pumps in Figaro [FCG 0.87 12.1%], Metro Pacific [MPI 4.55 3.4%], and Axelum [AXLM 3.11 4.9%], amongst others, then I cheer it as a positive step forward. The market regulators need to step up their game to even meet us where we are now, at 1.7 million participants. What happens when the gates are pushed open by millions of GCash investors as early as next month? We are overdue for a thorough cleaning.
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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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