According to its quarterly Disbursement of Proceeds and Progress report, CTS Global [CTS 0.71, down 4.0%; 5% avgVol] [link] has over P780 million in undisbursed proceeds from its April 2022 IPO that raised P1.375 billion. The company has not disbursed a material amount of its IPO proceeds since its January 2023 progress report. The stock is down 7.5% over the past year, down 1.3% year-to-date, and down 26% from its IPO price of P1.00/share. It declared P0.00264/share in regular and special dividends this year out of its FY23 unrestricted retained earnings, at a yield of 0.4% at CTS’s market price at the time of the declaration. The stock is up 23% since the middle of June.
MB bottom-line: Is CTS still just sitting in government bonds to wait out the volatility of these tough markets, or is it putting the money given to it by IPO buyers to use and trading the PSE and international markets? All we know for sure is that it still has more than 56% of the money that it took from investors just sitting there in low-yield government bonds. Technically, that’s trading. It’s not the kind of trading that CTS used to sell its IPO, but in a world with rapid interest rate changes, playing government bonds is at least a strategy. But when will CTS ever pivot away from this strategy? They’ve missed the entirety of the magical DOW bull run, the early stages of the PSEi bull run, and they seem to have missed the commodities bull run in gold and other precious metals. If I were a shareholder, I’d be screaming for some direction and guidance from the management team.
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