Quick takes from around the market
Solar Philippines [SPNEC 1.50 0.66%] [link] stock rights offering (SRO) buyers dumped shares on the day of the SRO’s listing. After SPNEC sold over 1.1 billion SRO shares at P1.50/share, the stock opened for trading on its listing day at P1.49/share, and fell as low as P1.45/share as a healthy cohort of SRO buyers looked to exit the stock at the earliest possible time. SPNEC closed at P1.50/share, with over 136 million shares traded on the day.
MB Quick Take: As I mentioned yesterday, a “normal” trading day for SPNEC is somewhere between 30 and 75 million in trading volume, so that 136 million in volume was definitely much higher than normal, and to me, indicates that there was a sizeable group of SRO buyers that were simply looking to scalp the SRO discount. Everyone buys for a different reason, and yesterday’s trading is just one data-point, so let’s keep watching the trading volumes (and SPNEC price fluctuations) to get a better idea about how resolute those SRO buyers were. SPNEC considered the SRO sell-out to indicate broad support for its sudden pivot; yesterday’s trading doesn’t necessarily contradict that, but if the selling pressure continues, it might become easier to make counter-arguments.
The Keepers [KEEPR 1.23] [link] signed agreements to acquire a 50% stake in Bodegas Williams & Humbert SA (BWH), the Spanish company that manufactures and distributes the “Alfonso” brand of brandy, which is KEEPR’s top trading product. KEEPR paid 88.75 million euros (~P5.1 billion) for the stake. KEEPR is excited about the purchase because it says this takes the company from being a one-dimensional trading firm to something that has the capability to manufacture and distribute. The company says that the acquisition will be “bottom line accretive” as it will benefit from its share of BWH’s future net income.
MB Quick Take: I understand the growth potential of the acquisition, but this has always struck me as more of a defensive move. By making this purchase, KEEPR solidifies the supply of the product that dominates its business. Buying a stake in the supplier of this product is a shrewd move by Lucio Co to manage risk. KEEPR was suspended by the PSE under the Substantial Acquisition Rule, and will not resume active trading until KEEPR provides a comprehensive disclosure of the transaction.
Bangko Sentral ng Pilipinas (BSP) [link] is considered by the Asian Development Bank to be the “most aggressive” central bank in the SE Asian region, in terms of its recent interest rate hikes. BSP has increased the interest rate by 175 basis points since May.
MB Quick Take: The BSP might have a rep for being aggressive now, but it’s largely earned that through its desperate attempts to change course and catch up with the rest of the world. It’s been a relatively quick transformation for the BSP, from ex-Governor Benjamin Diokno’s defiance at any hint that the BSP could be following the US Fed’s lead in the first part of the year, to Governor Felipe Medalla’s explicit signaling that he will use the US Fed’s approach as a direct guide for the BSP’s coming rate hikes. In terms of where this could be going, US markets seem to be predicting a peak of at least another 190 basis points of rate increases sometime next year, taking the Fed fund rate from the current range of 2.50% to around 4.4%. The BSP’s current key interest rate is set at 3.75%.
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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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