Quick takes from around the market
BSP [link] is now expected by local economists to raise rates by 50 basis points this week when the BSP meets on Thursday. The US Fed, which is the psychological leader in this fight against inflation, is expected to deliver a 75-100 basis point increase before the BSP’s meeting begins.
MB Quick Take: We’re in uncharted territory, but there are growing fears that the US Fed will raise rates too quickly and damage the economy in this fight against inflation, and also growing fears that the BSP will raise rates too slowly (again) relative to the US Fed. The Fed’s actions will strengthen the US Dollar against nearly all the world’s currencies, and failing to keep pace with the Fed will probably continue the devaluation of the peso relative to the dollar. The peso is at/near all-time historic lows already, so the stakes are very high for firms that are carrying debt in US dollars. Conversely, there are foreign-exchange opportunities for PSE firms that trade abroad and earn in US Dollars.
Makati Finance Corporation [MFIN 2.38] [link] will list the 1,455,611 shares that it distributed to shareholders (by stock dividend) this Wednesday. The shares represent only 0.5% of MFIN’s total outstanding stock.
MB Quick Take: Normally I watch these kinds of listings pretty closely for any signs of selling, but this is really just a tiny transaction that should only have a negligible impact on the market for MFIN shares. Granted, MFIN is one of the PSE’s most thinly traded non-suspended stocks, with an average daily volume of... zero? It’s hard to say what the volume is, since the last time someone bought or sold this stock was back on August 1, when 2,000 shares traded hands for a total value of around P5,000. Relative to the daily volume, the listing is massive. Will it change anything? I honestly don’t see why it would; the stock dividend is only an internal move that acts (to most shareholders) like a stock split.
Cebu Landmasters [CLI 2.42 1.22%] [link] sold P2.4 billion in condo units for its new upscale residential mixed-use project in Cebu City, selling out in just three days. The project is slated for completion in 2026.
MB Quick Take: I don’t know if there’s anything particular to the Cebu City market specifically, or to the “upscale” market generally, that we could extrapolate from this sell-out. As interest rates rise, I’m watching all sectors to get a feel for the psychological impact of the higher rates that buyers will need to accept in order to finance new purchases. At least for this project, in this region, targeted to that demographic, it appears as though the prospect of high (and higher) rates has not impeded sales. Yet.
SM Investments [SM 835.00 4.13%] [link] said, with reference to the forward-looking relevance of its malls and the worldwide downturn in mall attendance, that “despite e-commerce, brick and mortar spaces will always have a compelling value and relevance for the Filipino shopper”.
MB Quick Take: Retail in general has had a great comeback from its COVID lows, but I think SM’s analysis only holds true so long as all the other alternative sources for products remain as they were pre-pandemic. From personal experience, the second I found cheaper and better products online for delivery, that’s where I started to buy. I’m looking to avoid being stuck in traffic and waste time milling around with thousands of other people, just so that I can buy a dumb ethernet cable. No doubt people will still flock to malls to socialize, eat, and get relief from some free aircon, but don’t think that the mall operators in other countries didn’t think the same way about e-commerce before it eventually took over the retail game.
--
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.
- Latest
