Quick Take: Rate hike galore and 2 more market updates
Bangko Sentral ng Pilipinas (BSP) [link] raised rates by 25 basis points, matching the raise of the US Federal Reserve that was announced just a half-day prior. The BSP said that “further monetary policy action was deemed necessary to address broadening price impulses emanating from robust domestic demand and lingering supply-side constraints.” BSP Governor, Felipe Medalla, said, “Anchoring inflation is our highest priority.” He added that the banking problems from the “rich countries” would not “rich countries” will not significantly impact the Philippine banking system.
MB Quick Take: I don’t think that it’s robust domestic demand that is pushing up the prices of basic goods, unless that’s how we’ve decided to refer to the people attempting to satisfy their most basic needs, which is in itself a pretty dystopian twist. Pushing interest rates up won’t stop people from wanting to buy onions to eat, or electricity to cool their homes, or gas to drive to work. As the BSP and many others have identified several times, the problem is generally within the government’s jurisdiction to fix.
ABS-CBN [ABS 7.35 0.7%] [link] narrowed its net loss to P2.6 billion, which is 54% less than the P5.7 billion it lost in FY21. Consolidated revenues were up 8% to P19.2 billion (against a 4% growth in consolidated expenses), led by a 21% increase in advertising revenue to P6.4 billion. ABS now thinks of itself as a content-generation company.
MB Quick Take: ABS shareholders have had it tough. And yet as bad as it has been, I haven’t talked to a single investor that blames the Lopez Family or its executives for either the initial EJK of its franchise, or the company’s continued inability to turn a profit. If I were a shareholder, I’d feel as though this executive team has done just about all that it could to make lemonade out of this stupid situation’s lemons. It’s like the ABS team is still in the process of figuring out what it can rip out of the ABS aircraft to reduce its weight and allow the damaged engines to produce enough thrust and lift this battered plane off the pock-marked runway behind enemy lines.
Ovialand [OLI 5.60 pre-SEC] [link] filed its application to the SEC for a P2.2 billion IPO in late June or early July. The deal is made up of 336 million primary shares, and 60 million secondary shares. The mass market housing developer is using the IPO to raise money for land-banking and real estate pipeline development. SB Capital Investment Corp will be the sole issue manager and underwriter for the deal.
MB Quick Take: I’ve been following OLI for years, and you can read a November 2021 interview I had with OLI’s President, Pammy Olivares-Vital, where she talks in greater detail about the circumstances bringing OLI to the market. As you can see, Ms. Olivares-Vital and the OLI team have been patient, but it’s hard to get a feel exactly for “why now” as opposed to any other time over the past 18 months. They’ve had recent financial success, which is great timing for a listing, and they have a growth story that they can tell that could be appealing to investors. Still, I’m waiting to read the prospectus to get a real handle on what’s going on.
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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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