Quick Take: More PSE drama and 2 more market updates
MREIT [MREIT 14.46 1.1%; 51% avgVol] [link] increased the number of listed and outstanding shares after its property-for-share swap with its parent, Megaworld [MEG 2.02 0.5%; 59% avgVol], was approved by the SEC. The deal called for MREIT to issue 263,700,000 common shares to MREIT for a total value of P5.274 billion, which increased MREIT’s outstanding share base from 2,532,121,381 shares to 2,795,821,381 shares. The issuance of shares to its parent decreased MREIT’s public float from 37.51% to 33.97%.
MB Quick Take: Leaving aside how long it took for the SEC to approve this transaction (an entire year), this transaction brings MREIT very close to its legislative minimum public ownership threshold of 33.33%. It still has about P2.7 billion that it could “spend” by issuing new shares before it would need to expand its public ownership through a follow-on offering, stock rights offering, or private placement.
FMETF [FMETF 101.40 0.2%; 30% avgVol] [link] was halted -- again -- after it was discovered that its iNAV had stopped updating at 10:53 AM. Trading in FMETF was suspended at 11:30 AM, but unlike the previous four times, the ETF remained halted until the end of the day and no resolution to the problem was reported.
MB Quick Take: This is the 5th time since September that the PSE has had to step in to halt FMETF for failing to report an updated iNAV, which is the primary way that traders would use to “price” the value of FMETF shares. Why does this keep happening? For the sake of the market’s integrity, I want to pretend that it’s something super complicated, to the point where if we knew all of what goes into displaying a proper iNAV, we’d all sit back and marvel at how blessed we are that iNAV displays correctly even some of the time. But I have a sneaking suspicion that if we peeled back the curtain, we’d find some disgusting Lovecraftian system running on a Pentium 4 processor that encodes, every second, PDF screenshots of each constituent stock’s price, and then transmits those to an Excel spreadsheet on a Sharepoint instance that is running in the nether regions of some long-forgotten server. I want there to be more ETFs, but not like this. Not like this.
PhilWeb [WEB 1.92 2.1%; 78% avgVol] [link] reported FY22 net income of P27 million, up 152% from its FY21 net loss of P52 million. WEB “mainly” attributed the performance to: (1) “contributions of the additional eGames sites in 2021”, (2) “consolidation of newly acquired eBingo sites and eBingo machine providers”, and (3) “implementation of the eGames Remote Gaming Platform.”
MB Quick Take: There really isn’t much to say about this one, except that it’s rare to find an Annual Report that is so openly hostile to its readers as this one is. From a form perspective, all of the PDF text is pale and fuzzy, like an over-baked meme that’s been JPG’d to death, and the text is all slanted off to the side like the person scanning it was using a hand-fed 3-in-1 printer from 2010. No table of contents. From a content perspective, the management’s discussion of the company’s FY22 performance might as well have been: “You saw the financials, didn’t you? That’s what happened.” As a long-term investor, this is the kind of reporting that pushes me away from looking any deeper at an investment, regardless of how politically-connected its owners might be and how well-positioned the company has become.
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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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