full image - Repost: SPNEC SRO sold out in 2nd round (F:Sep9) (from Reddit.com, SPNEC SRO sold out in 2nd round (F:Sep9))
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Happy Friday, Barkada --The PSE gained 40 points to 6594 ▲0.6%Big thank you to nivrinaj and Elmer Zabala for using the MB Referral Hub (available to newsletter subscribers) to send MB to friends and family. It's heartwarming to me when the MB community grows through word-of-mouth and recommendations like this. Thank you again, nivrinaj and Elmer Zabala!Shout-outs to Bulo Sehi for tweeting my REIT Tracker stats at the PSE (haha! I'm sure they're tired of me by now), to Genesis Umali for the appreciation, to @RicoLocsin for picking up what I was putting down about the Yao Family using MACAY to offload RC Global's considerable US debt, and to /u/rkscapul for the feedback on yesterday's meme using a Wendigoon screencap!Shout-outs to Stephen Chiong, Evolves Capital, Inc., LanAustria, Stocks Philippines, Joe Gambiste, leaf, Jonathan Burac, Just’n, Palaboy Trader, Lance Nazal, Chip Sillesa, arkitrader, Bien EC, Rolex Jodieres, @RicoLocsin, and Jing for the retweets, and to Evolves.co and Mike Ting for the FB shares!▌In today's MB:Solar Philippines ends SRO with full take-up of sharesOmico and Sta. Lucia Land canceled 2005 real estate MOAPLUS: Quick takes on MONDE, BDO, and the Philippine Peso▌Daily meme | Subscribe (it's free) | Today's email▌Top 3 MB indices: Fast Food ▲1.29% Crony ▲1.00% Cement ▲0.97% ▌Bottom 3 MB indices: Hedgy Metal ▼0.61% REITs ▼0.63% Logistics ▲0.13% ▌Main stories covered:[NEWS] Solar Philippines ends SRO offer period with full take-up of shares... Solar Philippines [SPNEC 1.56 ▲0.65%] [link] disclosed yesterday that all of the 1,875,649,995 SRO shares, worth ₱2.8 billion based on the ₱1.50/share price, were sold to SPNEC shareholders in the first and second rounds of the stock rights offering (SRO). The full take-up of shares spared SPNEC’s parent company from having to exercise its undertaking to purchase leftover shares. SRO buyers will receive the shares in their accounts on the morning of September 15th, when the shares will be listed and available for trading on the PSE. When that happens, SPNEC will have 10 billion shares outstanding.MB: While the justifications for this SRO have shifted over the months since the company’s IPO, there is some newsworthiness to how willing SPNEC shareholders were to defend their positions by snatching up additional shares. SPNEC’s share price hovered around ₱1.66/share during the offer period, making the SRO offer price of ₱1.50 about a 10% discount. The market price has steadily melted since the close of the offer, with the shares closing yesterday at ₱1.55/share, and the SRO then representing only a 3% discount from the market price. What will the market price be on September 15th, when the shares are eventually listed? It’s going to be interesting to watch the volumes on that day and those that follow to get a better sense of the conviction of the SRO buyers. Are they in it for the long haul, or just for a quick flip?[NEWS] Omico and Sta. Lucia Land canceled a 13-year-old agreement to develop Pangasinan properties... Omico Corporation [OM 0.34 ▲3.03%] [link] and Sta. Lucia Land [SLI 3.14 unch] mutually agreed to cancel/terminate/revoke the memorandum of agreement (MOA) that the two parties signed back in 2005 to develop 23 hectares of OM’s land in Urdaneta, Pangasinan. Under the agreement, a subsidiary of SLI would develop the land into saleable lots, with SLI keeping 55% of the lots, and the rest going to OM. The press release says that the decision to cancel the agreement will allow both parties to “focus on their skills and resources on their respective real estate projects”. OM said that this is an “opportune time to enhance Omico’s capability to develop its real properties on its own”.MB: Just another example of why I don’t put a great deal of weight on things like memoranda of understanding and memoranda of agreement. These things are best thought of as high-level statements of what eventually could form a binding contract or agreement, but without the teeth/enforceability of an actual binding contract to compel compliance or performance with those statements. It’s the corporate equivalent of running into a distant friend, having a brief chat, and then agreeing emphatically to “totally get together sometime next month when things settle down”. Will you actually make plans with that person and do what you said? Who knows! There’s nothing that holds you to your word, because it was all just planning small talk. I’m interested to see what OM plans to do on its own, as that’s a huge plot of land in a strategic location to serve the growing needs of Northern Luzon.[NOTES] Quick takes from around the market...Monde Nissin [MONDE 16.12 ▲1.38%] [link] was charged ₱4.5 million by the Laguna Lake Development Authority (LLDA) for liquid waste levels that breached certain parameters, as measured between May 4, 2017 to July 24, 2018. MONDE notes that the problem was found to have been corrected by August 6, 2018, when the LLDA conducted a follow-up and found MONDE to have passed the “relevant effluent standards”. MB Quick Take: Two things: first, it’s hilarious for the LLDA to issue the fine over 4 years since it affirmed the problem to have been corrected; and second, the fine is relatively small and the resolution of the problem doesn’t have any (that I know of) impact on the company’s current operations. All of this was from The Before Times. I only bring it up because I saw some comments in forums raising questions about MONDE’s seeming difficulties with following regulations, but this is something that happened a long time ago and that was corrected. It’s not MONDE’s fault that the LLDA operates with a 126,227,704,000 millisecond ping.BDO [BDO 125.00 ▲0.64%] [link] said that it would continue its policy of not financing any new coal-fired power plant projects, as part of its support of the country’s “ambitious goal” to reduce its avoidable greenhouse gas emissions by 75% by 2030, and as part of its own goal to reduce its own coal exposure by 50% by 2033. MB Quick Take: I feel like I’m missing something, because I thought the Department of Energy already announced a moratorium on new coal-fired power plants over two years ago. Not doing something illegal isn’t such a big flex. BDO said that it doesn’t consider working capital loans to existing coal power plants as “coal exposure”, if those loans are used to help transition “out of the coal business.”Philippine Peso [link] closed at a record low versus the US Dollar for the 5th straight day, at ₱57.18/USD. MB Quick Take: The general sentiment here is that there isn’t much that can stand in the way of the US Dollar right now. It’s a wrecking ball. The companies that are most exposed to the weakening peso are those that earn income in pesos, but hold debt that is payable in US Dollars. A high profile example of this would be DITO CME [DITO 3.60 ▲0.28%], which held US $1.16 billion in debt at the end of June of this year. At that time, when it took ₱55.11 pesos to buy one US Dollar, that debt was worth $1.16 billion (₱63.9 billion). Now, with it taking ₱57.18 to buy one US Dollar, that debt is worth $1.16 billion (₱66.3 billion). That’s an increase of ₱2.4 billion in just two months. If the exchange rate were to reach ₱60/$1, as some say will eventually happen in this cycle, that would push the peso-denominated value of that DITO debt up to ₱70 billion. That’s a big problem for any company, but even more so for a company like DITO that generates such huge quarterly losses as it continues to grow its network and try to get its telco off the ground.MB is written and distributed every trading day. The newsletter is 100% free and I never upsell you to some "iNnEr cIrClE" of paid-membership perks. Everyone gets the same! Join the barkada by signing up for the newsletter, or follow me on Twitter. You can also read my daily Morning Halo-halo content on Philstar.com in the Stock Commentary section, and in the Saturday edition of the Daily Manila Shimbun.Subscribe hereRead today's full newsletter here
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