Happy Tuesday, Barkada --
The PSE lost 34 points to 6591 ▼0.5%
Thank you to /@churchbuilder for recommending MB as a way to track REITs, to Leandro Romero for guiding me to some videos on the MidCap and DivY PSE index criteria, to Gerald de Belen for
additional context on those criteria and how they're used by the PSE, to kalelManila.eth and Deborah Dorcas for alerting me to a
hilarious "fat finger" Twitter headline (it happens to the best of us), to Atot, Jing, Just'n, and J for the chonky bear meme appreciation, and to the readers who sent me private messages to help me with this upcoming Twitter/Facebook contest!
Thank you all for making the MB experience so rich and full!
- AyalaLand Logistics fat-fingers up 35%
- Apollo Global's only boat got a little typhooned
- BDO Q2 profit up 53% y/y to P18.7-B
▌Main stories covered:
- [NEWS] AyalaLand Logistics surged 35% after getting cut from MidCap index... AyalaLand Logistics [ALLHC 3.04 ▲35.1%; 488% avgVol], the industrial lot sales arm of Ayala Land [ALI 27.40 ▼0.4%; 79% avgVol], saw its stock price surge 35% suddenly in the final moments of trading yesterday. After trading in a fairly tight range of ₱2.20 to ₱2.26 for the past three days, ALLHC suddenly shot up to ₱3.04 with a massive 4.5 million shares traded. Earlier in the week, the PSE had announced that it would remove ALLHC from its MidCap index, with that announcement taking effect on August 7.
- MB: Lots of people online speculated that this was a “fat finger” incident, which is the fun name that traders give to stock trade execution errors that gain headlines and etch themselves into the collective trading consciousness. Usually these errors are a factor of 10 problem, where a trader intends to buy 1,000 shares but enters 10,000 by mistake, or where a trader wants to get some shares at ₱1.50/share but instead buys a batch for ₱15.00/share. These errors are (surprisingly) rare, but they happen. The last one that I remember covering was the 2019 trade that smashed Cebu Pacific [CEB 37.50 ▲1.5%; 75% avgVol] shares from ₱92.65/share to ₱58.00/share in the final moments of the trading day. The interesting thing about that fat finger was that the price didn’t immediately recover to the previous level; it bounced back the next day to ₱87/share, but that was still 6% lower than the pre-fat finger price. It’s going to be fun to see what happens to the price today.
- [NEWS] Apollo Global’s boat damaged by Typhoon Egay... Apollo Global Capital [APL 0.02 ▼12.5%; 639% avgVol] said that its only offshore mining vessel, the MB Siphon 1, was damaged by “very rough” seas which caused some of the vessel’s anchor wires to fail. APL also said that its chartered tug boat ran aground “due to huge waves and swells”. The company will assess the damage and conduct the repairs by “working double time to return to offshore mining site for operations.” APL referred to Typhoon Egay as a “fortuitous event” that will require “an adjustment” to APL’s export schedule for FY23.
- MB: I feel like “storm avoidance” should be APL’s primary competency with this endeavor. This isn’t the first time that the MB Siphon 1 has had a misadventure with a storm, but it is the first time that it’s had this experience while actually doing real commercial work. APL and the MB Siphon 1 have been “in position” to begin commercial operations since Q1/21, and I hope it’s just a case of incredibly bad luck (weird use of “fortuitous”) that has caused the ship to go back into the Injured Reserve. Unfortunately for APL (and for APL investors), they don’t have a deep bench. Or a bench at all. That’s their only boat.
- [Q2] BDO Q2 profit ▲53% y/y... BDO [BDO 145.10 ▼1.3%; 79% avgVol] reported a Q2/23 profit of ₱18.7 billion, up 53% from a Q2/22 profit of ₱12.3 billion, and up 13% from Q1/23 profit of ₱16.5 billion. BDO attributed this robust result to “broad-based growth across its core businesses”.
- MB: There isn’t much to say about what the banks that hasn’t been already said, and by those with a better feel for the banking industry than I have. As an outsider, though, it’s hard to miss how wildly profitable our major banks have become, and it’s getting increasingly difficult for me to stomach anything that I hear from the BSP about having to “bribe” banks with more liquidity to reduce transfer fees that disproportionately impact those with the lowest incomes. We hear banks and the government talk a lot about increasing the participation rate of the Philippine population in our banking system (“banking the unbanked”), and yet we watch BDO, BPI, and MBT print record profit after record profit and we fail to see the opportunity that is staring us in the face. The COVID nightmare was hard on banks, but it showed how well protected are largest banks are by the BSP (which is the taxpayer’s representative); perhaps in return for that downside support, the universal banks could provide free small-value transactions? And not like free as in “between your main branch and one designated ally bank between the hours of 4:30PM and 5:15PM on every third Thursday of alternating months”, but like free, as in: free. But like I said, I’m not a banking analyst. I just know a ton of people who do not bank at all because the fees they get charged for transfers eat up a huge chunk of the money that they need to put food on the table. I don’t mean this to be a “banks are bad” kind of post. The success of our banking sector is a great measure of the strength of our economy. The transaction fee thing just gets me sometimes.
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