Happy Wednesday, Barkada --
The PSE gained 232 points (!!) to 6674 ▲3.6%
Thank you to the 20 readers that filled out the
PREIT Allocation Poll. All entries (that provide an email address) will be entered for the chance to win a P500 Grab Food voucher on the day of the IPO.
Thanks also to John, Jing, and Rolex, for the meme appreciation (soft spot for HTP Harold?), to @frustratedDoe and /@hatterasmom3 for spotting my totally intentional use of the word "trachea" in place of "tranche" when discussing PREIT's IPO subscriptions, and to /@quietkate for the general appreciation of MB's consistency and information. Thanks all!
Shout-outs to Miguel R. Camus, onej, Just’n, Stephen Chiong, Evolves Capital, Inc., I Dissent!!!!, Dividend Pinoy | PGG, Rolex Jodieres, Palaboy Trader, Lance Nazal, leaf, arkitrader, Singapore Airlines Boarding Music 2021 is, CubicTrade, LanAustria, Albert Bigornia, Chip Sillesa, and Jing for the retweets, and to Padilla GJ, Evolves.co, and Mike Ting for the FB shares!
- PH: Inflation for November was up 8% (yikes)
- PREIT can "neither confirm nor deny" its fully-subscribed status
- PHA files estafa case against Marvin Dela Cruz
- Apex Mining spends $81.5-M on huge trove of copper interests
▌Main stories covered:
- [NEWS] Inflation for November was up 8% y/y... The Philippine Statistics Authority (PSA) [link] revealed that November inflation was 8%, which was even hotter than October’s 7.7% (which was a 14-year high). The 8% inflation rate was in the middle of the prediction range provided by the government (7.8% to 8.2%) back in October. The PSA said that the higher inflation was due mostly to the price growth of food and non-alcoholic beverages. The price of vegetables, tubers, plantains, and cooking bananas grew by an incredible 25.8%. The PSA puts the blame for this month’s result on the “spillover effect” from Severe Tropical Storm Paeng, which struck in October and caused ₱2.86 billion worth of damage to the agricultural sector, including damage to critical components of our country’s agricultural infrastructure (crop protection centers, warehouses, production facilities; and irrigation systems).
- MB: This result takes the rate increase question out of the BSP’s hands. Just a few days ago, BSP Governor Felipe Medalla had been publicly talking about how things might be good enough to raise rates by only 25 basis points. Well, things aren’t good, so I think it’s safe to assume that the 25 bp raise is completely off the table unless something incredible happens globally over the next week. Otherwise, expect at least a 50 bp raise when the BSP meets next Thursday after the US Federal Reserve decides on its interest rate increase.
- [NOTES] Quick takes from around the market...
- **Premiere Island REIT [PREIT 1.50 pre-IPO] [link] disclosed a clarification, responding to the article that I linked to yesterday, to say that it could neither confirm nor deny that the PREIT IPO offer period was “fully subscribed”. PREIT said that it would need to wait until the final results of the offer are released to make a comment.
- MB Quick Take: The source article isn’t wrong, and neither is PREIT. It’s possible for both to be correct. However, for those of us who have been at this for some years, it’s interesting to see how underwriters and companies going through their IPO offer periods are so much more reserved now when talking about the potential oversubscription of an IPO. In the old days, you’d be getting bombarded by breathless speculation about which tranches were oversubscribed and by how much. I don’t know for certain, but I have reason to believe that the PSE has cracked down on that kind of speculation. Now, everyone involved parrots the “let’s wait for the final accounting” line.
- **Premiere Horizon Alliance [PHA 0.3 ▲1.6%] [link] has filed a case against Marvin Dela Cruz, its potential owner, and Augusto Antonio C. Serafica, Jr., its own board member, for estafa in relation to the “alleged misappropriation of the sum of [₱32 million] in corporate funds in connection with a Bonifacio Global City Project”. Just before midnight, Marvin Dela Cruz tweeted: “What a nerve PHA Board and Management. You owe me more than 100M plus interest and even lend you 24M for that BGC Project. You owe Tito more money than your false claim! Your greed is no longer tolerable. Been too gentle and too forgiving. Time to push back.”
- MB Quick Take: Play stupid games, win stupid prizes. I can’t believe this messy situation managed to get even worse, in a completely random way, but here we are.
- **Apex Mining [APX 1.8 unch] [link] was halted yesterday morning after disclosing that it has agreed to purchase 100% of the outstanding stock of the Asia Alliance Mining Resources Corporation (AAMRC) for US $81.5 million, payable over 5 years. According to APX’s disclosure, AAMRC owns “copper mines and mining claims covering 20,237 hectares” in Davao de Oro. APX said that the deal allows the company to expand its mining presence in the area, and provides a potential site for a new “tailings storage facility” that will help APX transition beyond the limited lifespan of its existing tailings storage facility. Payment for the shares will require APX to provide a $5.5 million down payment upon signing of the share purchase agreement, then to pay the remaining $76 million in four equal installments of $19 million per installment over the next 5 years.
- MB Quick Take: While the price of copper is kind of stagnant and uninteresting, sitting on the sidelines, watching nickel and coal thrash business plans and mint new millionaires, the long-term outlook for the metal is good, and the tone of APX’s messaging around this acquisition is one of longevity. I don’t follow APX too closely, but it appears as though they’re playing the long game, and with a pretty generous payment plan as well.
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