Happy Tuesday, Barkada --
The PSE gained 130 points (!!) to 6523 ▲2%
Shout-out to all the readers that saw my "trading rig" post on Twitter yesterday and let me know the screen configuration that they use to trade. Here it is, for those who missed it:
What's your trading rig?
We had 25 responses, and here were the top three configs:
- #8 & #9 (laptop and phone)
- #9 (laptop only)
- #8 (phone only)
Only one person confessed to having a #6, there was a crazy pic of a #2, and nobody admitted to rocking the "flight simulator" (#5).
One thing I forgot to mention about my setup is that I cannot live without a calculator beside me. I might not use it all day, but I feel naked and exposed if I don't have my vintage CD-R King calculator next to me.
Thanks everyone for responding!
- Monde Nissin pumps on noodle exclusion
- CIP buys company for P1.7-B
- Union Bank pushes P0.9-B into UnionDigital
▌Main stories covered:
- [NEWS] Monde Nissin pumps on noodles’ exclusion from salt tax... Shares of Monde Nissin [MONDE 8.10 ▲6.6%; 56% avgVol] were up as high as 7.5% in intra-day trading yesterday after Secretary of Finance Benjamin Diokno said in a press briefing that instant noodles would not be subjected to a new tax package that is aimed at foods that exceed Department of Health (DoH) specifications for salt content [link]. Mr. Diokno said that the Department of Finance (DoF) is consulting with the DoH on an appropriate list of foods that should be subjected to the tax, which he said may include “snaks, chips, ‘yun talaga siguro.” The overall tax package, which would also address excess sugar, is forecasted to reduce consumption of junk food by 21%.
- MB: The DoF has been scrambling for years to find new revenue streams after COVID decimated the national coffers and subsequent budgets have only served to increase the deficit. I saw some people online claim that MONDE must have done some intense lobbying behind the scenes to have had its bedrock product specifically excluded from the tax, considering how salty instant noodles are, but I think that analysis ignores the purpose of the tax plan and the populist limitations that might constrain the DoF’s implementation. MONDE’s instant noodles are cheap meal replacements for people who cannot afford much else, while the tax plan is intended to take aim at snacky-type foods that might be considered more of a bad habit. I don’t think noodles were excluded to spare MONDE from the taxman’s wrath, but rather, they were excluded to spare the government from the people’s wrath that could come from raising the cost of what many consider to be something of a last-resort meal. If the DoF could get away with taxing noodles, it would. But it probably can’t, so MONDE’s noodle business is safe (for now).
- [NEWS] Chemical Industries acquires Tierra Ariana for ₱1.7-B... Chemical Industries [CIP suspended] [link] was suspended by the PSE after it disclosed that CIP executed a share purchase agreement to buy 100% of the common shares of Tierra Ariana Eco Land (TAEL) for ₱1.7 billion. CIP said TAEL had over ₱1.8 billion in total assets according to TAEL’s FY22 audited financial statements. CIP also said that this acquisition is “not related with the 2019 transaction”, and is not related to the change of control that “occured sometime in 2019”, and that there would be “no change in CIP’s board and officers”. The company said that none of TAEL’s directors have any relation or conflict with current or former CIP managers, or CIP’s current majority shareholder. The PSE suspended CIP under the Substantial Acquisition rule, but it’s already been suspended since mid-May for failure to submit audited financials, so there was no opportunity for any shenanigans on the announcement.
- MB: At first glance, this transaction is wearing the uniform of a backdoor listing, but CIP seems to be going out of its way to characterize this as a pure acquisition with no change in control at the CIP level. CIP’s last quarterly report said that it had more than ₱2.8 billion in total assets, so this would be a substantial acquisition that requires “comprehensive disclosure” by CIP before trading in its shares can resume. Well, that and submitting its audited financials, of course.
- [NEWS] Union Bank to push ₱0.9-B down into UnionDigital... Union Bank [UBP 75.00 ▲0.7%; 71% avgVol] [link] board approved the infusion of ₱0.9 billion of additional capital into UBP’s subsidiary, UnionDigital Bank, to “support business growth”. UnionDigital Bank was granted a digital banking license by the BSP approximately one year ago. UBP’s share price is up marginally over the past year, but is actually down 23% from its Q1 high of around ₱97/share.
- MB: UBP didn’t elaborate on what the money would exactly be used for, but UnionDigital Bank is one of just six BSP-licensed digital banks in the country. It makes sense to try to capitalize on that degree of exclusivity, especially considering how attractive digital banking services like Maya have been to foreign investors. UBP has been aggressive over the past year in the traditional banking space, so I hope some of that bravado will carry over into the digital space where UBP has enjoyed a “pro-tech” reputation for many years.
- [CORRECTIONS] Oops, my bad...
- July 2nd is not the end of Felipe Medalla’s 6-year term as BSP Governor. Mr. Medalla was appointed to fill the seat for the remainder of Benjamin Diokno’s term as BSP Governor, after he quit the post to accept the Secretary of Finance post with the Marcos administration. Thank you to Joel for spotting that error, and to Gerald de Belen for the context on the rules surrounding his appointment.
- We are not “more than halfway through the year”. Yesterday I mentioned that time is running out on all those who predicted that the PSE would finish the year above 8,000 by pointing out that we’re already more than halfway through the year. As Miko so diligently informed me, this statement was factually false. This is a direct quote from Miko’s email to me on the subject: “Halfway through the year is 183 days after December 31st, 2022, which would be 31(Jan) + 28(Feb) + 31(Mar) + 30(Apr) + 31(May) + 30(Jun) + 2(Jul) = 183. Hence, halfway through the year is July 2nd, which is this Sunday.” There’s just something so delicious about receiving an email like that. Literally made my day. Thank you Miko!
- Repower Energy Development’s offer period will not start the day after Eid. According to REDC’s most recent prospectus, the offer period would begin on Friday, June 30th if the intended offer period start (July 28th) is declared a holiday, not Thursday, June 29. Thank you to Steph for writing in to let me know! Good spotting!
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 here
Read today's full newsletter here
