Happy Monday, Barkada --
The PSE gained 97 points to 6607 ▲1.5%
I'm back and feeling better! My family had some kind of non-COVID thing rip through us last week, and on Friday morning, after a night of not sleeping and taking decongestants that made me feel blunt and dumb, I felt like it was probably best to ride the bench and recover.
Thank you to all the Barkadans who reached out to wish me well: /@tayamae1726, /@clh72481, /@rskovride, /@isaacnineveh, /@jessie23, /@deloris, /@flightgm, /@declansdad, /@zjhette,
arkitrader,
Atot,
Mike Tan,
mikel,
kalelManila.eth,
Rye Ayan,
Carlos de Guzman, @
ummokkayyy,
Aaron,
Jing,
SpyfratsCall,
Dan Villegas,
John (https://vmst.io/@johny),
Lance Nazal,
Trina C.,
TuktokTrader,
Dividend Pinoy,
JET,
LanAustria,
Rolex Jodieres,
Chip Sillesa, and
Jr Martin!
Thank you all for good vibes on a down day.
- PREIT goes on sale today (25% off)
- Phoenix signs up for LTG "payment plan"
- PLDT being "patient" with DITO's unpaid debts
- Benjamin Diokno confirmed as DoF Secretary
▌Today's sponsor: CityMall
▌Main stories covered:
- [UPDATE] Villar Family slashes PREIT IPO price by 25%... Premiere Island Power REIT [PREIT 1.50 pre-IPO] [link], the Villar Family’s newest REIT IPO, disclosed on Friday that it would price its IPO shares at ₱1.50/share, down from the maximum template price of ₱2.00/share that was initially included in the SEC and PSE IPO application documents. The price change means that the IPO will raise ₱2.4 billion, down from the initially-reported ₱3.2 billion, and that the estimated 2023 dividend yield will rise to 9.56%. PREIT owns several parcels of land that it leases to Villar-owned diesel and fuel-oil power plants on leases with a weighted average expiration of 9.2 years. PREIT’s offer period starts today, November 28, and runs through December 5, with a listing scheduled for December 15. Investors interested in the PREIT IPO can contact their brokerages to purchase the shares, or submit an allocation request through the PSE EASy platform. The Villar Family has selected China Bank Securities Corporation to run its stabilization fund.
- MB: The amount of money being raised doesn’t really matter, because the deal was (and still is) 100% secondary shares, meaning that all of the proceeds raised will go to a few subsidiaries of Manny Villar’s private holding company, Prime Asset Ventures Inc. (PAVI). The price drop is significant, though, as it demonstrates how far REITs have fallen out of favor since the last time the Villar Family sold a REIT to the public, way back in... mid-June. Remember the VistaREIT [VREIT 1.6 ▼3.1%] price cut? That was a 30% drop, and that drop gave VREIT (at the time) an estimated yield of 8.24%, which was (again, at that time) higher than anything else in the PSE’s REIT sector. So VREIT sold its IPO at ₱1.75, and the stock now trades down 10% at ₱1.58/share. At least, in the absence of stock performance, the dividends have matched what the Villar Family said they’d deliver. Are we looking at the same thing here? Another Villar REIT that slashes its price by a shocking amount, to raise its dividend up to be the highest on the PSE, during a long-term downtrend in REIT valuations that could cause the stock price to lag?
- [NOTES] Quick takes from around the market...
- **PLDT [TEL 1665.0 ▲4.1%] [link] gave Dito Telecommunity [DITO 3.0 ▲2.8%] “more time” to settle the ₱430 million outstanding balance that TEL says DITO owes in relation to TEL’s contracted build-out of DITO’s network. DITO failed to satisfy the debt by TEL’s previous November 4 deadline. TEL said that it is being “as patient as it can”. For its part, DITO claims that it doesn’t owe the money because it never committed a material breach to the agreement, and in the alternative, that if it did commit a breach to the agreement, it was forced to sign the agreement as a precondition of interconnection with SMART’s subscribers. TEL clarified that the interconnection deal is with SMART, and that SMART is not a party to the contract that DITO allegedly breached.
- MB Quick Take: Other Dennis Uy companies are just getting around to settling their debt obligations (PNX with LTG Group), so maybe now the group can spend some time on trying to figure this one out. TEL hoping for a Christmas Miracle?
- **Phoenix Petroleum [PNX 8.5 unch] [link] disclosed that it worked out a “reasonable payment plan” with Absolut Distillers, a subsidiary of LT Group [LTG 9.3 ▲1.1%], for ₱158 million in unpaid debts owed by Dennis Uy’s PNX to Lucio Tan’s LTG. The trial court had placed a writ of preliminary attachment against PNX, but PNX now says that the trial court has lifted the garnishment order after PNX and LTG were able to settle the matter privately.
- MB Quick Take: As I mentioned in my original write-up, corporate disagreements rarely evolve to the point where a court is placing writs of attachment on a delinquent company’s bank accounts. That’s a serious situation, and no competent party would ever allow a legal dispute to go there as some form of gamesmanship. I don’t know what’s going on inside PNX or the other group companies, but things must be chaotic for something to have required this to come to an agreement. No terms were disclosed.
- **Benjamin Diokno (Department of Finance [DoF]) [link] was confirmed by the Commission on Appointments as the Secretary of the DoF. The confirmation comes after some whispers that President Marcos could be weighing the possibility of replacing Mr. Diokno with someone with more inflation-fighting experience, like politico-economist Joey Salceda.
- MB Quick Take: The confirmation doesn’t change the at-will nature of Mr. Diokno’s position. He’s a Marcos appointee, and can be removed by Marcos at any time. It’s not a bad sign for Mr. Diokno’s job security, but my feeling is that President Marcos will pocket this card and play it at some later time when a distraction is useful or when it might be advantageous to identify a fall-guy for the problems we may all face if this recent news was not a light at the end of this inflation tunnel, but was in fact a devious head-fake that brought more price increases and interest rate hikes.
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
