RCBC pumps almost 8% on massive P1-b block sale by foreign seller to local buyer
RCBC [RCB 20.30 7.98%] was the most active stock on the PSE yesterday by value, with almost P1.1 billion in shares trading hands thanks to that massive block sale of 54 million RCB shares at P18.80/share.
The shares were owned by a foreign investor and sold to a local buyer. Bilyonaryo noted that RCB has three significant foreign shareholders: Cathay Life Insurance Corp (22.19%), Sumitomo Mitsui Banking Corp (5%), and International Finance Corp (4%).
Bilyonaryo quoted a source that speculated the local buyer could have been the Sy Family, based on the family’s existing 1.15% stake in RCB through Sybase Equity Investments.
MB BOTTOM-LINE
A block sale is really just a privately-negotiated trade of listed shares.
Block trades are usually facilitated by banks for a fee (in this case it looks like that was done by BDO Securities), and are a way for buyers and sellers to get some price certainty when dealing with a large volume of stock. In this case, RCB’s average daily value turnover (~P6 million) is hilariously small compared to the heft of the P1 billion trade that the foreign seller wanted to conduct.
Trying to sell that many shares quickly into that kind of relatively low daily volume would definitely mess with the price in a way that would work against the seller’s interest in maximising their overall return.
I think it’s fun to speculate about who the local buyer could be, but I just wanted to talk about this quickly because I saw a couple of comments from readers that seemed to infer that block trades are somehow sketchy or underhanded in some way.
They’re pretty normal, and actually quite useful to buyers and sellers at that kind of scale to move in and out of positions more quickly and with higher certainty.
Block trades are just a tool, and like any tool, they can be used with good or bad intent; there’s nothing inherent to a block trade that makes it bad. It just looks weird!
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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