Balai Ni Fruitas stabilization fund 60% exhausted
The weekly stabilization report for Balai Ni Fruitas [BALAI 0.71 1.43%] [link] showed that the fund spent over P6.2 million last week, buying up 9.3 million BALAI shares on the open market, for an average price of P0.67/share.
This brings the total usage of the stabilization fund to P15.8 million over 7 trading days, or P2.25 million per trading day of stabilization fund activity.
Only 40% of the stabilization fund remains from the initial P26.25 million funding amount.
There are 15 trading days left before the stabilization fund expires at the end of the month.
MB BOTTOM-LINE
BALAI has showed some life, but the stock feels like it’s been far too comfortable spending time below its IPO offer price.
The stabilization agent, First Metro Securities, has had to step into battle early and often for this stock, and has already spent about 60% of the fund’s total value with so many days left in its mandate.
The stock is minimally above its offer price, for now, but any dips below and First Metro will be called back into the fight.
If the same fund usage rate were to continue (we have no way to know if it will), then we’d expect the fund to be exhausted by fat-cat lunchtime on Friday, July 15th.
That’s this week. Now, it’s not a foregone conclusion that BALAI’s price will re-test the IPO offer price, but considering it’s basically even right now and the market is still relatively unstable, I’d expect selling pressure to remain a factor for the foreseeable future.
Additionally, First Metro isn’t required to deploy stabilization funds in a robotic way, so they may allow the price to drift lower without throwing stab fund cash at the sub-IPO asking prices in order to conserve the fund for later use.
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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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