Quick takes from around the market
Monde Nissin [MONDE 16.12 1.38%] [link] was charged P4.5 million by the Laguna Lake Development Authority (LLDA) for liquid waste levels that breached certain parameters, as measured between May 4, 2017 to July 24, 2018. MONDE notes that the problem was found to have been corrected by August 6, 2018, when the LLDA conducted a follow-up and found MONDE to have passed the “relevant effluent standards”.
MB Quick Take: Two things: first, it’s hilarious for the LLDA to issue the fine over 4 years since it affirmed the problem to have been corrected; and second, the fine is relatively small and the resolution of the problem doesn’t have any (that I know of) impact on the company’s current operations. All of this was from The Before Times. I only bring it up because I saw some comments in forums raising questions about MONDE’s seeming difficulties with following regulations, but this is something that happened a long time ago and that was corrected. It’s not MONDE’s fault that the LLDA operates with a 126,227,704,000 millisecond ping.
BDO [BDO 125.00 0.64%] [link] said that it would continue its policy of not financing any new coal-fired power plant projects, as part of its support of the country’s “ambitious goal” to reduce its avoidable greenhouse gas emissions by 75% by 2030, and as part of its own goal to reduce its own coal exposure by 50% by 2033.
MB Quick Take: I feel like I’m missing something, because I thought the Department of Energy already announced a moratorium on new coal-fired power plants over two years ago. Not doing something illegal isn’t such a big flex. BDO said that it doesn’t consider working capital loans to existing coal power plants as “coal exposure”, if those loans are used to help transition “out of the coal business.”
Philippine Peso [link] closed at a record low versus the US Dollar for the 5th straight day, at P57.18/USD.
MB Quick Take: The general sentiment here is that there isn’t much that can stand in the way of the US Dollar right now. It’s a wrecking ball. The companies that are most exposed to the weakening peso are those that earn income in pesos, but hold debt that is payable in US Dollars. A high profile example of this would be DITO CME [DITO 3.60 0.28%], which held US $1.16 billion in debt at the end of June of this year. At that time, when it took P55.11 pesos to buy one US Dollar, that debt was worth P1.16 billion (P63.9 billion). Now, with it taking P57.18 to buy one US Dollar, that debt is worth $1.16 billion (P66.3 billion). That’s an increase of P2.4 billion in just two months. If the exchange rate were to reach P60/$1, as some say will eventually happen in this cycle, that would push the peso-denominated value of that DITO debt up to P70 billion. That’s a big problem for any company, but even more so for a company like DITO that generates such huge quarterly losses as it continues to grow its network and try to get its telco off the ground.
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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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