A quick look at the week ahead for the PSE
Ok, so now that we know the US Federal Reserve raised interest rates by 75 basis points, and signaled that it may need to raise rates higher and for longer than previously thought, our eyes should return back to the domestic market to watch how that decision plays out for REITs (probably not great) and the exchange rate (probably not great, especially for companies carrying heavy amounts of US Dollar-denominated debt).
Thankfully, the BSP has removed a great deal of uncertainty by saying that it will also raise rates by 75 basis points when it meets on November 17th, but a lot can happen between now and then.
Getting down to the calendar, I’m expecting to hear something from DITO [DITO 2.80 0.71%] and PLDT [TEL 1614.00 0.37%] about their ongoing debt dispute, as TEL had previously given DITO a deadline of November 4th to repay the P430 million it allegedly owes TEL.
The deadline was strategic, not legal, so it’s possible that nothing has actually happened. On Wednesday, Liberty Flour Mills [LFM 18.00 unch] will IPO its property subsidiary, LFM Properties Corp [LPC 0.107 pre-IPO], using the “by way of introduction’ method, which should result in some ridiculous moments that will be fun (or harrowing) to watch.
Other than that, expect a flood of earnings from companies looking to sneak Q3 earnings reports in ahead of the November 14 deadline.
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I talk about it a lot, but I really can’t understate how arbitrary and weird the PSE’s rules are when it comes to price action on the first day of trading for a company that lists on the PSE “by way of introduction”.
In case you haven’t caught any of my previous rants, the key here is that a listing by way of introduction has no price ceiling or floor on its first day of trading.
It can go up thousands of percent. It can drop 99%. It can do both of those things on the same day.
I can’t think of another circumstance where a stock’s price is left so exposed to do basically whatever the market wants, and the only reason I can think of to allow it is just because “it’s always been done this way”, which is a terrible reason to continue doing something that is in such violent misalignment with the PSE’s interest in maintaining an orderly market.
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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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