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Stock Commentary

Quick Take: US handpicked NOW Corp. to aid 5G deployment and 4 more market updates

Merkado Barkada
Quick Take: US handpicked NOW Corp. to aid 5G deployment and 4 more market updates
Is NOW a lonely outpost just meant to check a box, or does the US plan to make this a well-funded front in the war against Huawei?
Merkado Barkada

Premiere Island Power REIT [PREIT 2.00 pre-IPO] should have finalized its pricing yesterday, according to the PSE-approved IPO timeline that was published a few days ago.

MB Quick Take: Most companies going public don’t announce their finalized pricing on the actual date that pricing is established; usually, they wait until the following day or even the following evening to reveal the pricing to the public. Whatever the Villar Family decides, the price won’t be written in stone; we’ve seen companies change the price even after the price was established and announced on pricing day.
 

Raslag [ASLAG 1.7 1.8%] [link] reminded the public that 1,137,378,600 common shares will be coming out of a mandatory 180-day lockup on December 5. The shares represent around 75% of ASLAG’s outstanding shares. Most are owned by J Ten Equities, Inc. and Angeles Power, Inc., both companies that are controlled by the Nepomuceno Family.

MB Quick Take: These mandatory lockups are meant to prevent immediate rug-pulls on IPO investors by requiring significant shareholders to submit their holdings to a lockup that prevents their sale or transfer for a period of time. Once the lockup ends, the shares are available to be traded just like any other share. Considering how voracious the family has been in buying back shares from the public, I don’t expect to see the family part ways with any of their shares once the shares become eligible for trading on the morning of the 5th. Still, I’m going to make a note for myself to watch ASLAG that morning to see if there is any uptick in selling volume just to confirm my analysis.
 

Cebu Landmasters [CLI 2.6 0.8%] [link] disclosed several days of buying by AB Soberano Holdings, a holding company owned by Jose Soberano and several members of the Soberano Family. Mr. Soberano is the Chairman, President and CEO of CLI. AB Soberano Holdings is the parent company of CLI.

MB Quick Take: CLI is down around 12% from its 52-week high, which it set back in April, but it’s had a recent string of strong price performance, rising more than 15% from a low of P2.30/share on October 5. CLI doesn’t have a monster public float (23.6%), but the number of shares that AB Soberano Holdings has been buying should cause any problems.
 

DMCI [DMC 9.9 0.5%] [link] admits weak peso and strong nickel prices helped to obscure the depletion of its Berong nickel mine. DMC said that 9M nickel ore shipments were down 25%, but that the demand for nickel helped DMC sell a good amount of the Berong mine’s low-grade inventory at decent prices. DMC said that those decent prices looked even better as they were set in US Dollars. DMCI Mining saw its net income fall 17% to P1.17 billion.

MB Quick Take: Mine depletion is a big issue, but it’s better to have your mine depleted at a time when nickel prices are soaring and the settlement currency (US Dollars) is also soaring relative to your reporting currency (Philippine Pesos). It let DMCI Mining get rid of its junky nickel inventory at a good price.
 

NOW Corp [NOW 1.2] [link] was selected by the United States to help deploy 5G technology in the Philippines, to provide “faster and more reliable digital services and increased broadband internet access”. The announcement was made during Vice President Kamala Harris’s visit to the country. No timelines or deployment targets were provided by NOW or the US Embassy.

MB Quick Take: We’ll have to see how serious the US is about this initiative once the warm glow of the PR from the Vice President’s trip fades and the US and NOW are left with the cold reality of putting up towers. To me, this boils down to an extension of the 5G technology war between the US (through Qualcomm) and China (through Huawei) for control of information in the 5G age. Is NOW a lonely outpost just meant to check a box, or does the US plan to make this a well-funded front in the war against Huawei? I don’t really know. That’s just what it looks like to me. NOW is up 31% over the past two weeks of trading, after bouncing around its 5-year low of P0.85/share. 

 

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Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.
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.

CEBU LANDMASTERS INC.

DMCI HOLDINGS INC.

NOW CORP.

PHILIPPINE STOCK EXCHANGE

RASLAG CORP.

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