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Stock Commentary

Quick Take: DITO CME's new director and 3 more market updates

Merkado Barkada
Quick Take: DITO CME's new director and 3 more market updates
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Merkado Barkada

Solar Philippines [SPNEC 1.3 0.8%] [link] will have 5.4 billion shares come out of a 365-day lockup on December 19th. The shares are owned by SPNEC’s parent company, Solar Philippines Power Project Holdings, Inc. (SPPPH), and represent 54.24% of SPNEC’s outstanding shares.

MB Quick Take: SPNEC has been averaging about 21 million shares traded each day over the past 6 weeks, so we can use that as something of a baseline to see if SPPPH is selling any shares. I don’t expect SPPPH to be a seller, though, since the main vehicle for SPPPH’s monetization of SPNEC has been to have SPNEC purchase assets from it. Still, it’s worth just checking in on when the shares go active on the 19th.
 

Synergy Grid [SGP 11.8 1.4%] [link] declared Q4 dividends of P0.26 per share, payable on January 13 to shareholders of record on December 22. The implied ex-date is December 19. Annualized, the dividend represents an annual yield of 8.78% based on yesterday’s closing price of P11.84 per share, and 8.66% based on SGP’s follow-on offering price of P12/share.

MB Quick Take: Despite the janky corporate structure, SGP has been consistent with the dividends from its various indirect and non-voting holdings in the National Grid Corporation of the Philippines. Its yield is higher than most of the REITs on the board, but its stock performance has been “mid” as the kids would say, having lost 15% from its post-SRO high in December of last year.
 

DITO CME [DITO 3.0 1.6%] [link] announced that Jonathan Ravelas was appointed as an independent director to DITO’s board of directors. Mr. Ravelas is a stock and currency trading veteran who resigned from his post as BDO’s Chief Market Strategist earlier this year to take up a position as a consultant to e-Methods for Business Management Corporation.

MB Quick Take: While with BDO, Mr. Ravelas was recognized as one of our most accurate economic forecasters for his ability to translate the wide world of market trends, inflation, and exchange rate data into actionable information. With DITO’s overwhelming exposure to exchange rate fluctuations, having someone like Mr. Ravelas “in the room” could prove incredibly useful for DITO as it navigates the coming quarters of inflation and interest rate hikes.
 

Cirtek [TECH 2.6 2.2%] [link] gave notice that its TCB2A preferred shares will receive a stepped-up dividend in 2023, after TECH elected not to redeem the notes before the 5th anniversary of their sale. The dividend rate will go from 6.125% to 9.125%, and will be applicable starting on the first quarterly dividend for the year 2023.

MB Quick Take: TECH management said that it wouldn’t have been “proper” to redeem the shares before the step-up, and they’ve also committed to not redeeming the shares in the future at any of the optional redemption dates. At the end of the day, though, no corporation wants to pay the step-up rate and they’ll basically do everything they can to avoid doing so. I don’t follow TECH very closely, and I couldn’t find the prospectus for this stock, so I don’t know what about the situation would make it “improper” to redeem. Can anyone fill me in?

 

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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.

CIRTEK HOLDINGS PHILIPPINES CORP.

DITO TELECOMMUNITY CORP.

PHILIPPINE STOCK EXCHANGE

SOLAR PHILIPPINES

SYNERGY GRID & DEVELOPMENT PHILIPPINES INC.

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