Stock Commentary

Quick takes from around the market

Merkado Barkada
Quick takes from around the market
  1. DoubleDragon [DD 7.17 ?0.3%; 54% avgVol] [link] CEO Edgar Sia said that the company’s priority is to diversify its revenue sources across several countries, such that no single country would account for more than 10% of DD’s revenue. Mr. Sia gave the comments as part of his speech to shareholders at the annual stockholders’ meeting. He said that DD would “remain to be a deep rooted Filipino company at its core forever.”

    MB Quick Take: The most obvious way for DD to “do” this diversification is through its Hotel101 condotel brand, which has a project in Japan and several more planned for countries like Spain that are destination travel spots for Filipinos. But even that brand has a (comparatively) huge domestic presence with 9 locations in the Philippines. I’m not sure what DD’s path is to accomplish this goal, but if it’s through Hotel101, I would expect that DD would really need to accelerate its movement in several countries at the same time through 2024.
  2. Haus Talk [HTI 0.91 ?1.1%; 69% avgVol] [link] adjusted its dividend policy to include 20% of net income, not just 20% of “recurring” income sources. HTI said that the reason for the change is to “increase the annual minimum payout.”

    MB Quick Take: While investors should look at dividend policies like a “best case scenario”, I think that it’s positive for a company to have such a policy, and even better when the company is interested enough in paying dividends to amend its policy to be more pro-dividend. The Madlambayan Family members are direct shareholders of HTI, so while this change is likely being made in their best interest, it doesn’t hurt that regular minority shareholders will get a chance to participate in the same payouts that are intended to return some cash to the family.

  3. Nickel Asia [NIKL 6.12 ?13.3%; 748% avgVol] [link] pumped more than 13% in Friday’s session thanks to the surprise news that it would replace Union Bank [UBP 64.50 ?8.8%; 858% avgVol] in the PSEi, effective October 4. Over ?280 million in NIKL shares changed hands as investors speculated on the potential share-price benefits of the stock’s pending PSEi inclusion.

    MB Quick Take: While it’s cool that something actually happened on the exchange, I think the exact thing that made this event fun (it was pretty random) is probably going to be a net negative for the PSE and the PSEi. The PSE’s communication of this change was non-existant as far as I could tell. The rule change that led to UBP’s removal is probably a good one (counting shares owned by SSS as non-public because they have board seats), but the rule change seemed to suddenly evolve from a Level 1 Proposed Rulemander to a Level 10 Implimented Rulizard overnight. I checked the PSE’s circulars (as I do each morning) and I didn’t see anything prior to the announcement that could have given UBP shareholders any certainty about how the PSE would proceed and when. So, what happened to NIKL was great and congrats to its holders, but something seems really off about how this whole thing went down, and I don’t hold it against anyone involved in the PSEi to be confused or a little frustrated with how the index has been managed recently.
  4. Department of Finance (DOF) Secretary Benjamin Diokno [link] said that he is not being considered for the position of CEO of the Maharlika Investment Fund (MIF) because he didn’t apply and the candidate review process is “closed na”. Rumors were swirling last week that President Marcos was readying a replacement for the DOF Secretary to allow Mr. Diokno the chance to move into a position of control over the MIF.

    MB Quick Take: Mr. Diokno still gets to be the chairman of the MIF by way of his politically appointed position as Secretary of the DOF, so he still has that going for him, which is nice. Mr. Diokno said that the MIF would probably begin its activities in Q1/24. 

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.

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Quick takes from around the market
November 13, 2023 - 9:53am
November 13, 2023 - 9:53am
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