Steniel cleared for open trading after 18-year suspension

Steniel Manufacturing [STN] [link] had its suspension lifted by the PSE and will resume trading this morning after an 18-year absence from the market. STN last traded on July 5, 2006, when it closed at P0.26/share. The PSE warned that there would be no static threshold applied to STN’s trading today. The company and its subsidiaries produce and sell “all kinds of paper products, paper board and corrugated carton containers”, with its most recent notable action being the purchase of “box plant assets” from Dole Philippines in Davao del Norte and the simultaneous signing of a 10-year minimum purchase agreement between Dole and STN’s subsidiary “for the supply of boxes, labels and other packaging materials made of paper related products.”

MB bottom-line: STN was suspended so long ago that the PSE’s disclosure system couldn’t accurately reflect the date of the original suspension in the “Lifting of Trading Suspension Details” section due to what the PSE called a “system limitation.” Getting past the comical length of the suspension and putting aside all the twists and turns in the company’s history as it thrashed and flailed through its time in the wilderness, I think it’s positive for the PSE to get a company like STN back into good standing: It produces a product that isn’t well-represented in the PSE’s other component companies, it (in theory) increases the vitality of the exchange, and it makes for a charming rehabilitation story. On the other hand, though, the fact that the stock has been suspended for so long that it’s not possible to apply a trading band upon the resumption of trading and that so many corporate changes have happened in the background since the stock was last traded all tell me that this outcome is inappropriate. Not illegal. Not in violation of the rules. Just inappropriate. Whatever the rules are, they shouldn’t permit a company to do what STN has done. I’m not sure if the rules have since been amended to prevent a recurrence of this, or if there’s an amendment process underway to draft those changes, but as nice as it is to get another company back to trading, I think the exchange should consider the STN example as a “DON’T” and not a “DO”. The lack of a trading band means that the price could go up or down any amount. Be careful. 

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