What did I miss?

Merkado Barkada has been dormant for a month while I was on leave. I shut everything down so that my staff could also get a (paid) break from the daily news cycle and the physical and emotional damage that can accumulate while working weird early-morning hours. So while I feverishly devour stale disclosures to build up my context bar and Jewel back-fills all of the market data, let’s take a look back over what’s happened over the last month while MB was dark:

> PLUS included in PSEi:  DigiPlus [PLUS] was the biggest story going when I stepped back at the end of August, and at least one of the material “will they / won’t they” questions looming over PLUS’s valuation was resolved when the PSE announced that PLUS would be included in the PSE Index. PLUS has been a dominant force on the PSE over the past year, but its long-term prospects are going to come down to how lawmakers regulate the industry and how aggressive the BSP will be with its weird rulings on interoperability of e-gaming platforms and e-wallets.

> ABG backdoor completed:  PremiumLands Corp (PLC) completed its backdoor listing through Asiabest [ABG], and now begins its new life focused on mass housing and infrastructure development. While it’s positive to get one of the PSE’s zombies transmogrified into a productive company, I think it’s suboptimal for investors (and market health) for PLC to do this through the backdoor. 

> ACEN delays its SRO:  From what I can tell, ACEN [ACEN] has reduced its capex to a level that no longer requires it to raise as much money to accomplish its FY25 goals. It doesn’t feel like a traditional “market conditions” deferral, more like a “no good use for the cash yet” pause. It’s up to you how to feel about that signal.

> HVN’s valuation chaos:  Golden MV Holdings [HVN] (soon to be called Villar Land Holdings) was rocked when its auditors refused to sign off on HVN’s nearly P1T in net income that it claimed through the revaluation of land earmarked for its goofy “Villar City” development. The stock was suspended for its failure to file audited financials (the lack of a signature from an auditor prevented this), and the SEC has said that it will investigate the valuation method HVN used to arrive at its massive windfall paper profit. #justvillarthings

> SMPH defers REIT (again):  SM Prime Holdings [SMPH] said that it has deferred its REIT until “after” 2026. Yawn. They have plenty of funding sources to tap (including internally-generated funds), but if the SM group hopes to embark on a capex-heavy pivot into renewable energy, expect the group to come back to the market, cap in hand, looking for cash at some point in the future. A REIT is only as good as its asset injection plan, and SMPH’s reluctant attitude makes me wonder if they’d even be aggressive enough to catch my attention. 

> HANN defers IPO:  The Hann Holdings (HANN) IPO was deferred by its Korean owner because of unfavorable market conditions. That’s basically code for “we called around to big investors, and they’re unwilling to pay the price we want”. If HANN really needed the money to embark on an exciting growth phase, it would probably still list regardless of the conditions, but the market is flat and valuations still suppressed, so it’s just going to wait until we’re all a little less discerning with our investments before it tries again (maybe).

> FNI owner detained:  Global Ferronickel [FNI] was rocked after its chairman and owner, Joseph Sy, was arrested at Ninoy Aquino International Airport for allegedly using fake documents to secure Philippine citizenship. Mr. Sy went on leave for the “protection” of FNI and its shareholders, and his fate is still very much up in the air. It’s also not clear how the allegations against Mr. Sy, which include operating FNI plants without permits, will impact FNI’s operations as this political thriller evolves.

> BSP drops rates 25 basis points:  The Bangko Sentral ng Pilipinas (BSP) dropped our headline interest rate by 25 basis points, but in a post-cut interview, BSP Governor Eli Remolona said that we may be in a “sweet spot” with respect to inflation and output growth, and we may not see any additional cuts in FY25. Not sure how “sweet” this spot is, from a consumer perspective. Banks will love it, though.

> LAND to delist:  City and Land Developers [LAND] said that its board of directors approved a share swap with its parent company that would result in the parent as the surviving entity, with the intent of delisting LAND after the merger. LAND didn’t provide a timeline for the merger or delisting.

> PREIT rocked by shutdown order:  The Villar Family was hit with another high-profile egg right in the face when the ERC revoked Siquijor Island Power Corporation’s (SIPCOR) permit to operate as a power supplier, based on SIPCOR’s allegedly poor service. SIPCOR operates diesel generators on land leased to it by Premiere Island Power REIT Corporation [PREIT]. The news prompted a flurry of PREIT selling and questions about the integrity of PREIT’s future dividend stream.

> Maynilad “locks in” October 30 IPO:  After years of delay, Maynilad [MYNLD] has said that it wants to go ahead with a massive October 30 IPO. That plan will still need to be approved by the PSE, however, and while that’s ordinarily a rubber stamp, PSE President Ramon Monzon has sometimes micromanaged the wishes of listing companies to prevent overlap with other PSE business. Seeing as how the market is pretty dead right now, I don’t think MYNLD will have too much difficulty getting what it wants out of a PSE starving for fresh listings. Even compliance listings.

> AR executives facing charges:  Abra Mining [AR] executives and officials are now facing a DoJ indictment for fraudulent trading. The DoJ claims that the pattern of selling unregistered shares appears to be part of a purposeful scheme to defraud the investing public. This case has been a black mark on the face of the PSE and SEC for years, and it feels like Christmas in September to see the “new” SEC pushing forward with this case. AR bagholders are the real victims of the original fraud, and of the subsequent multi-year PSE suspension. At least now there’s a chance to see some of the people who did this receive more than periodic administrative fines from the PSE.

  MB BOTTOM-LINE:  Is it just me, or is that a lot? I’ve even left out some pretty big stuff (like the Konektadong Pinoy Bill), and I’m sure there are some other interesting stories lurking beneath the surface that I’d have noticed had I been following the market on a daily basis. Yet, while a lot seems to have changed, the overall sentiment feels largely the same, maybe trending worse. When I left, the PSEi was at 6250, gold was at $3338, bitcoin was at $117,500, and PLUS was trading at ?25/share. Now, the PSEi is 6155 (down 1.5%), gold is $3461 (up 3.6%), bitcoin is $108,450 (down 7.7%), and PLUS is P23/share (down 8%). Hey, at least OGP holders are happy, and that’s something, right? This monthly digest was kind of a wild ride. Maybe it’s something that I’ll try to do more of going forward.

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