Quick Take: On PSE accounts and 2 more market updates
Vulcan Industrial [VUL suspended] [link] board approved a series of measures, including a ticker symbol change (“ECVC”) and the offer and issuance of 550 million new common shares, to be sold by private placement for P1.00/share, in order to comply with the PSE’s 20% public float rule. VUL said that the proceeds of that sale would go toward “operations of the Company, business development, repayment of advances and/or acquisition of mining rights.”
MB Quick Take: As a Star Trek fan, I admit that I have a soft spot in my heart for the original name and ticker of this company, so while it makes no sense to me why the new owners would want to incorporate the old company name into the new entity at all, I appreciate that “Vulcan” will live on in the new name, East Coast Vulcan Corporation. That said, I cannot accept that the board passed up the opportunity to simply slap an “E” on the front of this bad boy and have perhaps the most interesting ticker symbol in recent memory: EVUL. Even ECVUL is better than “ECVC”.
LMG Corp [LMG suspended] [link] acquirer, Maxwealth Infinity Holdings (MIH), was background checked by a few diligent MB readers, and they found that the e-money fintech investment that MIH is involved in is loosely within the Tony Tiu universe of weird agri-tech companies. E-pon is the e-money app that was released by the Binangonan Rural Bank (BRB) in Q2 last year. BRB counts Mr. Tiu’s private holdco, Earthright Holdings (parent company of AgriNurture [ANI 7.32 0.1%; 374% avgVol]), as one of its significant shareholders.
MB Quick Take: When I mentioned that MIH was giving real SquidPay vibes, I didn’t even know that they were tangentially related to the Tony Tiu universe of “weird companies with lofty language and hard-to-define operations”. I don’t like to assume, but these kinds of entanglements matter to me as a long-term investor. Should they matter to you, too? That depends on your investing style, your knowledge of their businesses, and your tolerance for risk. Just putting it out there!
Philippine Stock Exchange [PSE 160.10 1.8%; 318% avgVol] [link] revealed “muted” growth in online stock market accounts in 2022, up only 8% y/y to 1.25 million. PSE noted a 2% decrease in traditional broker accounts to 453,827. Total accounts were up 5%, from 1.62 million in 2021, to 1.71 million in 2022. The PSE attributed the slower growth to a “clean-up of dormant accounts”, but said that it expects an “uptick in the numbers again with the foray of new stock brokerage firms in the online trading space and the upcoming rollout of stock investing features in finance apps”.
MB Quick Take: The market is suffering from a crisis of interest. As Nicky Franco correctly points out, the PSE substantially lags behind all of our SE Asian peers with similarly-developed capital markets when it comes to the number of companies that we have on the stock exchange. Public floats are hilariously small. Volume is bone-dry. Most of the action this year has been driven by tender offers and companies trying to leave the exchange. REITs have padded the PSE’s IPO stats, but these hybrid pref follow-on offerings don’t have the same impact on the stock market eco-system that a fresh equity raise from a new and growing company would. It’s not all doom and gloom, but the challenges facing the SEC and PSE are substantial. And yet, all of these problems will be quickly forgotten once (inevitably) the next bull market starts.
--
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.
- Latest
