Happy Monday, Barkada --
The PSE lost 73 points to 6396 ▼1.1%
We start the week with some unprotected trading. IS returns to the market after four years of suspension, so this first day will happen without any of the usual guardrails that the exchange uses to keep us maniacs chill.
If you want to mess with it, just remember that these events can become the playthings of some pretty experienced degenerates. Be careful.
▌In today's MB:
- COMING UP: The week ahead
- PH: KPH delisting
- PH: DNA delisting
- INT'L: End of Trump's 90-day pause
- SPNEC has advisors for backdoor listing
- MGreen to potentially list through SPNEC
- Not clear how MGreen/SPNEC would be mixed
- Island IT suspension lifted after 1,572 days
- IS cured massive reporting failures
- Will start trading with no static threshold
- Be careful, these days can get dumb
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▌Main stories covered:
[COMING_UP] The week ahead... Today is the 188th day of 2025. July is already 22% done, but we are only 8% of the way through Q3. The year is 52% gone. We’re already on the back 9!
PH: We start the week with the voluntary delisting of Keppel Philippines Holdings [KPH], and we end the week with the involuntary delisting of Philab Holdings [DNA]. Nothing else is scheduled, aside from the usual spattering of stockholders’ meetings.
International: The 90-day pause that President Trump applied to his janky 17% “reciprocal” tariff rate on goods imported to the US from the Philippines is scheduled to end on July 9.
- MB: It’s wild how quickly the DigiPlus[PLUS 29.50 ▼23.9%; 418% avgVol] implosion has taken up all the air in the room. In our long-only market with no shorting (where you can only earn when a stock goes up), rockets like PLUS can sometimes generate their own weather from the velocity of the money trying to push its way into the stock. In finance-bro speak, owning PLUS had become a “crowded trade”, which is where there are a lot of people all betting on the same thing going in the same direction. In those situations, it’s an absolute party when the crowded trade does well (think Bitcoin going up and your feed filling with portsnaps), but in our long-only market, it can get chaotic when something disrupts the momentum. That’s what happened here, or to put it better, that’s what is still happening, because PLUS investors are still trying to find a stable market price.
[NEWS] SPNEC has advisors to explore MGreen backdoor listing... SP New Energy [SPNEC 1.45 ▲16.0%; 756% avgVol] [link] said that it has engaged advisors to study the potential backdoor listing of MGen Renewable Energy (MGreen), the clean power subsidiary of Meralco PowerGen (MGen). MGen is the power generation arm of Manuel Pangilinan-led distributor Meralco. In a disclosure on July 4, 2025, SPNEC (the listed renewable energy vehicle of MGen) said the plan is still “in the early stages”. It has yet to be decided which MGreen assets SPNEC will absorb as part of the backdoor listing, which may reportedly happen this year. As such, SPNEC said it is still too early to comment on how the consolidation or infusion of MGreen assets will affect its operations, business and financial conditions.
- MB: A backdoor listing is what we call it when a private company (MGreen) takes over a public company (SPNEC), resulting in the previously private company becoming the listed entity. The mechanics of this are a little weird, but the simplified version is that the common owner between SPNEC and MGreen (MER, led by Manny V. Pangilinan) will cause SPNEC to issue a bunch of primary SPNEC shares to MGen’s shareholders in return for MGen shares. The end result is that you have the legal entity of SPNEC receiving a controlling stake in MGreen, and MGreen’s owners receiving a controlling stake in SPNEC. This puts MGreen’s owners in control of SPNEC, which is also in control of MGreen. MER could try to spin MGreen off in the normal way, through an IPO, but that’s a process that can take six to twelve months, and with some monster IPOs on the horizon (Maynilad, GCash, etc), MER might be worried about its ability to get enough attention during the offer period. The backdoor listing is quicker and cheaper, mostly because it does away with all the legal hoops and administrative red tape attached to selling shares through an offer period.
[NEWS] Island IT open for trading today after 1,572-day suspension... Island Information and Technology [IS] [link] will emerge from a four-year suspension and resume trading today (7 July 2025) after complying with reportorial requirements of the Philippine Stock Exchange. In a notice, the PSE said the logistics and technology company finally submitted its annual reports for the years 2020 to 2023, and quarterly reports for the periods ended January 31, 2021, to July 31, 2023, and April 30, 2025. IS’s failure to submit those reports resulted in a long trading suspension that started on 18 March 201. The PSE also announced the lifting of the static threshold on the price of IS shares once trading of the company’s stocks resumes.IS last traded on March 17, 2021, at ₱0.144/share. This puts the company’s market capitalization at ₱703.5 million.
- MB: I want to talk about the PSE’s decision to lift the static thresholds for IS today. For background, the PSE calculates the static thresholds for every stock before the trading day. The calculations are based on the “last traded price” (LTP), which is the stock’s previous closing price. The static threshold places an upper limit (ceiling) on how much a stock price can increase in one day (50%) and a lower limit (floor) on how much a stock price can decrease in one day (30%). In either case, the PSE is meant to use the LTP to calculate the static threshold, except when (1) a suspension is lifted that has lasted for longer than 1 year, (2) it’s the first day of trading for a listing by way of introduction, or (3) upon the consideration of the exchange. In this case, it means that IS will begin trading with absolutely no guardrails on its price. It can go up hundreds of percent, it can go down hundreds of percent, but it can only do that today. Once today is done, it will have those regular guardrails (+50%/-30%) put on it based on today’s closing price. These days can often be chaotic, because, let’s be honest, who even knows what this stock is worth after years and years of suspension? These market events are nothing but spectacle. There’s no reason a listing by way of introduction should be done this way. Sure, technically there wasn’t a “last traded price”, but the listing still has to go forward at a set per-share valuation which the PSE can use for its threshold calculations. I also can’t think of a case where a stock was suspended where the trading shouldn’t start with a static threshold wrapped around its last traded price, even if that was 10 years ago. So what if it takes a couple of days for the stock to find its true price? These days are frustrating.
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