Quick takes from around the market

PSE [PSE 175.00, down 0.1%; 69% avgVol] [link] announced that its guidelines for short selling will “take effect immediately”, moving the market “one step closer” to full implementation of short selling on the exchange. The guidelines indicate that the PSE has expanded the shares that are eligible for short selling (PSEi, plus MidCap and DIvY), and that there will be a 10% cap on short interest that will be measured on a per-company basis.

MB quick take: Pessimists will point out that we’re not there yet, and that we’ve been head-faked before into believing that short selling was closer than it was to reality, but I really do think this time is different. The frequency of the PSE’s and SEC’s comments is on the uptick, and the tone of those comments has shifted to one of inevitability. It’s not pillow talk anymore. Will it come in time to short the Christmas/1Q24 pump?
 

2. Bangko Sentral ng Pilipinas (BSP) [link] Governor Eli Remolona said that he’s “ruled out” a reduction in the reserve requirement ratio (RRR) in Q4, and said that the soonest it could happen is 2024.

 

MB quick take: The RRR is the amount of customer deposits that a bank must keep with the BSP, and ours is one of the highest in the ASEAN region. However, the BSP’s long-term goal of lowering the RRR is somewhat at odds with its recent battle against inflation, as lowering the RRR has the effect of injecting billions of pesos into the domestic economy. It’s my personal opinion that the last RRR cut (done by Benjamin Diokno on his way out the door to accepting an appointment to lead the Department of Finance) was excessive and that the excess was in service of Mr. Diokno’s vanity project to reduce the RRR to “single digits” during his term. It’s nice to see Mr. Remolona taking a breather on this front.
 

3. Globe [GLO 1800.00, up 0.4%; 25% avgVol] [link] sold its 77% interest in ECPay to Mynt for P2.31 billion, with P2.1 billion due on closing, and the balance due over the next three years. ECPay is a purchase and payment system provider. GLO said that the move will “better harmonize the capabilities of both ECPay and GCash”. GLO said it would use the cash generated “for its operations.”

 

MB