Manila Water (MWC), a cheap but dangerous Opportunity?

[drbubb]

Manila Water (MWC), a cheap but dangerous Opportunity?

It got nasty today for MWC:

Looks nasty on short and long term charts

MWC / Manila Water Corp ... All-Data: 10yr: 5yr: 2yr: 1yr: 6mo: 10d./ Last;

MWC : 6.00 - 3.34, -35.76%, O: 9.31, H:  9.31, L: 5.01, (12mo.R: 5.01 - 28.25), Volume: 113.61 Million - that is huge !

2yr:

P5-ish may have been a great level to Buy

: 10d./ P 6.00 - 3.34

==

 

[drbubb]

(posted yesterday, before Tuesday's big drop):

Philippine BELLWETHER stocks are under-pressure.  Some are making New Lows*

Will the declines in PDLT and the three "M-stocks" spread out to the general Index?

PLDT (TEL: last P 999.5*) vs. PSEI (7,750) -etc. ... update : 10d / MWC (9.34*), MEG (P4.16*), MER (P300*)

*NEW LOWS FOR THE YEAR

My comments on the Viber chat:

+ SEEMS WEIRD to me.  I am a Global Resource stock guy, and Commodity trader.  If things like this were happening in MY space, I would probably have a ton of comments.  Now today, we are seeing some Big Pressure, and key support tested (& maybe broken) on what I think are some key bellwether stocks (MEG, TEL, MWC), but it seems strangely quiet here. (early afternoon comment)... Am I missing something?  Or does no one focus on these bellwether stocks?

TS:

I guess my written comment from 1-2 years ago (as known by those who received my Whatsapp updates then) that the PSEI started a bear market from Feb 2018 peak captures the big picture. That comment stayed and was reinforced many times (the oft repeated "sell on rallies") despite the many calls locally for new record highs and bullish economic picture from BUILDx3 to POGO to lowering of interest rates/bank reserve requirements.

In a bear market, the surprises are on the downside whereas in a bull market, the surprises are on the upside. The usual minimum bear market target of the magnitude (cycle or super cycle or even grand super cycle) that is upon the PSEI is 50% from peak.

+ My main point is ... some important bellwether stocks are breaking down, but not has not yet hit the PSEI index (early afternoon)... Maybe I am being too selective.  Let us see if this decline spreads out... Pity we cannot buy PSEI index Puts & Calls. I might put on a straddle here, If I could (at a low enough Vol.)

JV: Dont' worry... we are coming up with new products that we should be releasing in 2020.

PSEI index ... 10d : 6mo / Close:  7,701.60 , - 176.03, - 2.23%

+ TOP to BOTTOM day for the PSEI, which finally got hit hard.  Down 176 points, over 2%...  Bells (belwether stocks) Rang first!

PSEI : 6mo / Close:  7,701.60 , - 176.03, -2.23%

TS: The PSEI high of today is important and must be respected just like PSEI's high early Nov at 8,200 which also had ALI falling hard that day.

+ LOOK at the 6 month chart of the PSEI.  I think we can expect the support at 7.500 to be tested very soon.  It may hold on the first test, and then might be taken out early in 2020.  If it happens that way, I would regard that as Bearish, probably very bearish, and that might be followed by a test of 6500 and lower in 2020. (That is a heavy selloff - and will like bring some real follow-thru.  I am glad I have kept most of my powder dry)

TS:

For all the participants in this chat group, hopefully you have been guided well here with the general unequivocal (and mostly unhedged) bearish tone on the PSEI since this chat group was set up. If that bearish tone ran counter to most of the things you heard or read, being contrarian does have its value at certain junctures of the wave patterns. Note that individual stocks may not necessarily follow the general market.

[drbubb]

Manila Water shares suffer biggest drop as concession worries rage

ABS-CBN News

Posted at Dec 17 2019

MANILA -- Shares of Manila Water Inc dropped by as much as 39 percent on Tuesday, its steepest decline on record, due to uncertainty over its concession deal with Philippine government to supply water to half of the capital.

At noon, shares of the Ayala-led utility were down 27.5 percent to P6.77. Shares of Metro Pacific Investments Corp, which operates rival Maynilad Water Services Inc, were up 0.06 percent to P3.11.

The 39-percent decline earlier in the day was the biggest decline on record for Manila Water, according to Bloomberg data. The two water firms lost a combined $2 billion (P101 billion) in market value since they were criticized by President Rodrigo Duterte.

Duterte said the public would be "milked by millions" should the two firms collect P10.8 billion in compensation that was awarded by a Singapore-based arbitration court. They eventually dropped the claims.

Earlier Tuesday, the government's chief water regulator said "everything is possible" as the two companies renegotiate their concession agreements with the Metropolitan Waterworks and Sewerage System.

The concession agreements remain in place as the MWSS revoked only the board resolution that extended them beyond 2022, not the contracts themselves, Chief Regulator Patrick Ty said.

"Ibig sabihin po nun, tuloy-tuloy pa rin po, hindi pa po canceled ang extension, hindi pa po kanselado ang kontrata," he told radio DZMM.

(This means that it's still continuous, the extension is not yet canceled, the contract is not yet canceled.)

"Everything is possible, depende po iyan sa negotiation... Pinag-aaralan pa po at ongoing negotiations pa po," he added.

(Everything is possible, depending on the negotiation. It is still being studied and negotiations are ongoing.)

President Rodrigo Duterte wants to "renegotiate" some parts of the concession agreement, including a provision that bars the government from interfering in water rates, the Department of Justice earlier said.
 
A new concession deal will be offered to Maynilad and Manila Water first, then to other consortia if both reject it, MWSS Administrator Emmanuel Salamat earlier said.

"Magsimula tayo sa bagong kontrata na magbe-benefit ang greater majority. Kung hindi, we will go through the other process which is re-bidding," he told ABS-CBN News.

(We will start with a new contract that will benefit the greater majority. If they reject it, we will go through the other process which is re-bidding.)

• MWSS says steep hike in water rates won't be allowed
• Manila Water, Maynilad drop P10.8-B compensation claims, rate hikes

[drbubb]

Ayalas and Pangilinan bow before King Digong

By Ramon T. Tulfo /

December 17, 2019

RAMON T. TULFO

WATER concessionaires Manila Water Co. Inc. and Maynilad Water Services Inc. say they will no longer insist in making the government pay them billions of pesos in penalties based on rulings of an international arbitral tribunal awarding billions of pesos to the two companies.

The Permanent Court of Arbitration in Singapore has ordered the Philippine government to pay Manila Water P7.3 billion and Maynilad P3.4 billion for losses supposedly incurred when the state regulator did not allow the companies to raise their rates.

Manila Water is owned by the Ayalas of Makati, while Maynilad is owned by the Indonesian tycoon Anthoni Salim, whose dummy here is Filipino businessman Manuel V. Pangilinan, who is known by his initials MVP.

Knowing they cannot fight City Hall — meaning, the Duterte administration — the Ayalas and Pangilinan are now lying prostrate in a servile posture before King Digong.

Now these arrogant oligarchs know who the boss is.

King Digong said he would publicly humiliate the Ayalas and Pangilinan by slapping them in their faces for not paying the corporate income taxes.

If I know Digong Duterte, he doesn’t threaten, he does what he says. He walks his talk.

Duterte’s predecessors Corazon Aquino, Fidel Ramos, Joseph Estrada, Gloria Arroyo and Benigno Aquino 3rd (the weirdo) held the Ayalas and Pangilinan in royal deference.

This is not the first time that the President has berated Pangilinan in public over the latter’s impertinence towards the Duterte administration.

In June 2016, Digong put Pangilinan in his place after MVP told the President to assert the country’s sovereign rights over the West Philippine Sea.

Digong shot back: “Just remember you are just a puppet of the foreign-based Salim group, while I am the elected president of the Republic of the Philippines.”

After that, MVP followed Digong around like a puppy walking after its master.

The Presidential Anti-Corruption Commission (PACC) rides again in cavalier fashion.

The anti-graft agency has ordered Public Works and Highways Secretary Mark Villar to regularly rotate regional directors and district engineers to prevent familiarization with contractors and stop rampant corruption.

The PACC is acting like President Digong.

Is the PACC aware that a Cabinet member like Villar is the President’s alter ego and, therefore, giving him orders is like dictating on the President himself.

The agency has become too big for its britches.

The PACC’s mandate is to investigate reports of corruption committed by presidential appointees — such as Cabinet members — but can’t order them around.

[drbubb]

As mentioned on a V iber chat

MWC : I'm out ! 5.74 > 7.57 : + 31.8%

+ That's a good return for a two day trade

+ I think it likely, I will have a chance to buy cheaper soon.  Would like to see it trading near the 5.01 Low on lighter volume.  And if so, would likely buy then

+ I am very conscious of the HUGE volume we saw on the low.  And I like lows retested on lighter volume for my long term buys.