According to a report by Miguel R. Camus of InsiderPH [link], Citicore Renewable Energy Corp. [CREC 3.88 pre-IPO] CEO Oliver Tan said that CREC moved its IPO back by a week to June 7 after consulting with a feng shui expert. Mr. Tan said that June 7 is a more “auspicious” date.
MB bottom-line: I’m not a superstitious person but I understand why these considerations can creep in where the difference between success and failure can so often be attributed to random chance. We’ve seen companies in the past set their maximum IPO price at a number that is thought to carry better “luck”, but it’s hard to look at the history of IPO results and see much good luck in all that red. Good reason? Bad reason? It doesn’t make that much difference to me as an investor, and it likely won’t make any difference to anyone a year or two from now when CREC is listed and the IPO is just a distant memory. Still, thought it was interesting to pass this along since I was lightly speculating on the reason for the date change yesterday.
—
Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.
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.
SP New Energy [SPNEC 1.06, down 6.2%; 150% avgVol] [pdf link] fell more than 6% yesterday as traders digested the MSCI Global Small Cap review results that indicated SPNEC would be deleted from the index, effective June 3. Cebu Pacific [CEB 29.50, down 1.8%; 113% avgVol] is also scheduled for deletion from the index, while ACEN [ACEN 5.00, up 9.4%; 478% avgVol] was selected for inclusion. Aboitiz Equity Ventures [AEV 37.00, down 3.5%; 458% avgVol] was deleted from the MSCI Global Standard index.
MB bottom-line: While the majority of people that I know don’t specifically trade index rebalancings, we are all impacted by these additions and deletions to some degree or another, so I think it’s important to flag when these rebalancings happen to make the markets seem just a little less random. For those unfamiliar, if you consider all the potential buyers of PSE stocks as just one room of buyers in the global “building” of potential buyers, getting added to an index is almost like getting credentials to access an entirely new room of potential buyers. Adding new buyers to the mix will drive up the stock price since the number of outstanding shares has not changed, only the number of interested buyers. That’s what is often referred to as “inflow”. Conversely, losing those new buyers will cause a drop in the price as due to the selling pressure from their need to exit their positions in anticipation of the stock losing its “credential” to access the room. That’s “outflow”. I know it’s a goofy analogy, but it can help new traders gain familiarity with all this talk of “inflows” and “outflows” around rebalancing moves.
—
Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.
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.