Investors take positions on ISM amid backdoor listing hopes

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By Christine J.S. Castañeda
Senior Researcher

DEVELOPMENTS on new telecommunications player Mislatel consortium and hopes on the backdoor listing of Dennis Uy’s Udenna Corp. through ISM Communications Corp. (ISM) made the latter one of the most actively traded stocks last week.

Data from the Philippine Stock Exchange showed P776.17 million worth of 112.92 million shares exchanged hands on the trading floor from June 17-21, making it the 11th most actively traded stock during the period.

Its stock price closed at P6.99 apiece on Friday, up 7.4% from its P6.51 finish on June 14. Year to date, it is up 17.9%.

“So far, ISM’s movements in the market is lifted by the hopes that the backdoor listing of businessman Dennis Uy’s holding company [Udenna Corp. through ISM] would be finalized by the SEC (Securities and Exchange Commission),” Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financial, Inc., said in an e-mail.

“These hopes also link ISM to the positive developments of Mislatel Consortium of which Udenna Corp. is a member… [t]his is what’s keeping ISM’s share price up for the week,” he added.

Mr. Tantiangco also noted the stock’s trading activity on Thursday, which was the biggest for the week, with a volume turnover of 69.31 million and value turnover of P477.54 million. Thursday’s transaction marked a sell-off that brought the stock’s closing price to P6.86 per share, down two percent from the previous day.

“Apparently for ISM, it’s still buoyed by hopes and speculations without any concrete fundamentals making it more susceptible to episodes of profit taking,” Mr. Tantiangco added.

Meanwhile, in a text message, Diversified Securities, Inc. Equity Trader Aniceto K. Pangan attributed the stock movement mainly to expectations of the Mislatel consortium, of which ISM is connected through consortium member Udenna, to get its license to operate by July.

For Unicapital Securities, Inc. Technical Analyst Jeff Radley C. See: “Investors are already anticipating the third telco that is why [ISM] was actively traded.”

Udenna is in the process of conducting a share swap with ISM. This will involve the issuance of 24.058 million ISM shares to shareholders of Udenna in exchange for two billion Udenna shares. ISM’s name will then be changed to Udenna Holdings Corp.

The transaction is still pending approval from the SEC.

In a disclosure to the stock exchange, Chelsea Logistics and Infrastructure Holdings Corp. said the Mislatel consortium finalized the share-purchase agreement last June 13. The deal was signed by Udenna Chairman Dennis A. Uy, Chelsea President and Chief Executive Officer Chryss Alfonsus V. Damuy, and China Telecom Deputy Managing Director Xiao Wei.

The Mislatel consortium is composed of China Telecommunications Corp. and Davao-based businessman Dennis A. Uy’s companies — Udenna Corp. and Chelsea Logistics and Infrastructure Holdings Corp.

The Department of Information and Communications Technology (DICT) earlier said that it is targeting to award the consortium with its frequencies and permit to operate by the end of June.

ISM posted a net income of P2.56 million in the first quarter of 2019, down 92.9% from the P35.97 million in the same period a year ago.

Diversified Securities’ Mr. Pangan pegged the stock’s support and resistance at P5.95 and P7.40, respectively.

For his part, Philstocks’ Mr. Tantiangco: “Support is set a P6. Initial resistance is at P7 [while] next resistance is at its Feb. 7, 2019 high of P7.4.

Unicapital’s Mr. See said support levels are seen at P6.55, P6.00 and P5.75, while resistance levels are P7.40 and P8.60.