GTCapital (GTCAP), informed the Exchange that shares of its perpetual preferred shares will be listed in the Philippine Stock Exchange effective today, October 27, 2016.
There will be two variations namely, Series A (GTPPA), which carries a dividend yield of 4.6299%, and Series B (GTPPB), which carries a dividend yield of 5.0949%. The base offer was P8 billion and was oversubscribed nearly 7 times at P55.1 billion.
For our Stock Signals clients, we dissect the meaning of this offering.
It is cumulative, meaning, dividend in arrears will be paid out upon declaration of dividends. Let’s say GTCAP failed to pay dividends on 2017 and 2018. On 2019, before they can pay out ordinary shareholders’ dividends, they must pay the dividends they owe to preference shareholders for the past 2 years.
Non-voting simply means these stockholders cannot vote during meetings.
Nonparticipating means they do not take part in receiving additional dividends after GTCAP pays out their stated dividend yields.
Perpetual means there is no specific date when to pay back the preferred shareholders. So as long as they do not redeem the shares, investors will receive their yields in perpetuity (for as long as they have the shares).
Use of Proceeds
GTCAP plans to spend the proceeds in:
- Bridge Financing. Loans availed to bridge finance acquisitions will be paid. P9 billion will be allotted to pay short-term loans. Detail of the loans are given below:
- General Corporate Expenses. The company plans to allocate P2.9 billion for general corporate expenses such as interest payments, capital expenditures, capital calls, new investments, and operating expenses.
GT Capital is currently trading at P1,323-apiece, down by 0.23% year-to-date.
From a technical standpoint, GTCAP is trying to hold its 1-year support at 1,333 but seems to look like it’s forming a head and shoulders pattern with 1333 as its neckline. If pattern materializes, the measured move will pull it down to around 1,070. Immediate support though is at 1219.
Top 10 Players’ Sentiment
Participants with a 100% Buying and Selling Activity from Oct-03-2016 to Oct-26-2016 at 03:30PM:
- 21 out of 70 participants or 30.00% of all participants registered a 100% BUYING activity
- 3 out of 70 participants or 4.29% of all participants registered a 100% SELLING activity
- Top 10 Players’ Buying Average: 1390.7348
- Top 10 Players’ Selling Average: 1386.1347
Foreign Fund Flow
On a 30-day trading period, GTCAP is on a Net Foreign Selling worth PHP756,283,905.00.
GTCAP is still a low-risk stock based on my proprietary indicator of a stock’s risk level.
What Can You Say About This Report?
I do hope I was able to help you through my analysis and simplified interpretation of data. Always have a trailing stop-loss to preserve your capital and to protect your gains.
Please let me know your thoughts by commenting below.
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