PSE to dispute BIR findings and 3 more market updates
PSE [PSE 164.00 unch] [link] notified the market that it received an assessment from the Bureau of Internal Revenue (BIR) that it owed P189.2 million in alleged tax deficiencies, penalties, and interest, coming from calendar year 2017. The PSE said that it would dispute the BIR findings. Finance Secretary Benjamin Diokno said that the BIR was “just doing their job.” MB […]
Philippine Times 
PSE [PSE 164.00 unch] [link] notified the market that it received an assessment from the Bureau of Internal Revenue (BIR) that it owed P189.2 million in alleged tax deficiencies, penalties, and interest, coming from calendar year 2017. The PSE said that it would dispute the BIR findings. Finance Secretary Benjamin Diokno said that the BIR was “just doing their job.”
MB Quick Take
Getting the BIR’s attention is never a good thing, but it’s important to put the potential size of this assessment in context with the PSE’s financial standing and performance. According to its Q1 earnings report, the ?189.2 million is about 93% of its quarterly profit, but the PSE has over P2 billion in cash and cash equivalents on the balance sheet that it could use to take the hit. It’s a weird situation that should cause some behind-the-scenes process adjustments, but this isn’t an existential threat by any means.
Boulevard Holdings [BHI 0.07 33.3%; 1304% avgVol] [link] had its 110-day suspension lifted after it finally submitted its annual report for the fiscal year ending May 31, 2022, and the following three quarterly reports. BHI surged 33% on massive volume after the suspension was lifted.
MB Quick Take
Play if you want to play, but be warned that BHI is very casual with its reporting and is often suspended for failing to do the bare minimum with respect to its reporting obligations. BHI also seems to be alarmingly comfortable in a state of suspension, which is a massive red flag to me.
Alliance Global [AGI 13.34 0.5%; 573% avgVol] [link] is losing the Hong Kong-based Genting as its foreign partner in the local gaming industry. AGI revealed that it is buying Genting’s entire stake in Newport Wold Resorts project.
MB Quick Take
As I’ve said before, I’m not comfortable in my analysis of the gaming sector, so I’m not really sure what to make of this news. To an outsider like me, it just sounds like a pretty big deal to lose such a powerful 40% stakeholder in one transaction, but I’m not really sure what this means for Andrew Tan, AGI, and the Newport project. Any guest analysts interested in providing some context, please send me a note!
MJC Investments [MJIC suspended] [link] disclosed that its board authorized the conversion into equity of P2.4 billion in “deposits for future subscription” made by HK Strategic Investors and Manila Jockey Club [MJC suspended]. The unusual deposits were made way back in 2021.
MB Quick Take
As an investor, I hate seeing these massive pending transactions on the books that fester for years. The depositors will get 2.2 billion shares out of the conversion, which is a 69% increase in the outstanding shares of MJIC. That’s a substantial change.
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