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Record-high cash dividend moves Semirara Mining and Power stocks

MARKET players rallied behind Semirara Mining and Power Corp. (SMPC) after the announcement of its highest-ever special cash dividends, analysts said.

A total of P1.1-billion worth of 24.61 million shares in SMPC were traded from Oct. 17 to 21, data from the Philippine Stock Exchange (PSE) showed, making it the sixth most actively traded stock last week.

Its shares were up by 1.48% week on week to P41.10 apiece on Friday compared with its closing on Oct. 14 of P40.50 each. Since the beginning of the year, the stock went up 81.9%.

Equity analysts pointed out that SMPC’s stock was driven by the approved issuance of special cash dividends, which meant P3.50 per outstanding common share. This was double the P1.75 special cash dividends declared last year.

“With the additional special cash dividend, the total dividend payout of SCC to its shareholders for 2022 will be P5.00 per share, the highest in its corporate history,” SMPC said in a press release last week. SCC is the company’s stock symbol.

“The news of SMPC shareholders receiving record-high dividends pushed the stock higher this week. However, the gains were short-lived as investors began booking profits due to market uncertainties caused by the US Federal Reserve’s recent hawkish comments,” Timson Securities, Inc. Head of Online Trading Marc Kebinson L. Lood said in a Viber message.

“This is good for the company and that as long as they continue to pay out high dividends on a regular basis, investors will hold the stock for a long period, and demand for the stock will rise among those seeking a steady stream of passive income,” Mr. Lood added.

Recent minutes of the Sept. 20 to 21 meeting of the US Fed showed a hawkish stance might be taken by policymakers. The continuous rise of commodity prices could be tempered by increasing interest rates.

Since March, the Fed has raised rates by 300 basis points (bps), with the latest move being a third straight 75-bp hike in the September meeting.

Mercantile Securities Corp. Head Trader Jeff Radley C. See said in a separate interview that investors ran to the stock anticipating “huge dividends” but does not see the price moving any higher.

“The stock might just move sideways. There won’t be any catalyst for the stock moving forward,” Mr. See said in an e-mail.

Meanwhile, Mr. Lood foresees “bright” prospects for the power and mining firm in the medium term.

“Given that the winter months are approaching, we believe SCC will make good numbers because coal is in high demand during this season. In the long term, I believe people will gradually transition to renewables as many nations begin to reinforce and promote sustainability,” Mr. Lood said.

Traders are also “optimistic” for SMPC’s third-quarter earnings report, Mr. Lood added.

In the second quarter, SMPC posted a net income of P10.8 billion, almost three times the P4 billion from the year before.

“In 2022, we anticipate a net income of P48.1 billion,” Mr. Lood said. He expects the stock’s support level at P38.4 and resistance at P43.7 for this week.

For Mr. See, support will be between P40.3 and P38.5 while resistance levels are between P42 and P44.3. — Ana Olivia A. Tirona

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