MHI shares up on better fifinancial results
THE shares of listed nickel miner Marcventures Holdings Inc. (MHI) closed among the top gainers last week, following its reported net income last year after a loss in 2018.
MHI saw its shares close at P1.01 each on Friday, climbing 23.2 percent week-on-week amid the 0.96-percent slip of the Philippine Stock Exchange Index.
AAA Equities Head of Research Chris Mangun said MHI’s recently disclosed full year 2019 net income prompted its doubledigit week-on-week improvement, which also landed it its spot as the top gainer last Friday.
MHI reported a consolidated net income of P37.8 million in 2019, a complete turnaround from the P388.8-million net loss it posted in 2018.
The company attributed the positive earnings to increased nickel tonnage production and reduction of mining and overhead costs.
Mangun also noted that MHI’s shares experienced a spike in trading volume at more than P120 million against the usual less than P10 million.
Diversified Securities Inc. trader
Aniceto Pangan also said MHI’s shares were up on better financial results. He also noted that it saw a strong trading volume last Friday.
Aside from the buoyant financial results, Philstocks Financial Inc. research analyst Japhet Tantiangco said the rise in the price of nickel also helped the rally of MHI’s shares.
Meanwhile, Tantiangco said the recently reported plunge of the country’s second quarter gross domestic product (GDP) would not have much impact on MHI since it is an export-oriented firm.
“[I]ts main market is China so the share’s market performance could be more affected by the economy of the country receiving its exports. So far, China’s industrial sector and its economy are showing signs of recovery and this was also seen to help Marcventures in its rally,” he explained.
Mangun agreed that the dismal GDP figures had little to no effect on mining stocks as sentiment was driven by the all-time high gold prices, along with the government’s lifting of the ban on mining companies that have corrected their lapses.
“This has resulted in rampant speculation, which ignored current economic data. Most mining stocks, including Marcventures, have come from a very low base after being in a downtrend for years,” he said.
Mangun sees MHI’s shares to further climb should there be continued improvement in the sentiment towards mining.
Pangan also said its shares price may continue to move up on the back of the strong volume performance last Friday.
He has set immediate resistance at P1.22, while support is at P1.01 and next support at P0.85 per share.
“The main factor that could boost investors’ sentiment is the continued increase in nickel prices, coupled with the sustain growth in China... [given that] China is the main importer of its nickel ores tonnage,” Pangan noted.
Tantiangco, meanwhile, said MHI’s steep rally last week makes it susceptible to profit taking.
“With this, Marcventures could go below P1 again, which is its current resistance. If so, its trading range is seen to be from P0.80 to P1. If it holds its ground above P1, however, then its trading range is seen from P1 to P1.30,” Tantiangco explained.
He added that MHI, along with the rest of local nickel ore exporters, are seen to be in a good position in the global market given Indonesia’s self-imposed ban on its nickel ore exports.
“To further boost sentiment with the share, we may have to see Marcventures’ positive earnings sustained for the rest of the year. The recovery in China’s economy and the rise of the price of nickel, if they continue, are also seen to help [its] shares moving forward,” Tantiangco said.