Shares close higher on approval of 2007 budget

Xinhua Financial News Service
Last updated 12:31pm (Mla time) 01/30/2007

MANILA, Philippines -- Share prices closed higher Tuesday after Congress ended weeks of debates and finally ratified the 2007 national budget of P1.126 trillion which is expected to spur economic growth as it would allow the government to spend more for infrastructure, education and health this year, dealers said.

The 30-company composite index finished up 19.30 points or 0.6 percent at 3,196.66.

The broader all-share index rose 12.00 points to 1,988.46.

Gainers narrowly led losers 57 to 56, while 47 stocks were unchanged.

Turnover was 1.5 billion shares worth P3.2 billion.

($1 = P49.10)

http://business.inquirer.net/money/breakingnews/view_article.php?article_id=46453

 

BPI profit up 8% on non-interest gains

Xinhua Financial News Service
Last updated 10:39am (Mla time) 01/30/2007

MANILA, Philippines -- Bank of the Philippine Islands posted eight percent growth in earnings last year, driven mainly by higher non-interest income, particularly from securities and foreign exchange trading, fees and charges.

Consolidated net profit last year came in at P9 billion compared to P8.4 billion in the previous year, the country's second largest lender in terms of assets said.

BPI did not provide quarterly results.

"The improvement in net income came mainly from the nine percent growth in total revenues," BPI said in a statement.

Stocks seen to consolidate after sharp price correction

 

 

By EDU H. LOPEZ

Share prices are likely to consolidate after a sharp correction on Friday as expected by investors and fund managers.

"The market finally corrected, falling a staggering 112 points as profit taking overwhelmed the market.," says BPI Securities.

Trading opened weak and never improved. BPI Securities was expecting that the market correction was inevitable and that the degree of the decline was also not surprising given the steepness of the market’s incline in recent trade.

BPI added that Thursday’s trading had already hinted at a market pullback.

Some bargain hunting may be evident given the depths of Friday’s decline, however, any sustainable uptrend may require basebuilding at a lower index level.

With most of the blue chip issues prone to a correction and likely to remain flattish after reaching all time highs, expect second and third-line issues to hug the limelight, says analyst Erwin Balita of AB Capital Securities.

"Already we’ve seen rotational buying into smaller cap issues that have potential after the market consolidated," he added.

Benpres Holdings Corp. (BPC) has underperformed during the market’s run up and is likely to catch up given Meralco’s surge above P60 per share.

BPC has indirect ownership thru FPH. Balita noted a heavy selling order from a foreign broker since three weeks ago and also has capped its performance and may reverse once supply has run out.

Filinvest Devt. Corp. (FDC) has been stable the past 2 weeks and movement will likely be triggered depending on FLI’s (67 percent subsidiary) listing come Feb. 6. "From what we gathered FLI’s follow on offering abroad received a very good take up," says Balita.

Among the third liners, Geograce Resources (GEO) and Picop Resources (PCP) remained active last week.

GEO disclosed that it has signed a share-for property-swap agreement with Saprolite Mining Inc. for the latter’s mining interest in its 5,503 hectares nickel property in Zambales.

PCP also established a new 52-week high on persistent speculations of a backdoor listing of prospective mining companies.

Balita also noted that last Friday’113-point correction finally ended the market’s one-week streak that brought it seven points shy of 3,300. Share prices finally succumbed to a much-needed break after extending to overheated levels based on technical indicators.

On Thursday’s peak of 3,293, the PSEi registered an 11 percent gain year to date. On a positive note, the correction was most welcome for us as it was attributed not to negative developments but merely to the Dow’s 119-point drop last Thursday.

Bangko Sentral’s decision to leave interest rates unchanged was also a welcome move, as an interest rate cut would’ve been just neutralized by the anticipated correction.

http://www.mb.com.ph/BSNS2007012985795.html

Market seen to rebound this week

By Zinnia B. Dela Peña
The Philippine Star 01/29/2007

 

Share prices are expected to rebound late this week after last week's correction, analysts said.

For the week to Jan. 26, the Philippine Stock Exchange composite index rose 2.5 percent or by 77.64 points to close at 3,162.82 points on Friday.

The market rose for more than a week before it corrected on Friday, falling by 3.43 percent over Thursday's close.

Average daily volume this week fell to P3.79 billion shares worth 3.796 from 3.84 billion shares worth P3.94 billion in the previous week.

"Next week, we should be rebounding. (On Friday), we're just taking a break because we have been up for six sessions," said Allan Araullo of Regina Capital Development Corp.

"We should probably consolidate between 3,150 to 3,200 before moving beyond 3,200. Probably we will be above 3,200 by Thursday or Friday next week, he added.

He attributed the continued bullishness on "the expectations of a credit ratings upgrade for the Philippines, lower interest rates and the stronger Philippine peso."

Jasper Jimenez of BDO Securities Corp said "the correction should continue in the next trading sessions."

"What is critical now is for the market to find its support level before it tests the all-time high which is near the 3,400 level," he added.

"Market players will check if there might be possible follow-through sell-offs given Friday's sharp retreat, although we anticipate some fund managers to take advantage of this weakness to position in their favorite shares," 2tradeasia.com said.

2tradeasia.com said the decline, however, "does not warrant a significant shift in investors' long-term perspective on the Philippines' underlying macroeconomic story."

The extra push to buy will be driven by fund managers' zest for higher portfolio returns, specifically in power/energy, infrastructure, construction, mining and oil exploration, 2tradeasia.com said.

Last week's top gainers was led by PLDT, which reached an all time high of P2,805. The issue gained as much as 10 percent week-on-week.

AB Capital Securities said smaller cap issues are expected to hug the limelight as most blue chip issues are likely to correct or remain flat after reaching all time highs.

The brokerage house said Benpres Holdings Corp. is likely to catch up given Meralco's surge above P60 a share. BPC has indirect ownership in Meralco through First Philippine Holdings Corp.

AB Capital said Filinvest Devt. Corp. (FDC) has been stable the past two weeks and its movement will likely depend on subsidiary Filinvest Land Inc.'s listing of new shares on Feb. 6. — With AFP

 

http://www.philstar.com/philstar/NEWS200701290704.htm

STI plans to list here and abroad

By Max V. de Leon

Reporter

STI announced over the weekend it plans to go public in the third quarter of the year via simultaneous listings at the Philippine Stock Exchange (PSE) and the Stock Exchange of Singapore (SGX).

STI chairman Eusebio H. Tanco told reporters at Friday’s launching of Delos Santos-STI MegaClinic at the SM Megamall that the company is looking at raising up to $30 million from the initial public offering (IPO). The amount is equivalent to 30 percent of the company’s market capitalization.    

The proceeds, Eusebio said, will be used for the company’s future expansion projects since STI is “virtually debt-free.”         

From operating a computer school, STI is now also offering animation, medical transcription, health desk, review center for nurses, overseas deployment of medical personnel and hospital and health care services provider, among others.              

“We might restructure the group to make it more attractive to investors, but I think STI as a company is a viable investment choice for stock market investors,” Tanco said, noting that the current market conditions make it the perfect time to go public.            

In February last year, STI acquired a significant stake in Delos Santos Medical Center, now called the Delos Santos-STI Medical Center.               

The partnership invested P250 million for the MegaClinic, which occupies 2,000 square meters at the fifth level of SM Megamall and is up for public opening on February 5.   

The clinic will be manned by 150 doctors and has five operating rooms, 16 consultation rooms, a big pharmacy and seven centers for different medical fields.     

Despite being situated in a mall, Tanco said the clinic will be open from 7 a.m. to an hour past mall hours and will have its own elevator access. 

Because of competitive consultation rates ranging from P300 to P500, MegaClinic will also seek government accreditation as medical tourism center—apart from being a prime clinic for local patients.         

The clinic provides offices for different health maintenance organization, including Maxicare and Fortune Care, under a joint venture agreement.          

Fortune Care senior vice president Dottie Sibal said the partnership with Delos Santos-STI in MegaClinic gives their members better access to a major clinic that offers a complete range of health care services.     

Currently, Sibal said Fortune Care leads other HMOs in terms of the volume of usage in all Delos Santos-STI facilities.

http://www.businessmirror.com.ph/01292007/companies03.html

Philippine stocks drop most in 8 mos.: World's Biggest Mover

By Ian C. Sayson

Bloomberg

Philippine stocks fell the most in eight months, posting the biggest drop among markets included in global benchmarks. Philippine Long Distance Telephone Co. (PLDT) and Ayala Corp. fell from all-time highs as investors judged recent gains excessive given the outlook for earnings.

 “The market has to take a pause somewhere,” said Jerome Gonzalez, who helps manage about $40 million at PhilEquity Fund in Manila. “This is a healthy pullback. We aren’t seeing any excesses that come with a rally. Share prices can’t just keep on climbing.”

The Philippine Stock Exchange Index plunged 112.37, or 3.4 percent, to 3162.82 at the close, its biggest slide since May 23. The drop pared gains this week to 2.5 percent.

PLDT, the nation’s most profitable publicly traded company, fell P165, or 5.9 percent, to P2,630. Friday’s drop snapped a six-day, 16 percent jump that lifted the stock to a record.

Ayala, the nation’s third-largest company by market value, fell P15, or 2.4 percent, to P610, ending a four-day, 6.8 percent advance. Ayala is trading at 23 times prospective earnings, compared with a valuation of 17 times for the main stock index.

Manila Electric Co.’s Class A shares, equity reserved for Filipinos in the nation’s largest power retailer, lost P3, or 4.2 percent, to P68.50, sliding from its highest since February 2000. Its Class B shares, which have no ownership restrictions, lost P3, or 4.1 percent, to P69.50. Manila Electric shares are trading at 55 times earnings.

Market Retreat

THE index closed Thursday at its highest since March 11, 1997, following a six-day, 7.7 percent rally. That’s the second-biggest gainer in that period among 82 global stock benchmarks tracked by Bloomberg News.

Friday’s fall was triggered in part by the declines in the Standard & Poor’s 500 Index and the Dow Jones Industrial Average, according to Jonathan Ravelas, market strategist at Banco de Oro in Manila. Both US measures tumbled the most since November after energy and pharmaceutical companies reported quarterly results that disappointed investors and existing home sales dropped more than economists forecast.

 “Friday’s retreat is what the market has been looking for,” said Ravelas. “There has been a significant shift from risk-free assets to stocks and this is a good reminder of the risks associated with stocks.”

Interest Rates

BANKS and property stocks fell after the central bank Thursday kept its key interest rate unchanged, signaling policy makers are still concerned over inflation.

Bank of the Philippine Islands, the nation’s most profitable lender, fell P2, or 2.8 percent, to P69.50, its biggest decline in more than a month. Metropolitan Bank & Trust Co., the nation’s largest lender by asset, fell P3 pesos, or 5 percent, to P57, its largest drop since August 2.

Ayala Land Inc., the nation’s largest builder, fell 75 centavos, or 4.5 percent, to P16, its biggest loss since August 2. Robinsons Land Corp., the nation’s second-largest shopping mall operator, lost 50 centavos, or 3.1 percent, to P15.75. after climbing 6.6 percent Thursday.

Shares worth P3.78 billion were traded, 39 percent more than the six-month daily average. Losers outnumbered gainers 89 to 32, with 43 stocks unchanged in the broader market.

DMCI Holdings Inc., the nation’s largest construction company, fell 20 centavos, or 2.8 percent, to P6.90, rounding a 6.8 percent four-day loss on speculation earnings per share will fall. The company may sell as much as 2.5 billion of stock this year for expansion, according to its president, Isidro Consunji. Petron Corp., the biggest of the nation’s two oil refiners, rose 10 centavos, or 2.4 percent, to P4.20 after USB AG’s Philippine unit reiterated its buy rating for the stock.

The drop in global crude prices, which have declined 29 percent in the past six months, could trigger an increase in Petron’s earnings, Jody Santiago, head of research at USB’s Philippine unit, said.

http://www.businessmirror.com.ph/01292007/companies02.html

Startup offers outsourced analytics to SMEs

By Alexander Villafania
INQUIRER.net
Last updated 02:10am (Mla time) 01/28/2007

NEWLY formed business analytics firm Infinite Intelligence is expecting a surge in demand for business intelligence in the Philippines.

In particular, the market for outsourced analytics has major potential in the country as many small- to medium-scale enterprises would also look to use business intelligence to improve their overall performance.

Business intelligence refers to the use of data-analyzing technologies to help companies know their entire business on a comprehensive scale and also to help them come to better decisions.

A subset of business intelligence is analytics which predicts the company's direction based on past performances.

Users of business intelligence and analytics are companies with large customer bases who want to monitor customer buying behavior.

Infinite Intelligence is a subsidiary of Pan Pacific Computer Center, a part of the Yuchengco-owned holding company iPeople Inc.

Infinite Intelligence President John Alabastro said continued growth among SMEs is prompting some companies to use business intelligence analytics to grow even further. However, many SMEs forego spending on costly hardware and software to build their own business intelligence infrastructure.

"This is where we come in; our customers would only need to give us their raw data and we'll do the analysis for them. We assure full security compliance to protect their data," Alabastro said.

Infinite Intelligence primarily uses the SAS analytics software, usually used by large enterprises for their customer analytics.

Under their service, a customer gives them raw data in the form of a database from customer relations management and purchasing, which would be analyzed both via software and their professional statisticians.

Depending on how much data is given to them, they may provide analyses within six months.

Alabastro said the main market for their services are the local SMEs who want to use business analytics at a fraction of the cost.

"We hope to have clients who have large customer base. They could be in the retail business, insurance, banking and pharmaceuticals," Alabastro said.

http://technology.inquirer.net/infotech/infotech/view_article.php?article_id=46006

Financial advisory firm eyes IPO

By Zinnia B. Dela Peña
The Philippine Star 01/27/2007

 

Pikeville Resources Inc., a financial advisory and management services firm, is planning to raise P7.8 million from an initial public offering (IPO) of shares to fund working capital requirements.

Listed as officers and directors of Pikeville are Reynaldo Reyes who serves as chairman and president, Lapanday Holdings chairman Martin Lorenzo (vice-chairman), Rene Benitez (executive vice-president), Gilbert Garchitorena and Andres Del Rosario.

Based on the registration statement filed with the Securities and Exchange Commission (SEC), Pikeville is selling a total of six million common shares at P1.30 each. The shares will be listed on the small and medium enterprise board of the Philippine Stock Exchange (PSE).

The company's planned IPO has already been cleared by the SEC Thursday while its listing application is still pending approval by the PSE.

Tapped as lead underwriter for the offering is Abacus Capital & Investment Corp.

Pikeville is a service-oriented entity tapping into new markets such as business process outsourcing and the call referrals system. It has done several projects with Fortman Cline Australasia, which offers transaction advisory services to Australian companies.

The company has an authorized capital stock of 15 million shares, 17.114 million of which are issued and outstanding.

Out of the expected proceeds, P4.47 million will be used to fund working capital requirements, P1.22 million will be channelled to business development and P600,000 for training and development.

As of end-September 2006, Pikeville reported a net profit of P528,400 on revenues of P3.34 million.

Operating income amounted to P490,300.

The company had assets of P27.94 million as against liabilities of P5.35 million.

 

http://www.philstar.com/philstar/NEWS200701270707.htm

RP property values can increase 35%

January 26, 2007
Updated 23:58:27 (Mla time)
Tessa Salazar
Inquirer

A SENIOR economist of the Global Property Guide, advised Philippine property buyers to consider the long term whenever they’re making their choices. And by the long term, it’s envisioning where they want to live or work, or retire 10 to 20 years from now.

Prince Cruz pointed out to the Inquirer that most developers will sell lands and plots with a “nature view.” However, the area might be “green” for now simply because there are no other houses.

“Always try to imagine what the place will look like if there are a thousand more like you buying a house in that area. The green, refreshing view would probably be lost,” Cruz said.

He stressed that there are also huge costs attached to buying and selling houses.

“In the Philippines, it can reach up to 35 percent of the property value, one of the highest in Asia. Because of this cost, houses, in effect, carry a ‘No Return No Exchange’ tag. Unlike other goods that carry a service warranty, houses don’t. Once turned over, all the costs for fixing and repairing the house will be paid by the new owner,” Cruz said.

Floods

Cruz warned buyers “not take their agent’s words as gospel truth.”

If the agent says that it never floods in that area, you cannot complain to him/her if it actually does when you start living there.

There are also no guarantees if the agent promises that the neighborhood is safe, and that a new church, school, MRT and mall will be built nearby in the foreseeable future.

The agent might also promise you that your prospective house’s value will increase tenfold within a few years. Again, there are no guarantees. Experience from the Asian crisis shows that the value of luxury condominiums in the Philippines fell by more than 50 percent from 1997 to 2004 (http://globalpropertyguide.com/ articleread.php?article_id=85&cid =4).

Travel time

“The amount of travel time stated in most property developers’ brochures are also often underestimated. It might be a 30-minute drive from Ortigas to Antipolo City, if and only if there is absolutely no traffic (which happens only during Good Friday). Commuting time should be considered instead. Even if you have a car, not all your friends and relatives do,” Cruz said.

It is also wise for the buyer to visit the house several times in different days and at different times of the day. The quiet neighborhood that you first visited might be dusty and smoke-filled during peak traffic hours or noisy and unruly on weekends.

Cruz cautioned buyers that other warnings that might be downplayed by your agent or developer are the risks of earthquake, landslides and flood.

Least efficient

A news release by Global Property Guide last week pointed out that the Philippine housing market is Asia’s least efficient. Exceptionally high tax, transaction and other costs discourage the provision of housing, and the Philippines’ house price to income ratio is very high, in comparative terms.

“The market cannot efficiently provide housing, if it is saddled with unnecessary costs,” Cruz said. “In the Philippines, the round-trip transaction costs of buying and selling a property can easily reach 35 percent of the property value because of the 12 percent VAT. This is on top of the 6 percent capital gains tax and 5 percent agent’s fee.”

Study

In a study involving a detailed comparison of housing purchase costs in Asia, the Global Property Guide found a clear correlation between high transaction costs and unaffordable housing (measured by house-price-to-income ratios).

Global Property Guide indicated that countries with high transaction costs tend to have expensive houses and large slum populations. The Philippines comes out bottom-of-class in the entire region.

The news release pointed out that in Manila, Jakarta, Shanghai and Seoul condominium prices are much higher (measured by house-price-to-income ratios) than in developed countries. It stated that house-price-to-income ratios are generally regarded as the best measure of housing affordability.

The Philippine government’s tax-everything-in-sight policy helps no one, according to the Global Property Guide. “To avoid the capital gains tax, at present most buyers in the Philippines bribe tax assessors to lower the appraised value of the property. This doesn’t help the government collect taxes,” Cruz said in a news statement.

“International experience suggests that reducing transaction taxes actually increases compliance and the government’s tax-take.”

Global Property Guide also stressed that the Philippines’ outdated cadastral system also greatly increases legal costs, the report adds. Only 10 million of the Philippines’ estimated 25 million land parcels are registered. It is estimated that it will take 75 years before complete titling coverage is achieved.

The Philippines also has the highest number of procedures involved in registering property, followed by Indonesia and South Korea. Both these factors increase legal and estate agent’s costs, especially for high-end properties where the risks are higher.

http://services.inquirer.net/express/07/01/27/html_output/xmlhtml/20070126-45866-xml.html

Index retreats 112 pts on Wall St losses, profit taking

The Philippine Star 01/27/2007

 

Share prices closed sharply lower yesterday, falling 3.43 percent lower as losses on Wall Street sparked a regional sell-off and with investors opting to take profits after a week-long rally, dealers said.

However, they said the market’s sharp downturn had been expected as many stocks had become expensive.

The composite index fell 112.37 points to 3,162.82 after moving between 3,161.95 and 3,262.54.

The broader all-shares index was down 48.13 points to 1,967.92.

Losers beat gainers 89 to 32 with 43 stocks unchanged.

Volume amounted to 3.4 billion shares worth P3.7 billion.

"Following the consecutive run-up in recent sessions, the market is just ripe for a healthy correction," said Grace Cerdenia of 2TradeAsia.

"There is no other big news other than Wall Street’s fall that would warrant a fundamental shift by investors with regard to the country’s macro-economic prospects," she added.

"The decline on Wall Street and its subsequent effect on Asian markets gave impetus for investors, especially for short-term players, to lock profits on recent gains," said Jasper Jimenez of BDO Securities Corp.

Top-traded SM Investments Corp fell P20 to P370.

Philippine Long Distance Telephone Co. (PLDT) retreated P165 to P2,630, extending the losses of its New York-traded American Depositary Receipts.

Its rival, Globe Telecom Inc., was down five to P1,290.

Metropolitan Bank and Trust Co edged down three to P57 while Bank of the Philippine Islands fell two to P69.50.

Conglomerate Ayala Corp. also fell P15 to P610 while its unit Ayala Land Inc. declined 75 centavos to P16.

Food and beverage giant San Miguel Corp. saw both its A and B shares holding steady at P63 and P75, respectively.

"The market has to take a pause somewhere," said Jerome Gonzalez, who helps manage about $40 million at PhilEquity Fund in Manila. "This is a healthy pullback. We aren’t seeing any excesses that come with a rally. Share prices can’t just keep on climbing."

Yesterday’s fall was triggered in part by the declines in the Standard & Poor’s 500 Index and the Dow Jones Industrial Average, according to Jonathan Ravelas, market strategist at Banco de Oro. Both US measures tumbled the most since November after energy and pharmaceutical companies reported quarterly results that disappointed investors and existing home sales dropped more than economists forecast. — AFP

 

http://www.philstar.com/philstar/NEWS200701270703.htm

Stocks continue bullish trend

By Ian C. Sayson

Bloomberg

Philippine stocks advanced for a sixth day to the highest in almost a decade after imports rose at the fastest pace in three months and Congress moved closer to approving the government’s budget proposal.

Philippine Long Distance Telephone Co. (PLDT), Megaworld Corp. and Manila Electric Co. gained on speculations that higher import growth and the approval of the budget will boost the economy.

Ayala Corp. advanced to its highest ever, joining 20 other stocks that climbed Thursday to their highest in at least 52 weeks.

“The growth in imports goes hand in hand with the approval of the proposed budget,” said Aldrin Navarro, who helps manage about $4.7 billion at BPI Asset Management Inc. “They point to an expanding economy.”

The Philippine Stock Exchange Index added 30.44, or 0.9 percent, to 3275.19 at the close in Manila, after climbing 6.7 percent in the previous five days. The measure, which hasn’t closed higher since March 11, 1997, gained as much as 1.5 percent earlier Thursday.

Philippine import growth quickened in November to 13.4 percent, a three-month high, as manufacturers purchased more raw materials for exports, supporting the government’s forecast that overseas sales may rise at a faster pace in 2007.

Separately, a congressional panel approved the P1.13-trillion budget the government submitted for this year. The spending proposal is 18-percent bigger than the P955 billion authorized in 2006. The government forecasts economic growth will range from 6.1 percent to 6.7 percent this year.

PLDT, the nation’s most profitable publicly listed company, added P55, or 2 percent, to P795, extending a five-day, 14 percent climb that lifted it to a record Wednesday.

Spending on infrastructure

MEGAWORLD, the nation’s largest builder of office and residential towers, rose 2 centavos, or 0.8 percent, to P2.48, its highest close since April 8, 1997. Ayala, owner of the nation’s most profitable lender, gained P5, or 0.8 percent, to P625, its highest close ever.

Manila Electric’s Class A shares, equity reserved for Filipinos in the nation’s largest power retailer, added P2, or 2.9 percent, to P71.50, bringing this week’s gain to 13 percent. Its Class B shares, which have no ownership restrictions, gained P1, or 1.4 percent, to P72.50.

“Investors are looking forward to government starting to spend on infrastructure,” Navarro said. “This will benefit construction and cement companies. It will also trickle down to the other parts of the economy.”

The government plans to spend at least P800 billion for infrastructure projects, including roads and bridges, through 2010, Finance Undersecretary Robert Tan said last week.

EEI jumps

HOLCIM Philippines Inc., the nation’s largest cement-maker, added 10 centavos, or 1.2 percent, to P8.50, its highest close since April 7, 1997. Southeast Asia Cement Holdings Inc. climbed 4 centavos, or 3.2 percent, to P1.30, bringing this year’s gain to 31 percent.

First Philippine Holdings Corp., which is expanding a toll-road project, advanced P1, or 1.4 percent, to P72.50. Benpres Holdings Corp., owner of First Holdings, gained 10 centavos, or 3.9 percent, to P2.70

EEI Corp., the second-largest Philippine construction company by value, jumped 15 centavos, or 3.6 percent, to P4.35, its highest since August 28, 1996. The stock has advanced 38 percent this year.

Shares worth P4.85 billion were traded, 79-percent more than the six-month daily average. Gainers beat losers 76 to 34, with 65 stocks unchanged in the broader market.

Separately, Robinsons Land Corp., the nation’s second-largest shopping mall operator, rose P1, or 6.6 percent, to P16.25, its highest in almost four weeks. The builder said Wednesday after trading closed that profit in the year ended September 30 grew 40 percent to a record P1.72 billion on higher sales.

http://www.businessmirror.com.ph/0126&272007/companies02.html

Shares close sharply lower on profit-taking, Wall St retreat

January 26, 2007
Updated 12:31:11 (Mla time)
Rocel Felix
Xinhua Financial News Service

MANILA, Philippines -- Shares prices closed sharply lower after investors locked-in gains from the rally of the past six sessions, with caution also setting in after the steep fall on Wall Street overnight, dealers said.

They said the market's sharp downturn, led by Philippine Long Distance Telephone Co, had been expected as many stocks had become expensive.

The 30-company composite index fell 112.37 points or 3.43 percent to 3,162.82, after moving between 3,161.95 and 3,275.19 .

It was up 2.5 percent from the previous week.

The broader all-shares index was down 48.13 points to 1,967.92.

Losers whipped gainers 89 to 32, while 43 stocks ended unchanged.

A total of 3.4 billion shares were traded worth P3.7 billion.

($1 = P49.06)

 

Shares close sharply lower on profit-taking, Wall St retreat

January 26, 2007
Updated 12:31:11 (Mla time)
Rocel Felix
Xinhua Financial News Service

MANILA, Philippines -- Shares prices closed sharply lower after investors locked-in gains from the rally of the past six sessions, with caution also setting in after the steep fall on Wall Street overnight, dealers said.

They said the market's sharp downturn, led by Philippine Long Distance Telephone Co, had been expected as many stocks had become expensive.

The 30-company composite index fell 112.37 points or 3.43 percent to 3,162.82, after moving between 3,161.95 and 3,275.19 .

It was up 2.5 percent from the previous week.

The broader all-shares index was down 48.13 points to 1,967.92.

Losers whipped gainers 89 to 32, while 43 stocks ended unchanged.

A total of 3.4 billion shares were traded worth P3.7 billion.

($1 = P49.06)

 

Philippine stocks climb for fifth successive day

By Ian C. Sayson

Bloomberg

PHILIPPINE stocks rose for the fifth successive trading day Wednesday and continued to lift the index at its highest in almost a decade. Speculations by market players remain strong that record-low bond yields will boost demand for shares.  

“The drop in bond yields and a low interest-rate environment will spur people to go to equities,” said Rico Gomez, who helps manage about $1 billion at Rizal Commercial Banking Corp. “Low fixed-income returns will make dividend-paying stocks look very attractive.” 

Ayala Land Inc. and Bank of the Philippine Islands gained on speculation lower interest rates will spur demand for homes and loans. The value of shares traded is the highest in six weeks.                       

The Philippine Stock Exchange Index added 45.41, or 1.4 percent, to 3244.75 at the close, extending a four-day, 5.2-percent advance. It hasn’t closed higher since March 13, 1997. The measure fell as much as 0.3 percent earlier Wednesday.                

Philippine Long Distance Telephone Co.(PLDT), the nation’s largest company by market value, added P20, or 0.7 percent, to a record P2740. Ayala Corp., the nation’s third-largest company by market value, added P20 or 3.3 percent, to P620, its highest ever.

Ayala’s dividend payment has grown 26 percent in five years. The shares are among the 22 stocks Wednesday that climbed to at least their 52-week highs.          

“With returns from fixed income declining, investors are more and more choosing stocks that are good in paying dividends,” Gomez said.

‘Good’ for Mortgages

THE yield on the 91-day Treasury bill, which banks use as a benchmark for loan rates, dropped to a record 3.171 percent at a government auction this week. The yields of the 182-day bill and the 364-day bill also fell to records. 

Class A shares of Manila Electric Co., equity reserved for Filipinos in the nation’s largest power retailer, surged P3, or 4.5 percent, to P69.50, to the highest close since February 23, 2000. Its Class B shares, which have no ownership restrictions, advanced P3.50, or 5.2 percent, to P71.50, bringing this year’s advance to 30 percent.               

Meralco, as the power retailer is known, next month will pay its first dividend in seven years. The company will pay P1.01 billion or P1 a share in dividends.            

Aboitiz Equity Ventures Inc., which has investments in power, banking and transportation, climbed 40 centavos, or 4.4 percent, to a record P9.60, extending this year’s gain to 37 percent. Aboitiz is set to pay its biggest ever dividend, 20 centavos a share, on February 23.     

Ayala Land, the nation’s biggest developer, gained 25 centavos, or 1.5 percent, to P16.75, after climbing as much as 6.1 percent. Bank of the Philippine Islands, the most profitable lender, climbed P1, or 1.4 percent, to P71.50, its highest ever.   

“Low interest rates will be good for home purchases and demand for loans,” said Mark Canizares, an analyst with CitisecOnline in Manila.  

Metropolitan Bank & Trust Co., the nation’s largest lender by assets, added P1, or 1.7 percent, to P60, bringing this year’s gain to 17 percent. Robinsons Land Corp., a builder of residential towers, gained 25 centavos, or 1.7 percent, to P15.25, its first climb in six days.               

Megaworld Corp., the nation’s largest builder of residential and office condominiums, surged 12 centavos, or 5.1 percent, to P2.46, its biggest gain since December 12.  

Megaworld’s share price may advance to P2.90 a share in the next 12 months, compared with a previous P2.20 forecast, on expectation that it will offer 25-year financing for all its residential projects, CitisecOnline said in a note Wednesday.     

Shares worth P6.24 billion were traded, more than double the six-month daily average and the biggest since December 13. Gainers outnumbered losers 67 to 49, with 49 stocks unchanged. The measure fell as much as 0.3 percent earlier Wednesday.

http://www.businessmirror.com.ph/01252007/companies02.html

Shares close higher on expectations of interest rate cut

January 25, 2007
Updated 13:37:27 (Mla time)

Xinhua Financial News Service

MANILA, Philippines -- (UPDATE) Share prices closed higher for the sixth straight session after expectations of a cut in interest rates encouraged bullish investors to continue to snap up select stocks, dealers said.

Dealers said buying had also been spurred by the rise in merchandise imports in November, an indication that exports would continue to be steady in the coming months.

At the close, the 30-company index was up 30.44 points or 0.94 percent at 3,275.19, after moving between 3,254.53 and 3,292.84.

The broader all-shares index was up 17.80 points at 2,016.05.

Gainers beat losers 76 to 34, while 65 stocks ended unchanged.

Volume was 2.3 billion shares worth P4.8 billion.

Dealers said strong fund inflows chased select blue chips led by market heavyweight Philippine Long Distance Telephone Co. (PLDT) and SM Investments Corp.

"There's too much money chasing too few index issues at the moment. Foreign investors are evidently very bullish about the Philippines, and their interest extends to issues outside of the main index," said James Lago, research head of Westlink Global Equities Inc.

"Expectations of a cut in the central bank's key interest rates drove investors to buy stocks. Positive developments in several corporates also inspired buying, with the play focused on select stocks," said Chelsea Dipasupil, research head of RCBC Securities Inc.

Dealers said investors are optimistic the central bank will cut its key interest rates when its monetary board meets this afternoon.

They said a rise in the country's merchandise imports in November also fuelled buying.

The National Statistics Office said imports in November grew 13.4 percent from a year earlier to $4.508 billion, after rising 12.5 percent in the previous month, driven mainly by increased orders for electronics and fuel products.

"November imports were much stronger than expected, which produced a wider-than-expected trade deficit. The fastest pace of import growth in three months is a hopeful sign for future exports; two-thirds of imports are used in electronic exports," said Tim Condon, economist at ING Financial Markets Research.

Top-traded PLDT finished P55 higher or 2.01 percent at P2,795, after its New York-traded ADRs gained $1.57 to $56.27 overnight, while its rival Globe Telecom Inc. rose P10 or 0.78 percent to P1,295.

SM Investments Corp. rose P20 or 5.41 percent to P390.

Ayala Corp. was up P5 or 0.81 percent at P625.

Manila Electric Co.'s A shares rose P2 or 2.88 percent to P71.50 while its B shares advanced P1 or 1.4 percent to P72.50.

($1= P48.88)

http://services.inquirer.net/express/07/01/25/html_output/xmlhtml/20070125-45588-xml.html

Robinsons Land gains P1.7B in net profit

By Honey Madrilejos-Reyes

Reporter

LISTED Robinsons Land Corp. (RLC) reported a 39.5-percent jump in net profit for the fiscal year ending September 2006 to P1.718 billion versus P1.231 billion in 2005, the company said in a statement Wednesday. Gross revenues also improved by 29.7 percent to P6.643 billion from the previous year’s P5.119 billion.

RLC president and chief operating officer Frederick D. Go attributed the higher figures to the combined strengths of all the company’s business divisions, namely, commercial centers, high-rise buildings, housing and land development and hotels.  

“All our business units performed very well as a result of the strategic initiatives we have pursued in recent years. Each business unit has expansion programs that will grow our investment property portfolio in malls, offices, and hotels as well as increase our real-estate sales of condominiums, subdivision land and houses,” Go said.     

The commercial centers division, which develops, leases and manages RLC’s shopping malls all over the country, contributed nearly half of the revenue at P3.22 billion. RLC is majority-controlled by the Gokongwei group.  

In its fiscal 2006, RLC was operating 18 shopping malls—six in Metro Manila and 12 in other urban areas throughout the Philippines. Five of its malls now house call centers and business process outsourcing (BPO) operations, a new development in the company’s business environment that is expected to grow significantly in the next few years.             

The company is now constructing The Midtown Wing, an expansion area in Robinsons Place Manila; Robinsons Place Otis 888, a strip mall fronting a residential development; and Robinsons Place Dumaguete. It would soon start the construction of malls in Bulacan and Tagaytay as it continues to search for ideal locations in key Metro Manila and provincial areas nationwide. 

Meanwhile, the office and residential buildings division posted a 90-percent growth in revenues at P2.03 billion.     

Go said their office buildings have attracted top players in the BPO industry, while its residential condominiums are doing very on strong domestic and international demand.             

“Robinsons Cybergate Center 2 is now operational and will contribute to the rental revenue generated by office spaces owned by RLC in Robinsons Cybergate 1, Robinsons Summit Center, Robinsons Equitable Tower and Galleria Corporate Center,” Go said. The company’s total office area portfolio in the buildings division alone now stands at 120,000 square meters.”              

Strong domestic sales and the rapid expansion of its international marketing operations from North America, Europe and the Middle East, have boosted preselling efforts of residential condominiums and other upper-middle class products developed by the division.          

The housing and land development division, on the other hand, reported revenues of P488 million, a 9 percent growth over the previous year. It develops and sells low- and middle-cost residential lots and houses.    

The hotels division registered a major turnaround in 2006. Gross revenues totaled P904 million, up 81 percent from 2005, primarily due to the full operation of the deluxe 260 room Crowne Plaza Hotel within the Galleria Complex.         

As of September last year, RLC’s hotels division had an average occupancy rate of 68 percent. Apart from Crowne Plaza, the other hotels operated by the company are Holiday Inn Galleria Manila, Cebu Midtown Hotel; and Robinsons Apartelle.  

At the end of the fiscal year, the company relaunched its shares in an international equity offering. A total of 932.8 million shares were offered to both local and international buyers, generating $223 million.

For fiscal year 2007, RLC said it would spend around $111 million to fund various projects. The proposed capital expenditure would be funded by the proceeds from its follow-on offering.

http://www.businessmirror.com.ph/01252007/companies01.html

Opinion: Fear and greed at the PSE

There is an old stock market axiom that “prices climb a wall of worry.” The sense is that prices go higher when there is a background of negative sentiment and attitude.

And when prices are rising without negative noise, we invent the gloom and doom. For example, yesterday’s preopening comments in the newspapers sounded something like this from the Philippine Star: “The stock market is looking for fresh leads such as interest rate or foreign exchange movements to determine the direction of trading this week, analysts said.”

The Philippine Stock Exchange closed at a 10-year high yesterday, up 56 points to 3,141. After-closing comments from the “experts” referred to the same general “the economy looks good.” Notice that there were no “fresh leads” specifically related to interest rates or foreign exchange that propelled the market higher. Yesterday’s upswing was a continuation of the last six months’ bull market.

No matter how many times I express a positive outlook here in BusinessMirror or on television, I am still asked about those factors that could bring the market lower. I feel compelled to offer something more substantial than simply saying “nothing.” I am running out of answers like “war against Iran” or an attack on Taiwan by China, having almost reached the point of talking about UFOs occupying the floor of the exchange.

Normally I would be concerned about comments like this from one local stock analyst: “There is no negative news that could spoil the momentum at this point.” However, I know well enough that there will be enough skeptics out there that will keep the negative background noise alive and keep share prices rising higher.

Why do prices climb a “wall of worry” and why would we want the “gloom and doom” crowd to continue to wail and gnash their teeth?

There are two players in the stock market: buyers and sellers. These two participants are motivated by greed and fear, respectively. Buyers believe that stock prices will never be any lower than they are today, greed and optimism; sellers believe that prices will never go any higher, fear and pessimism.

However, there is a third emotion beyond greed and fear that also dominates the market and that is “worry.” “Worry” attacks both buyers and sellers and has to do with the concern that they might have been late in acting on their respective greed and fear. Yesterday’s trading action provided a textbook example of stock-market emotions and how they move the market.

Prices opened up slightly and there were “no fresh leads.” Sellers came in, worrying that they might miss the opportunity to get out at prices that would not go any higher. A little after 10 a.m., the market stretched to the psychologically important 3,100 level on the PSE index. Again, sellers rushed in fearing that 3,100 would be the top. Buyers, at the same time, were greedy, wanting to take positions before the 3,100 was breached.

An hour later, once again fear gripped the holders of shares as the market seemed stuck at 3,100, seemingly not wanting to go higher. Besides, sellers thought, how can prices go higher when there are no fresh leads? With the index at 3,110 at 11:15 a.m., the sellers’ fear took over the market. All morning long, the market climbed a wall of worry, primarily the “no fresh leads” angle, from 3,085 to 3,110. Then the seller’s emotion of fear stepped to the sidelines and the buyer’s greed enters the scene.

Having broken firmly through the 3,100 level, now the buyers started to get very greedy and very worried about missing the rally. The last 45 minutes of trading saw prices move in one direction: up. The index rose from 3,110 to close at 3,141. The market staggered to move all morning long to gain 25 points to see a 30-point gain in less than an hour’s trading.

Understanding stock market price movement is not always about the numbers. It is always about the buyers and sellers and what their emotional motivations are at any given time. 

E-mail comments to mangun@email.com.

 

http://www.businessmirror.com.ph/01232007/opinion02.html

Stock index climbs to 10-yr high

By Ian C. Sayson

Bloomberg

THE Philippine stock index advanced for a fourth day Tuesday, rounding off the longest winning streak in more than two months. Winning shares gained on speculation that borrowing costs will fall after bond yields fell to record lows.    

“Interest cost savings from the decline in rates will help boost corporate margins,” said Jenny Ting, who helps manage about $4.7 billion at BPI Asset Management Inc. “Consumers may be encouraged to spend more and buy homes.”

Philippine Long Distance Telephone Co. (PLDT), the nation’s largest company by market value, advanced to a record for the second day after unit PhilWeb Corp.’s sports betting contract with Singapore’s RealTime Gaming (Asia) Ltd. was approved by the Philippine government.        

The Philippine Stock Exchange index added 58.06, or 1.9 percent, to close at 3,199.34, its highest since March 31, 1997. The measure, a basket of 33 stocks, last posted four consecutive gains in the period ended November 3.               

Ayala, owner of the nation’s biggest property developer, its most profitable lender and No. 2 mobile phone company, gained P5, or 0.8 percent, to P600. SM Prime Holdings Inc., the nation’s largest shopping mall operator, rose 50 centavos, or 4.4 percent, to P12.

The yield on the 91-day T-bill, which banks use as a benchmark for loan rates, dropped to a record 3.171 percent Monday at the government’s second auction of the securities this year. The yields of 182-day and 364-day T-bills also fell.

Lower Rates

“LOWER rates are positive for the market overall,” said Gilbert Lopez, an analyst at the Manila unit of Macquarie Securities. “The continued drop in Treasury bill rates comes on the back of the government’s improving fiscal position, the slowdown in inflation and stronger economic fundamentals.”

Metropolitan Bank & Trust Co., which is offering 25-year loans for home purchases, climbed 50 centavos, or 0.9 percent, to P59, its highest since October 20, 1999. Security Bank Corp., a rival lender that’s offering 25-year mortgages, jumped P4, or 5.7 percent, to P74, its biggest gain since October 25.  

SM Investments Corp., which owns the nation’s largest department stores and groceries, gained P5, or 1.4 percent, to P352.50, after climbing 3.7 percent Monday. The stock paid 34 percent more in dividends last year.       

“Investors are buying those shares that still provide value either through dividends or potential price appreciation, even after the market’s recent gains,” Ting said.

Dividends

CLASS A shares of Manila Electric Co., equity reserved for Filipinos in the nation’s largest power retailer, gained 50 centavos, or 0.8 percent, to P66.50, its highest close since February 24, 2000. Its Class B shares, which have no ownership restrictions, rose P1, or 1.5 percent, to P60 pesos, bringing this year’s advance to 24 percent. Meralco, as the power retailer is known, will pay next month its first dividend in seven years while SM Investments will probably pay a higher dividend this year after increasing its payout by 34 percent in 2006.

PLDT, the nation’s largest phone company, surged P120, or 4.6 percent, to P2,720, after an 8.1-percent, three-day climb that lifted it to a record Monday.   

PhilWeb, 26-percent owned by PLDT, said the contract allows it and RealTime Gaming to run betting operations in the Philippines for all North American sports, including basketball and golf.               

PhilWeb, also an Internet service provider, gained 0.1 centavo, or 2.9 percent, to 3.5 centavos, after gaining as much as 8.8 percent in earlier trading.    

Petron Corp., the nation’s largest oil company, advanced 5 centavos, or 1.2 percent, to P4.20. Royal Dutch Shell Plc, Europe’s second-largest oil company and Petron’s biggest rival, canceled a proposal to expand a refinery in the Philippines because of high construction costs, the spokesman for the local unit of Shell said Monday after trading closed.             

Shares worth P3.84 billion were traded, 44 percent more than the six-month daily average. Losers beat gainers 64 to 53, with 54 stocks unchanged in the broader market.

http://www.businessmirror.com.ph/01242007/companies02.html

Universal Robina net income reaches P3B in fiscal year 2006

By Honey Madrilejos-Reyes

Reporter

UNIVERSAL Robina Corp. (URC), the food unit of the Gokongwei-controlled JG Summit Holdings, made a net income of P3.018 billion in its fiscal year 2006, up 19.5 percent from P2.526 billion a year earlier, the company said Tuesday in a disclosure to the Philippine Stock Exchange.            

Net sales and services also grew to P35.183 billion from 2005’s P31.199 billion as the net sales of the company’s branded consumer foods improved to P26.6 billion.      

“This increase was primarily due to an 11.4-percent increase in net sales of URC’s international operations and 12-percent increase in net sales from domestic operations,” the company said.         

The business volume increase of domestic consumer foods came from the tremendous growth of beverages like coffee and tea. Sales of its other core product categories like snacks, candies and chocolates have also registered favorable sales performances.              

For its agro-industrial operations, net sales amounted to P5.1 billion in the fiscal year ending September 30, up by P867.9 million  from P4.2 billion recorded a year earlier. The increase largely came from the animal feeds business, which reported a net sales increase of 40.9 percent at P2.2 billion.              

“The major driver for the favorable result is the continuous success of its Uno and Stargain hog feeds in terms of market coverage and positive feedback on marketing undertakings to establish brand equity,” URC said. “Likewise, livestock business improved its revenue by 8.6 percent due to higher sales volume for both piggery and poultry products.”   

Sales of URC’s commodity foods also improved by 9.5 percent to P3.5 billion from P3.2 billion in the same period in 2005, because of higher net sales in the company’s sugar business.  

URC is 59.16-percent owned by JG Summit which, apart from making snacks, is also engaged in air transportation, telecommunications, petrochemical, property development and textile businesses.

http://www.businessmirror.com.ph/01242007/companies01.html