ePLDT's unit SPi earmarks 5 bln pesos for expansion

 

 

MANILA (XFN-ASIA) - SPi, the business process outsourcing (BPO) subsidiary of ePLDT, has earmarked 5 bln pesos for its expansion program this year, SPi said. The company said in a written statement that it planned to acquire more interests in the health care business, add to the lines of business of its publishing and legal groups, and to establish a foothold in the finance and accounting industries. SPi president and chief executive Ernest Cu said: ''The significant capital outlay that has been allocated for expansion will allow us to broaden our capabilities, enter new markets and further migrate from more commodity-based activities to higher-value services.'' This year SPi is opening two new BPO facilities, one in the southern Indian city of Chennai and the other in Hanoi. In the US, it will make investments in systems and infrastructure in the states of New York, Virginia, Texas and Tennessee. ePLDT is the information and communications technology unit of Philippine Long Distance Telephone Co.

 

http://www.mb.com.ph/BSNS2007022087645.html

RCBC posts P2-B net earnings in 2006, up by 23%

 

 

Rizal Commercial Banking Corporation (RCBC), the fifth largest private universal bank in the Philippines, sustained its revenue growth in 2006, posting a 23 percent hike in net income, as it further strengthened its balance sheet. The bank recorded an unaudited net income of P2.011 billion against P1.63 billion in 2005. The growth could be attributed to the bank’s intensified efforts at generating more income from its core lending business and a larger securities portfolio. The robust performance is also highlighted by a 23 percent increase in asset base to P227.3 billion last year compared to P185 billion in 2005. This was buoyed by the growth in financial market assets, as it grew by 44 percent to P61.0 billion, strengthening the bank’s liquidity position. Growth is further complemented by a healthy increase in total deposits to P157.4 billion or 18 percent up from P133.2 billion in the previous year. The new RCBC CEO, Lorenzo V. Tan, credited the management team led by former CEO Rizalino S. Navarro, Corporate Vice Chairman Cesar E. A. Virata and President Francisco S. Magsajo for the bank’s growth. "RCBC’s continued performance excellence is buoyed by their aggressive and concerted efforts to increase the bank’s competitiveness and standing in the industry," he said. Navarro, who recently retired but continues to serve among the RCBC board of directors, said that "the bank has exceeded its targets and we’re optimistic that we will continue to outperform under our new management." RCBC’s aggressive capital buildup towards the last quarter of 2006, with its issuance of $ 100 million hybrid tier 1 securities and P1-billion worth of perpetual but non-cumulative preferred shares, boosted the bank’s capital accounts to P24.5 billion or 85 percent higher than P13.2 billion in 2005. The capital-raising activities have increased RCBC’s capital adequacy ratio (CAR) to over 20 percent from 14 percent in 2005, well above the 10 percent regulatory minimum. RCBC also plans to further pursue its strategic capital buildup by issuing 250 million shares of new common stock through an additional public offering in early 2007. Apart from building its capital base, the bank managed to significantly reduce its non-performing loans and real and other properties acquired (ROPA) through the Special Purpose Vehicle Law and private sales/public auctions of more than P5 billion last year, consistent with the bank’s strategic focus on asset quality. As of end 2006, RCBC had a total of 289 branches, 5 extension offices, and 258 ATM facilities. The bank has plans of further expanding its ATM network and opening new branches in 2007.

 

http://www.mb.com.ph/BSNS2007022087633.html

Not Business As Usual: Lucio Tan is hiring

Lucio Tan is hiring

There’s talk the seven-year intellectual property infringement suit filed by Vazquez Building Systems Corp. against the low-cost housing subsidiary of  Ayala Land Inc. will finally be resolved this April. No, the Ayalas aren’t settling out of court royalty claims that started out at P100 million but which has since gone up to P300 million and counting. At the heart of the IP suit is a prefabricated fence, which can be moved from one project to another. Vazbuilt claims it developed and used the fence in its projects with Laguna Properties Holdings Inc. (LPHI) for several years in the 1990s. LPHI claims the fence it has been using since terminating its relationship with Vazbuilt is different. A lot has happened in the past seven years, of course. The Vazquez siblings have parted ways. LPHI has since been rebranded as Avida Land. LPHI president Manuel Colayco has retired and Avida’s head is Dina Bayangos.  ***  Did you know 1: The minimum weekly wage of Filipino industrial trainees in South Korea will be increased from the current P700 to P727.32 for a 40-hour week and P786.48 for a 44-hour week starting middle of this year. These trainees theoretically earn less than workers directly coursed through the Philippine Overseas Employment Administration. In practice, they may just earn more because of overtime pay and savings from not paying taxes nor board and lodging. On the off side, trainees have only a two-year contract.   Did you know 2: Lucio Tan’s new property company, Eton Properties Phils., is currently on a hiring binge, hiring everyone from agents to mortgage bankers. Applications are being processed at the Allied Bank head office along Ayala Avenue. Oh, Eton’s president is Danilo Ignacio, an ex-Citibanker previously involved with the construction of the Philam Tower in Makati and the high-rise buildings of John Gokongwei’s Robinsons Land Corp.   Did you know 3: One of the first things Intellectual Property Phils. director general Adrian Cristobal Jr. did after arriving from a month-long working stay in Australia was to open an art gallery called Alab at the ground floor of the IP Building. The gallery is the first to be built inside an IP office in Southeast Asia.  ***  Despite aggressive preselling to Filipino Americans for the past two years, construction in the former Metropolitan Club outside Rockwell Center has been limited to a huge hole that could qualify as the country’s deepest swimming pool in the future. The residential condominium project was one of the babies of RFM Corp. president and chief executive officer Jose Concepcion III before he took on the full job of presidential consultant for entrepreneurship. Meanwhile, Joey Concepcion’s top marketing man for condo units, Rally Martinez, has moved on to a similar operation put up by the family of Quezon City Mayor Feliciano Belmonte.

 

http://www.businessmirror.com.ph/02192007/companies05.html

Lucio Tan joins property bandwagon

By Zinnia B. Dela Peña
The Philippine Star 02/20/2007

 

Lucio Tan has set up a new real estate development company to take advantage of the current property boom being fueled by dollar remittances from overseas workers and low interest rates.

The new firm, Eton Properties Philippines Inc., is positioning itself to be among the leading real estate developers in the country.

Sources said Tan, listed as the Philippines’ second wealthiest businessman in the latest Asian edition of Forbes Magazine with a net worth of $2.3 billion, wants to seize opportunities in the residential, retail and office building markets — the fastest-growing segments of the industry.

The tycoon is planning to build a mall called Dragon Center in a property along Alabang-Zapote Road that was foreclosed by his bank, Allied Banking Corp. It also plans to ride the BPO (business process outsourcing) bandwagon to help meet the huge demand for office space among multinationals which have chosen the Philippines as site for their expansion.

Aside from office buildings and residential condominiums, Eton will build residential subdivisions, condotels, and leisure/retirement projects.

Tan, through several companies, owns a very extensive landbank in both the Makati and Ortigas central business districts, Manila, Pasay, Paranaque, Quezon City, Pasig, Mactan, Cabuyao, Calatagan and other strategic locations in the Philippines.

He also has extensive property holdings in Hong Kong, China and other parts of Asia.

Tan through Eton Properties (HK) has developed a commercial building in Xiamen, China. The company also plans to develop residential, office and retail spaces in Beijing which is envisioned as the first Hong Kong-style residential quarter in the area.

Tan has interests in the airline business through Philippine Airlines, the country’s flag carrier; tobacco (Fortune Tobacco Corp.), beer and liquor (Asia Brewery Inc. and Tanduay Holdings Inc.), banking (Philippine National Bank and Allied Banking Corp), and education.

The tycoon also controls publicly listed Balabac Resources & Holdings Inc., a holing company with interests in real estate development and oil exploration; and MacroAsia Corp., an aviation-related services company.

Sources said some of the foreclosed properties of PNB might also be developed into residential or commercial projects by Eton.

According to a report by investment bank, UBS the exciting prospects in the residential market are being boosted by rising demand from OFWs, improving affordability, low interest rates, and rising middle-class demand.

 

http://www.philstar.com/philstar/NEWS200702200702.htm

PSE wants REITs under government's IPP

By Honey Madrilejos-Reyes

Reporter

THE Philippine Stock Exchange (PSE) plans to enroll the real-estate investments trusts (REITs) industry under the government’s investment priorities plan (IPP). The IPP is a rolling annual plan of priority industries and service areas, which are being encouraged through the grant of fiscal and nonfiscal incentives. In an interview Monday, PSE president Francis Lim said he is currently leading a study on how to go about the plan and once the details are finalized, he will confer with the Board of Investments (BOI) on the proposal. “I thought of this because I know it will take some time for Congress to create an enabling law for the establishment of the REITs, especially with the forthcoming elections. In the meantime that they [legislators] are studying the rules on REITs, why not apply it with the BOI and allow it to become an accredited company entitled to income tax holidays of five to six years,” Lim explained. The PSE is actively pursuing the establishment of REITs in the Philippines to give the investing public more avenues to grow their resources. One of the come-ons of REITs is its special tax privilege. “Investing in REITs can be profitable because of the mandatory dividend declaration of as much as 90 percent. But to be able to do that, it should receive special tax considerations like exemption from income and corporate taxes,” Lim explained. REITs are mutual funds that invest in real estate through actual property and/or mortgage portfolios. These types of investment vehicles offer investors the opportunity to invest in real estate through a fund that is professionally managed. Pooling investor funds together for REITs also allows investors to invest in larger scale properties such as hotels and office buildings that would be financially impossible for some to do on their own. Like investing in real estate, REITs may also provide investors with an income stream from rents and the high possibility of long-term appreciation if the real-estate market goes up. REITs is currently in placed in countries like Hong Kong, Singapore and the US. Once the industry is established here, major property developers like Ayala Land, SM Prime Holdings, Robinsons Land Corp. and Megaworld, can pool their respective assets under one entity and have this entity listed separately at the stock exchange. These assets can be shopping malls, residential and office buildings, resorts and even parking lots. Lawmakers, for their part, are convinced of the huge potential of the REITs as a new investment instrument. Reelectionist Sen. Edgardo J. Angara said he was willing to sponsor the bill because “investors would have a new avenue to grow their investments apart from doing transactions in banks, investing in bonds, and the stock market”. Angara admitted, though, the drafting of the enabling law would take some time to complete. The Lower House, for its part, deemed the REITs as an investment instrument that would allow even the small investors to participate into. “This is something that is going to help boost the economy. We are in a better condition now and it would be very good to pass a bill on the REITs,” said deputy majority leader Rep. Abraham Mitra. Meanwhile, industry players stressed the importance of having a law put in place first before considering participation in REITs. “It is still a long way to go. The instrument has to be created through legislation. But it is something worth looking at,” said Ayala Land president Jaime Ayala in a previous interview. On the other hand, Federico C. Cuervo, president of Cuervo Appraisers Inc., said REITs has future in the Philippines given the stability of the real-estate sector. “REITs would grow systematically here. It makes politics irrelevant. Real estate is a very stable investment so investors are assured of capital gains,” he noted.

 

http://www.businessmirror.com.ph/02202007/companies03.html

Stocks down for Chinese holiday

By Ian C. Sayson

Bloomberg

PHILIPPINE stocks fell for the second day on expectations that gains will be limited until the end of Chinese New Year holidays, which last through the week in some markets. Ayala Corp. and Philippine Long Distance Telephone Co. (PLDT) led the decline. Filinvest Land Inc. climbed to its highest since August 11, 1997, on news that that it’s building a P780-million community south of Manila. “A lot of fund managers are away for the holidays so don’t expect any dramatic movements in the market,” said Grace Cerdenia, head of research at 2TradeAsia.com in Manila. The Philippine Stock Exchange index lost 4.53, or 0.1 percent, to 3329.03 at the close, extending a 1.4 percent decline on February 16. Earlier, it had risen as much as 0.7. The Philippine stock market is one of seven that traded Monday in Asia. The rest were closed for the Chinese New Year. Ayala, the nation’s fourth-largest company by market value, fell P15, or 2.3 percent, to P625, its lowest in four days. PLDT, the nation’s largest, fell P10, or 0.4 percent to P2585. “There wouldn’t be that much demand for stocks until we see that the fund managers on vacation are back,” 2TradeAsia.com’s Cerdenia said. Equitable PCI Bank, the nation’s third-largest lender by assets, fell P20, or 1.7 percent, to P113, extending a 2.5-percent loss on February 16. Holcim Philippines Inc., the nation’s largest cement company, fell 10 centavos, or 1.2 percent, to P8.30.  New community SEPARATELY Filinvest Land, the nation’s largest builder of affordable homes, rose 12 centavos, or 6.90 percent, to P1.86, the highest in more than 9 years. The Manila-based builder is creating a community on 350 hectares in Calamaba, a city south of Manila. Aboitiz Equity Ventures Inc., which is selling shares in its energy unit, gained 20 centavos, or 2.4 percent, to P8.40, its biggest gain since January 24. The company said earlier Monday that it will build a coal-fired power plant in partnership with Taiwan Cogeneration International Corp.

 

http://www.businessmirror.com.ph/02202007/companies02.html

Bull run continues

Bull run continues
PHILEQUITY CORNER By Ignacio B. Gimenez
The Philippine Star 02/19/2007

 

"It’s a bull market… After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!" — Reminiscences of a Stock Operator by Edwin Lefevre.

The quote above, from one of the most highly regarded financial books ever written, sums up the most simple and effective way to make money in any bull market — to buy an up-trending market, sit tight and then make a lot of money.

This approach is similar to what we’ve discussed in a past article entitled "Newton’s law as applied to the stock market." We mentioned that once certain catalysts put economies or markets in a trend, this will hold on until an opposing and equal force upsets or changes the trend. And more often, these trends last for years as in the case of BRIC countries (Brazil, Russia, India and China) and even ASEAN countries like Singapore and Indonesia, all of whose markets are making new all-time highs.

The trend is our friend

In June 2003, when the PHISIX was at 1,073 (barely eight percent off its all-time lows), Philequity came out with a newsletter titled "The market has bottomed!", urging our investors to put more money in the emerging bull market in Philippine stocks. We even held an investors briefing in Makati in August of that same year. Since then the market has appreciated by 210.5 percent. In US dollar terms, the market’s gain was 243.7 percent.

In August 2004, when the PHISIX was at 1,582, we declared we were maximum bullish when we wrote our newsletter titled "Grab the bull by the horns," immediately after President Arroyo announced that the country is in a fiscal crisis. Since then the market has appreciated by 110.7 percent. In US dollar terms, the market’s gain was 146 percent.

In November 2005, we wrote an article for Philequity Corner titled "It’s time to make money," after the successful implementation of the EVAT law. We said that we see a clear path towards fiscal revitalization and sustained economic upturn and we advised investors to buy Philippine assets. Since then the market has appreciated by 70.1 percent. In US dollar terms, the market’s gain was 94.2 percent.

Following this simple strategy of staying with the trend has kept our Philequity Fund very profitable throughout the years. From the start of 2003 to the present, Philequity Fund has returned 248.6 percent to its shareholders, outperforming the PSEi which returned 227.3 percent.

Onwards to 4,000

In November of last year, we amended our end-2006 target for the PSEi to 3,000 from 2,600 since our original target was already reached by October. This time, however, with the tremendous strength of equities markets globally, we are compelled once more to amend our end-2007 PSEi target to 3,700 (from 3,400) and to 4,000 by 2008.

Also note that while the PSEi is trading near all-time highs, prices in US dollar terms are still half of what it was in the pre-1997 era. Thus, from the point of view of foreign investors, Philippine equities is still way too cheap from where it was 10 years ago. In US dollar terms, the PSEi still has a long way to go.

Given the spectacular rise in the market so far this year, we expect corrections and profit-taking along the way just as the market gave back some of its gains last Friday. However, we view these pullbacks as opportunities to buy as the long-term uptrend remains firmly intact.

What could distract the trend?

We have highlighted in past articles what we think are factors that pose as risks to our projections.  These include:

1. The possibility that the opposition would muster enough seats in Congress to initiate impeachment proceedings against President Arroyo. Note that it is not the change of leadership per se that we are worried about but the scenario of a possible change in policies that comes with it. The assumption to power of leaders with populist tendencies could be obtrusive to reforms and even reverse the reform momentum that has been set.

2. A more pronounced slowdown or an overheating of the US economy. Investors have become accustomed to the Goldilocks economy in the US and are now comfortable with the "not-too-hot, not-too-cold" scenario in terms of macroeconomic fundamentals. Any surprises in either direction could prompt changes in their investment plans.  This has repercussions in the global markets which still take cue from the US market.

For comments and inquiries, you can email us at gime10000@yahoo.com or research@philequity.net or call Jerome Gonzalez or Ricardo Puig at 634-5038.

 

http://www.philstar.com/philstar/NEWS200702190711.htm

Market seen taking a breather this week

By Zinnia B. Dela Peña
The Philippine Star 02/19/2007

 

After reaching a new 10-year high last week, the market may take a breather as investors get a clearer picture of policy makers’ next move on the widely-monitored benchmark interest rates.

First Metro Investment Corp.’s Junie Banaag said some investors may lock in gains as the main index extends nearer the 3,400 barrier.

Share prices reached the 3,381 level last Thursday but Friday’s profit-taking cut the week’s gains. The index, however, managed to hold safely above the 3,300 support mark on better-than-expected earnings results of several listed firms.

“It’s a good thing the market corrected its recent gains so that the rally will have better legs before eventually attempting to break into record territory,” said AB Capital Securities in its weekly market report.

Stock portal 2tradeasia.com said last week’s average daily net foreign buying of P429 million last year was much lower than the previous week’s P1.17 billion.

“Market players might start pricing in expectations for possible 25 to 50-basis point rate hike for subsequent sessions,” 2tradeasia.com said.

“We might still see prospective buyers retaining their wait-and-see stance for now, unless significant news come up to support aggressive rises past 3,300-3,350,” said 2tradeasia.com.

“Immediate support is at 3,220 while resistance is at 3,300,” 2tradeasia.com said.

AB Capital Securities believes that the corrections will be short-lived as the peso continues to strengthen against the dollar and as benchmark borrowing charges remain within single-digit levels.

The peso has appreciated to a new six-year high and may further strengthen given the trend in foreign fund inflow.

“Although economic and corporate fundamentals are very positive, this may have already been factored into current share prices. Moreover, there is also the possibility that interest rates may have already bottomed out. A reversal in money market rates could be a catalyst that could finally propel the market to a major technical correction,” AB Capital Securities said.

Among Banaag’s stock picks are Republic Cement and IPVG, which is involved in some of the fastest-growing industries, namely bandwidth/data center, Internet gaming and call centers.

 

http://www.philstar.com/philstar/NEWS200702190705.htm

AGI to become Andrew Tan's holding company

By Zinnia B. Dela Peña
The Philippine Star 02/19/2007

 

Industrialist Andrew Tan is consolidating all his interests in real estate development, food and beverage, and the fastfood service industry, under Alliance Global Group Inc. (AGI) as he seeks to build a solid platform for continuous growth.

In a statement, Tan said AGI will become his holding company with the infusion of assets worth P20 billion.

Given his track record in innovation and his ability to excel amid competition, Tan, who was appointed as chairman of AGI in September, is hoping to take AGI to new heights.

“AGI will serve as a primary vehicle to expand his existing businesses and to look into various opportunities for growth,” Tan said.

Just last Friday, AGI’s board approved two transactions allowing the holding firm to acquire 100 percent of Emperador Distillers Inc. for P3 billion and a 25-percent stake (representing 5.25 billion shares) in upscale property developer Megaworld Inc. for about P17 billion in exchange for 4.06 billion common shares of AGI to be taken from the latter’s unissued shares.

Both Emperador Distillers and Megaworld are owned by Tan.

With this transaction, AGI’s stake in Megaworld will increase to 46 percent from the existing 21 percent held by subsidiary Newtown Land Partners.

As a new conglomerate, AGI will embark on aggressive property development through Megaworld, a leader in the property market’s two fastest-growing segments: middle-income housing and business process outsourcing office.

AGI’s food and beverage business, on the other hand, will be expanded through Emperador Distillers Inc., the country’s third largest liquor firm. Among Emperador’s products include Club Valentino Rhum, Collector’s Premium Whisky, Andy Player Special Whisky, and Emperador Brandy.

AGI is also the exclusive distributor of Campbell Soup Co.’s products and E&J Gallo Winery Inc. wines in the Philippines. It also handles the international marketing of McKester PikNik International Ltd.’s food products.

Meanwhile, AGI’s quick service restaurant operations will be boosted by McDonald’s, which expects to double its branch network to 500 in the next five years.

Golden Arches Development Corp, the master franchise holder of McDonald’s in the Philippines, is owned 51 percent by the family of businessman George Yang and 49 percent by Tan.

“AGI has ensured a strong momentum for growth with the dominant position of Megaworld and Emperador Distillers in their respective industries and McDonald’s reputation as a strong global brand. AGI is also looking into new areas where growth is sustainable,” Tan said.

In view of the planned share purchase, the Philippine Stock Exchange shall suspend trading in shares of AGI beginning today pending compliance with certain requirements.

 

http://www.philstar.com/philstar/NEWS200702190704.htm

RP stocks drop on profit-taking

RP stocks drop on profit-taking

By Ian C. Sayson

Bloomberg

THE Philippine stock index lost the most in three weeks. Equitable PCI Bank and Jollibee Foods Corp. led the slide among stocks that has boosted the measure in the past two days to a 10-year high. “Investors are taking a breather,” said James Lago, head of research at Westlink Global Equities in Manila. “A number of stocks have moved sharply ahead of earnings prospects.” Megaworld Corp. advanced after the company said it will build more office space over the next five years for companies that provide outsourced business, including call centers. The Philippine Stock Exchange index lost 45.81, or 1.4 percent, to 3333.56 at the close, the most since January 26. Losers beat gainers 71 to 52 with 45 stocks unchanged in the broader market. The measure, which advanced 4.5 percent in the previous two days to the highest since February 10, 1997, rose 2.7 percent last week. It is up 12 percent this year, the fifth-biggest gainer among Asia’ main stock benchmarks. Equitable PCI Bank, the nation’s third-largest lender by assets, lost P3, or 2.5 percent, to P115, ending a six-day, 23 percent surge. The stock’s 14-day relative-strength index, a moving average based on whether shares rose or fell, climbed to 92 on Thursday, when the shares advanced to the highest ever. A score of more than 70 indicates to some analysts that the stock is poised to fall. Jollibee Foods, the nation’s largest fast-food company, fell P1, or 2.1 percent, to P47, after a two-day, 12-percent climb lifted it to a record Thursday. The stock is trading at 23 times earnings, compared with a valuation of 17 times for the main stock index.  Far from cheap “VALUATIONS are far from cheap,” Garry Evans, HSBC Holdings Plc’s Hong Kong-based equity strategist, said in a report Friday reiterating his “underweight” call on the Philippines. “We would be inclined to become big buyers only if the stock market were cheap.” Ayala Corp., the nation’s third-largest company by market value, fell P1, or 1.5 percent, to P64. Ayala Land Inc., the nation’s most profitable builder, lost 50 centavos, or 2.9 percent, to P16.75. Ayala Corp. is trading at 26 times prospective earnings, compared with 19 percent for the benchmark. Ayala Land is trading at 43 times. “A large number of share-price targets have been breached, which may result in some consolidation with investors taking profit,” said Gilbert Lopez, analyst at the Manila unit of Macquarie Securities Ltd. Some stocks “no longer provide any share-price upside.”  Outperformers SM Prime Holdings Inc., the nation’s largest shopping mall operator, fell 25 centavos, or 2 percent, to P12.25, after advancing 6.4 percent in the previous two days. SM Investments Corp., the nation’s second-largest company by market value, declined P10, or 2.5 percent, to P390, after advancing 3.9 percent in the previous two days. SM Prime and SM Investments are some of the stocks rated “outperform” by Lopez that have already breached his 12-month share price targets, he said. His target for P12.30 for SM Prime and P365 for SM Investments. Separately, Megaworld, a builder of office and residential towers, added 5 centavos, or 1.6 percent, to P3.20, extending a two-day, 19-percent climb. The company said after trading closed Friday that it will build 5.4 million square feet of office space within five years, with as much as half that target completed in two years. Shares worth P6.54 billion pesos were traded Friday, more than double the six-month daily average. Losers beat gainers 71 to 52, with 45 stocks unchanged in the broader market.

 

http://www.businessmirror.com.ph/02192007/companies01.html

Shares close 0.10 percent higher

MANILA (AFP) - Philippine share prices closed 0.10 percent higher as brighter economic prospects overcame profit-taking earlier in the day, dealers said. Investor confidence is high especially with government now saying it is intent on maintaining economic momentum, they said The Philippine Stock Exchange composite index was up 3.61 points at 3,378.92 after moving between from a high of 3,417.08. The broader all-share index rose 8.57 points to 2,151.66. Gainers beat losers 87 to 43 while 45 stocks were unchanged. Volume amounted to 10.2 billion shares worth 5.9 billion pesos (123 million dollars). The Philippine peso traded at 48.12 to the dollar. "Investor confidence is really high, especially with the government now saying it is intent on maintaining economic momentum," Ron Rodrigo, an analyst with Unicapital Securities Inc, said. Dealers said investors also prefer to invest in stocks instead of government securities and other fixed-income instruments with rates on benchmark Treasury bills at record lows. The market, however, appears to be overheating, said Summit Securities president Harry Liu, and may need to take a breather before attempting to retest the 3,400 point resistance level. "The market is in overbought condition after extended rallies, so we can expect some correction to take place before it builds up momentum to get to the all-time high level," said Liu. Top-traded Philippine Long Distance Telephone Co gained 10 pesos to 2,605 while rival Globe Telecom Inc advanced 15 to 1,370. Ayala Land Inc shed 25 centavos to 16.75 pesos. Food and beverage conglomerate San Miguel Corp's A-shares advanced one to 67 and its B-shares were flat at 78.50.

 

http://www.mb.com.ph/BSNS2007022187754.html

 

RCBC profit up 23%

By Ted P. Torres
The Philippine Star 02/21/2007

 

Rizal Commercial Banking Corp. (RCBC) has reported an unaudited net income of P2.011 billion last year, or 23 percent better than the P1.63 billion registered in 2005.

In a statement, the Yuchengco-led commercial bank also said it experienced a 23-percent growth in its asset base to P227.3 billion compared to P185 billion in 2005.

The asset value of the bank ranked it eighth in the industry, one notch better than the ninth position it held in 2005.

RCBC said the 2006 performance was buoyed by the growth in financial market assets, growing 44 percent to P61 billion and strengthening the bank’s liquidity position.

The growth in income and asset base was attributed to RCBC’s intensified efforts at generating more income from its core lending business and a larger securities portfolio.

Lending in 2006 reached P82 billion, or 11.4 percent higher than the P73.7 billion in 2005. The bank was ranked sixth biggest lender within the commercial banking system, from its eighth position in 2005.

Growth is further complemented by a healthy increase in total deposits to P157.4 billion, or 18 percent higher than the P133.2 billion in the previous year, retaining the bank’s seventh overall position among the commercial banks in terms of deposits.

 

http://www.philstar.com/philstar/NEWS200702210705.htm

PLDT sees 2006 income in excess of P35B

PLDT sees 2006 income in excess of P35B
By Mary Ann Ll. Reyes
The Philippine Star 02/21/2007

 

Telecommunications giant Philippine Long Distance Telephone Co. (PLDT) expects to exceed its P35 billion net income target for 2006, following a reversal of provisions made for the company’s investments in a satellite company.

The reported net income for 2005 was P34 billion, or three percent lower than the 2006 projection. Core earnings, on the other hand, are projected to increase by around 8.6 percent from P29 billion to P31.5 billion. The core earnings projections for 2006 took into account the peso appreciation, which has impacted the top line revenues of the company’s fixed line business. More than 56 percent of revenues of the fixed line business are dollar-driven.

PLDT chairman Manuel Pangilinan earlier revealed that the projected reported earnings of P35 billion for 2006 will depend on whether on not PLDT will be able to close the transaction involving a satellite company. PLDT owns 100 percent of ACeS Phils.Cellular Satellite Corp. as well as 20 percent of ACeS International Ltd. (ACIL). Without the Aces transaction, PLDT would end up with a reported net income of P33 billion, or lower than the nprevious year’s P34 billion.

He refused to elaborate on the transaction, but hinted that it will involve a reversal of some provisions made for ACeS. "Both entities (ACeS Phils. and Intl) will be involved. There will be potential new investors and there will be some rearrangement of our ownership. But we will retain a portion," Pangilinan disclosed

It was learned that ACeS International and Inmarsat have entered into an agreement whereby the latter will come in as a new partner by assuming certain obligations of the former.

PLDT clarified that it is not divesting its equity interest in ACIL or sold its its ACeS System satellite-based business. "In fact, PLDT’s equity in ACIL has increased," PLDT president Napoleon Nazareno said in an interview.

ACIL earlier entered into collaboration arrangements with Inmarsat, a leading mobile satellite operator, that will transform regional operator ACIL into a global one, with the combined coverage of one satellite and four series satellites.

Following the signing of the collaboration arrangements, PLDT and its subsidiary ACeS Philippines, have entered into certain agreements with ACIL, other stockholders of AIL, creditors of ACIL, national service providers (NSPs) of the ACeS system satellite-based services, regarding changes in the debt and equity structure of ACIL and amendments to the air time purchase agreements with the NSPs.

 

http://www.philstar.com/philstar/NEWS200702210703.htm

Philippine stocks gain, ending two-day slide

By Ian C. Sayson

Bloomberg

PHILIPPINE stocks climbed, ending a two-day slide, after the yield of a key government treasury bond fell to a record low, making returns from equities more attractive. Ayala Corp. and Bank of the Philippine Islands (BPI) also rose on speculation the decline in the yield of the 91-day Treasury bill will help keep interest rates low, spurring demand for mortgages and loans. Philippine Long Distance Telephone Co. (PLDT) advanced after a unit said it will expand its outsourced business services. “Funds are shifting into equities because returns from fixed-income assets are becoming unattractive,” said Jenny Ting, who helps manage about $4.7 billion at BPI Asset Management Inc. in Manila. “Low interest rates also lead to more economic activities because it would encourage consumers and companies to borrow for spending and expansion.” The Philippine Stock Exchange composite index gained 46.28, or 1.4 percent, to 3375.31 at the close, ending a two-day, 1.5-percent slide that pulled it off a more than 10-year high. The main stock measure is less than 100 points away from its record 3447.60 reached on February 3, 1997. The measure has advanced 13 percent this year, Asia’s fifth-biggest gainer after benchmarks in Vietnam, China, Pakistan and Malaysia. Ayala Corp., owner of the nation’s largest property builder, added P10, or 1.6 percent, to P635. Bank of the Philippine Islands, the nation’s most profitable lender, gained 50 centavos, or 0.7 percent, to P70. The yield of the Philippine benchmark Treasury bill, which lenders use to price loans, fell to a record low at a regular auction Monday, declining to 2.885 percent from 3.008 percent at the February 5 sale. The yields on the 182-day bill and the 364- day bill also fell to record.   Property shares gain “LOWER interest rates are positive for the market overall,” said Tanya Cua, analyst at Macquarie Securities Ltd.’s Manila-unit. “The best way to play this is through the property sector.” Ayala Land Inc., the nation’s largest property developer, gained 25 centavos, or 1.5 percent, to P17, bringing this year’s rise to 12 percent. Megaworld Corp., a builder of residential and office towers, rose 15 centavos, or 4.7 percent, to P3.35, its highest since February 20, 1997. Belle Corp., which is building a resort south of Manila, added 12 centavos, or 8.5 percent, to P1.54, its highest since March 16, 2005. BPI Asset’s Ting also said that the stronger peso is encouraging investors to put more money into the Philippines as the appreciating currency provides an additional gain from stocks. Peso advances “UNLIKE before, when a depreciating peso eroded part of their gains, the strong currency will help preserve or even add to the returns of overseas funds invested in the Philippines,” Ting said. The peso has gained 2-percent against the US dollar this year, sending the local currency to its strongest since March 2001. Metropolitan Bank & Trust Co., the nation’s largest lender by assets, added P1, or 1.5 percent, to P67.50, snapping a two-day, slide. Among other gainers, Universal Robina Corp., the nation’s largest snack-food maker, added 25 centavos, or 1.3 percent, to P20, following a six-day, 18-percent gain partly due to expectations its dividend payments could double this year. Separately, PLDT, the nation’s largest phone company, advanced P10, or 0.4 percent, to P2595, following a two-day, 1.3-percent slump. The company’s unit, SPi, said Tuesday that it will spend P5 billion to expand its operations of providing outsourced business services, including call centers. Shares worth P4.15 billion were traded, 27-percent more than the six-month daily average. Gainers beat losers 107 to 31, with 42 stocks unchanged in the broader market.

 

http://www.businessmirror.com.ph/02212007/companies02.html