Philippine stock prices slump in the face of global economic concerns

By: Doris C. Dumlao
Philippine Daily Inquirer
1:56 pm | Friday, September 23rd, 2011 

MANILA, Philippines – Most local stock prices dropped sharply on Friday, bringing the main index to its worst single-day slump in three years as concerns over global growth dragged global equities back to bear territory.

The main-share Philippine Stock Exchange index slid by 210.14 points or 5.13 percent to finish at a six-month low of 3,885.96.  This was the steepest daily drop seen by the local bourse since October 27, 2008, when the main index fell by 12.3 percent.

The index has now reversed earlier gains for the year and is now 7.5 percent below its end-2010 level.

All counters were sold down but the mining/oil and property counters were the most battered, outpacing the PSEi’s drop by falling 9.87 percent and 6 percent, respectively.
Turnover was heavy at P8.2 billion, including some block sales. There were nearly 13 stocks that declined for every single stock that advanced.

“The 3Rs continue to feed the bears – recession fears on the global economy, renewed risks in the capital markets especially with possible default of European countries and the continuous retreat of investors to safer investment instruments,” said Astro del Castillo, managing director at local fund management firm First Grade Holdings.

“Fundamentally, we are stable but definitely not immune to the realignment of fund managers,” he said.

Investors dumped index stocks PLDT, Metrobank, Semirara, ICTSI, AGI, EDC, ALI, BDO, SM Investments, Ayala Corp., Philex, BPI, Aboitiz Power, SM Prime, DMCI, San Miguel Corp. and Megaworld.  Likewise heavily sold down were Lepanto A (open only to local investors) and B (open to both local and foreign investors) as well as Atlas.

There was a P1.29 billion block sale on Rizal Commercial Banking Corp. at P29 each and another P69.6 million block transaction on Polar Property Holdings at P2.32 each.

Overnight, the Dow Jones Industrial Index tumbled by 391.01 points or 3.5 percent to 10,733.83 as fears over another US recession fuelled risk aversion. A decline in China’s factory output for the third straight month added to the jitters.

For the first time in two years, the MCSI All-Country World Index of 45 nations went into bear territory.

“Risk-off sessions were seen with intensifying worry about double-dip recession,” said European investment bank Credit Agricole CIB.

“Markets continue to be volatile; growth concern weighs further on sentiment,” it said.

http://business.inquirer.net/20921/philippine-stock-prices-slump-in-the-face-of-global-economic-concerns

Executive tells PR men: ‘Honesty better than PR’

Thursday, 22 September 2011 21:24
Dennis D. Estopace / Reporter

IN PHOTO -- PR CONGRESS
OPENS - Bob Grove, managing
director of Edelman Southeast Asia,
gives a presentation at the opening
of the 18th National PR Congress
on Thursday. --ROY DOMINGO

HONESTY remains the best policy to gain customer trust and shore up share prices, according to the CEO of the company that created the “trust barometer.”

“You may have a bad PR [public relations] but having an honest leader telling people what they’re really doing so that the bad things won’t happen again evokes trust because it shows the leadership is on top of what’s happening,” Bob Grove of Edelman told the BusinessMirror in an interview late Wednesday.

Grove, managing director for Southeast Asia of the consultancy firm Edelman, spoke on trust and the global PR industry at the 18th National PR Congress on Thursday, where he emphasized the importance of honesty and transparency in running a business.

Citing studies, Grove said share prices of companies that were able to regain consumer trust from a failed product recovered when their leaders immediately apologized to the public, explained the situation and bared the steps to rectify.

“Those that showed decline in share prices were companies that were slow to react, the leadership wasn’t involved and didn’t show the whole story,” he said.

Grove explained that the market punishes such companies because their actions after a crisis suggest the strength—or weakness—of its leaders. “They always ask, ‘Should I trust my money on these guys?’” he said.

Just recently, Edelman’s “trust barometer” showed business in the United States suffering a decline in trust from 54 percent last year to 46 percent this year.

But, according to Grove, businesses in Southeast Asian countries, which were excluded in the survey, are considered highly trusted. Grove, who has spent time in Asia since 1993, cited companies in South Korea as having credibility among consumers even outside its territory.

This is a feat in itself, he said, since high levels of trust are usually given to businesses mostly from Europe, like Germany and Sweden.

Technology companies consistently scored high levels of trust, whether in the Edelman’s poll or the recently released Trust Index by local PR firm EON Inc.

“That’s the key differentiator today, technology,” said Grove, who added that the advent of social media and synchronicity of traditional and online media give consumers the power to make or break a company.

He said a consumer can become a company’s spokesman via the online social media and mobile phones. 

“We’ve discovered that trusted companies sold more product than distrusted companies. Eighty percent of consumers won’t buy products and services from companies they don’t trust, whereas 70 percent will buy in a company they trust. It’s now a reality,” he said.

In times of crisis, he said companies should act quickly—“within the hour”—adding that “companies that weren’t able to recover were the companies that had leaders not communicating fast and honestly.”

http://www.businessmirror.com.ph/home/top-news/16919-executive-tells-pr-men-honesty-better-than-pr

Does the ‘gloom’ make the ‘doom’?

Wednesday, 21 September 2011 21:17
John Mangun / Outside the Box

What would you do if you knew tomorrow was the last day of your life?

That philosophical question has been asked for centuries. 

However, it may have become more relevant in the post-war and Cold War period when the vast majority of the citizens of the world were living under the cloud of nuclear war.

In the last decades, primarily because of instant communication and news, we had the greatest of human tragedies brought right into our own homes. Crime, natural disasters and war are offered as nightly fare on the news. We can experience nearly in real time as these events unfold and no matter how immune we might think we are, some of this hit home, touching our souls and our thinking. It seems as if no one, no matter his or her country or economic status, is safe anymore.

We are almost constantly bombarded by all the gloom that we can handle and it has been happening for a generation.

People are not very optimistic and positive about the future. You might say that we have reason to be afraid of the future. I mean, look at all the different kinds of major problems that even the average person may have to face. Not only must we consider the traditional “Acts of God”—earthquakes, storms and volcanic eruptions—but each can be compounded by subsequent “man-made disasters.”

The Japanese have known for 600 years that the Sendai plain could be subject to a tsunami. There are old markers in the area telling people not to live closer than a certain distance from the ocean.

But the ancestors did not have to confront the aftermath when a nuclear plan goes ballistic.

In the 1970s, the “experts” told us that the world was going into another Ice Age, which would cause massive starvation as crops would not be able to grow. Now we are told that so-called global warming will sink the land.

We live under the same psychological cloud as the child who is convinced that there is a monster on the closet, never knowing when it is going to strike.

In the last decades, fear of the future has become a worldwide pandemic.

The world is in the midst of a financial disaster that is going to last years, if not decades. 

Purchasing power, which is just another way of saying “standard of living,” in the US is the same as in 1996. It is as if more than a decade of hard work, wealth creation and advances in technology has been wiped out. How could this have happened?

We now obviously know that it is the result of very bad decisions on the part of governments, business, and, maybe most important, individuals.

Then you must ask, if you knew back then what you now know, would you have made those same decisions? Tens of millions of families bought homes they knew they could not afford, only because they believed that the price of the house would always go higher and that they would never have to pay the mortgage off. Does that make any sense at all?

Financial institutions invested in financial instruments that did not have any value whatsoever except if they could find another institution to buy it for a higher price just because that’s what they were all doing. Does that make any sense? Governments borrowed trillions to buy things “for the people” when they knew there would never be enough tax revenue to pay the debt. Does that make any sense?

What would you do if you knew tomorrow was the last day of your life?

Would you spend your remaining life helping others in order to leave a lasting positive mark on the world? Or would you sink to the lowest level of immediate gratification, completely disregarding the lasting consequences because you will not be here to face it?

Perhaps the world never look at future consequences because there was a hidden belief that the future would never come.

Year 2000 came and went and the world continued. 2012 will come and go and the world will go on. Perhaps all of the secular humanism doomsday thinking of the last decades has created the gloom the world must face today. So what do we think today and what do we do tomorrow when we are still here?

On a personal note, I invite you to visit mangunonmarkets.com. You can gain access to the PSE Strategy Guide for stock-market investors as well as other content that I hope you will find interesting. The web site is still on “soft launch” status but do not hesitate to ask your questions using the appropriate box.

E-mail to mangun@gmail.comand Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by CitisecOnline.com Inc.

http://www.businessmirror.com.ph/home/opinion/16858-does-the-gloom-make-the-doom

Ongpin: I was a technocrat, not crony

by Judith Balea, abs-cbnNEWS.com

Posted at 09/22/2011 3:49 PM | Updated as of 09/22/2011 3:56 PM

MANILA, Philippines - After staying under the radar for a few years following his government stint during Martial Law, Roberto V. Ongpin returned to Philippine business with a vengeance.

Slowly building his empire, Ongpin bet big on the country, snapping deals one after another.

Over the last decade, he managed to take control of five companies in gaming (PhilWeb Corp.), information technology (ISM Communications Corp.), mining (Atok Big Wedge Co. Inc.), property (Alphaland Corp.) and banking (Philippine Bank of Communications), while partnering with other investors for stakes in several others, including food-turned-power conglomerate San Miguel Corp.

All these deals eventually landed him the title of being one of the richest businessmen in the country today.

However, Ongpin’s journey through the private sector has not been without controversy.

The international deal maker has come under fire for his financial dealings involving state-owned Development Bank of the Philippines and gold and copper miner Philex Mining Corp. two years ago.

Ongpin recently sat down with Pia Hontiveros for an interview on ANC's Strictly Politics. He talked about his struggles during the Martial Law years, his return to private life, and why he "resents" being called a Marcos crony.

Ongpin first gained national prominence as trade minister of the late dictator Ferdinand Marcos from 1979 until the EDSA Revolution in 1986. He was regarded as one of the most competent technocrats whose service ended together with the downfall of the regime. How he got into the Marcos Cabinet is also quite a story.

Prior to being appointed trade minister, the Harvard-educated Ongpin served as managing partner of SGV & Co.

For 50 years, Ongpin has been married to Monica Arellano, with whom he has two children: Stephen, 48, and Anna, 45. He has two more children (Michelle, 30, and Julian, 19) by two different women.

The 74-year-old Ongpin has no plans to retire yet, saying "I'm enjoying myself. I'm still useful. I'm only half finished with what I want to do."

Transcirpt of Ongpin's interview on ANC's Strictly Politics, September 20, 2011

They're trying to pin you down on "behest" loans from DBP and according to reports they're also going to try to pin you down on insider trading. What do you make of all of these?

Well I think it's tragic. I think it's very sad. This in no way can be called a behest loan. A behest loan is very specific, it has got to be a loan that hasn't been paid or is in default of non-performing.

This loan was paid on time, in fact, ahead of time. It was fully collateralized. And it made tons of money.

I don't know why they have chosen to this loan and called this a behest loan.

Let's go into history. You have a very interesting life story to tell. You joined the Marcos Cabinet in '79. What did you think of Martial Law at that time?

Martial Law, when it was declared, was... I don't know how to describe it. But for a couple of years after it was declared, there was real discipline in this country and the economy grew quite well. Then it started to slide again.

It was tough because we had curfew. The wives had to come home early.

What was it like to have joined the Marcos Cabinet in 1979 just as Mr. Marcos had started to become unpopular?

Well, he probably started to become unpopular before that. I tried my best to escape from being conscripted into the Cabinet. I never sought the position.

In fact, when he called me, I was in London. He called at 4 o'clock in the morning, well it was one of the assistants who called and said, 'The President wants to talk to you.' I said, 'It's 4 o'clock in the morning.' So I hung up. Then he called again.

Was he trying to recruit you even before that?

That was in '79 when he (Marcos) called me. I never met him prior to the time he called. So he asked me when I would be back. He said, 'Can you come back sooner because I need to announce a change in the Cabinet.'

I said, 'Mr. President, are you considering me? I'll come back and I'll try to convince you that I'm not the right guy for you.'

Why didn't you want to a part of his Cabinet?

It wasn't that I didn't want to be part of his Cabinet. I told him I had a very complicated personal life and that I felt I would bring embarrassment to his Cabinet. But he said, 'I understand those things. They're not a problem for me.'

We were supposed to talk for 15 minutes, but we talked about three hours.

How did he hear of you? Who recommended you?

I really don't know. Cesar Virata was his finance minister for a long time and Cesar and I were partners at SGV.

Jimmy Laya, at that time, was budget minister. We were ministers because it was a parliamentary.

Fast forward to the 1981 elections. Did you know of the alleged cheating, rigging of the elections?

I would not make a judgment as to whether those were rigging or cheating. I'm not a politician.

There was a time in fact, I recall it was in '81 that he asked me if I would run for a seat in the Parliament.

I said, 'If you make me run, I'll quit, right now.' I'm not a politician, I told him.

1983. Ninoy Aquino was assassinated. What were your thoughts at the time?

It was probably the most difficult time for the Marcos government. As everyone knows, he was not well. He was sick. He just had an operation.

It was a very difficult time in the sense that the commercial banks that had lent us money, pulled out their money overnight. I remember that was around $770 million we lost overnight.

For a time, the reserves of the Philippines were down to $14 million. The total international reserves now is $75 billion.

Did you feel it was a bad time to be in the Marcos government?

All of the entire time I was in the Cabinet was very difficult. I was under attack from a lot of sectors, principally his cronies. That's why I resent being called a crony!

I told President Marcos the only way I could be of use to him is if I could speak to him frankly. So I did. I said, 'if you don't like to hear what I will tell you, you can fire me.'

And yet you stuck with him 'til the end? It wasn't something you could just walk away from?

I could have (walked away). But I felt I was making a difference. I had a very unusual relationship with him. He was a very intelligent person, very kind-hearted. I know him. I was very close. All the time we had lunch together, [we] talked about all kind of things. But I think history would judge him more fairly.

The whole world believes he was a bad guy. But I think he was a simple man, he never coveted wealth for wealth's sake.

In spite of all the ill-gotten wealth stories?

There were ill-gotten wealth, I assume. My job was to stop those hanky-panky

But there were those stuff. But I think I made some headway.

Let's go back to what you said that you resent being called a Marcos crony? Define what a crony is. And what is a technocrat?

A crony was one of his friends who took advantage of their friendship and borrowed from DBP and other government-owned banks at that time.

The technocrats were people who were in key positions in government, particularly in the economy, who were very vital in making sure...

So that will be you and who else?

Cesar was one of those and quite a few others.

So it hurt you a lot that you were called a crony?

Yeah, by this writer...

But it seems to stick, every time somebody is associated with Marcos?

At that time and not many people are still aware of what was actually happening, at that time, it was not even arguable. It was cronies versus technocrats.

Can you be specific? Give us example? How were you at loggerheads with these cronies?

There were a lot of projects that were being given behest loans. They would apply for project, no capital in the company and they would never pay. It got government banks into big trouble.

Did you try to stop it?

That was what my role was. It was difficult. Many of them were friends of Marcos and they would run to him and say, 'Ongpin is a bad guy.'

Pero sabi ko, 'kung yun ang gusto n'yo, I'm out of here. I don't need this job.'

Tell us more of what you did as minister of trade and industry?

It was very difficult to operate effectively during the Marcos era because he was a very unpopular government and we were... All the international funding agencies, the big commercial banks, were all against us. They made life very difficult for us. But we tried. We had to do our best.

Let's go back to the crony issue. Did you make your money before you jointed the Marcos administration?

Well, the answer of course, is yes. I was managing partner of SGV from 1970 until 1979, when I was conscripted to government. It was a big sacrifice for me because the managing partners of SGV are probably the most highly compensated people in the business community here. I don't know if this still exists because I've been away from the firms since 1979. I don't know what goes on. I was in private sector and was conscripted to government. The whole time was very difficult because I had to live off my capital.

And here in this country, if you steal even one cent when you're in government, the whole Chinese community, they would know.

You mentioned Chinese community. Let's talk about what you did with the Binondo central bank? You had them rounded up?

After the Aquino assassination, the commercial banks had pulled them all out. Overnight we had no money to to pay for our imports, for our debts. We had to have a debt moratorium. While this was going on, there was lack of confidence in government. The exporters that earned dollars did not turn in the dollars, they kept them overseas. The importers therefore had no money. It became a very bad situation. The official rate was P11 to $1 and went all the way to P28 to $1 in the black market.

Right now, we have $75 billion in reserves, which I didn't think I would see in my lifetime. The central bank today is doing a lot of great work. I wish we had this kind of money during that time.

Anyway, the only way to make sure that we have dollars was to put fear into those black marketers. The president issued arrest and seizure orders for them. There were 8 of them.
The reality was, the only way I could make sure that they followed my orders... You see, the government didn't have a single cent.

I told them, 'each of you, here's your ASO order. They're undated. If you don't follow my rules, I'll sign these.'

So every night, I'd tell them what the buying/selling rate will be. This went for 3 years.

You cannot get these Chinese black marketers to follow your orders unless there's a stick hanging over them. I let make them profit of 40 cents per dollar. They have a whole market. They buy dollars and sell it to a center point and fly it to Hong Kong and that would be the source for importers.

That was part of the rumor, the dollars were flown to Hong Kong and they'd disappear in some account.

There was a lot of misconception about Binondo bank. We succeeded in bringing down the rate from P28 all the way down to P14. We were successful in controlling inflation.

The only way was fear and intimidation. They had to obey or else I'd jail them. I jailed three of them.

As a minister, did you accept any bribe for any deal?

Well you don't expect me to say yes, no? Absolutely, not. The Binondo central bank, if I wanted to make money, it would have been easy. I would have made zillions of money.

That's why they say in the Chinese community, I think I'm still highly regarded because I never stole money.

They tried everything (to bribe me). They would give Rolex watches to my secretary, I gave them back.

What happened through EDSA revolution? How did you regroup after Marcos left?

The EDSA revolution, it never should have happened. Marcos was bated by David Brinkley who said 'if you're so powerful and popular, why don't you call for a snap election.' He fell for it.

We had just put the country through a wringer. The bills, we were paying short term interest rates in excess of 50% because we had to dry up the economy to control inflation.

Inflation is the greatest evil. If you have hyper inflation, it's a very very damaging thing. It cuts across, doesn't care if you're wealthy or poor because everything becomes expensive.

My late brother was finance secretary of President Cory. When they took over the government, inflation was down to 4% at the time that they took over.

That was a difficult time for you? When your brother committed suicide?

My brother committed suicide two years after he took office. I don't know if you remember, it made good media copy that he (Ongpin) was a Marcos guy and he was Jimmy, my late brother, we were having 'sabong.'

He was part of three-man convenor group. Cory, Sen. Lorenzo Tañada and my brother Jimmy. He was very instrumental in all of that

They did quite well but unfortunately, it was not so easy for me to talk about this because he was in clinical depression. He was not happy. All I know is that I lost a brother.

Let's go to the DBP loan. Were you aware of the 10 waived requirements?

No, I don't think it's even relevant. These loans that DBP made to me were loans that they wanted to give me and one of the most profitable loans they gave.

The loan was fully paid. It was never in default. It was just smoke screen for what had happened, the suicide of Atty. [Benjamin] Pinpin.

It was the only two loans I ever borrowed from them. I had financing from six other banks.

For them to focus on this loan is really beyond me. They started sometime in Feb this year, basically intimidating and coursing their executives into trying to pin me down. Don't ask me why. Somebody up there doesn't like me. I have no clue.

Who is after you? Is this just business or politics?

It's probably a combination of both. I cannot for the life of me understand and will never understand why they chose this loan. It made a lot of money. Behest is a technical term. You cannot call it that if it's fully paid.

The impression is you're not too cozy with the Aquino administration?

I don't think I'm ever cozy.

You're closely associated with Vice President Jojo Binay. Did you support him?

No. I didn't even know him until after he was elected. A friend of mine who's a very close friend of VP asked me if we could have dinner. I said what for? Election's finished. I never contributed.

Did you support any of the candidates?

I didn't contribute to any of the candidates. Maybe that's the problem. They're out to get me because I didn't contribute.

Binay, I think, is a very wonderful individual. If one day he succeeds in achieving his dream of becoming president, I think he'd do a great job for this country.

In this DBP loan, was there any Arroyo connection? That you got it because close kayo ni Mike Arroyo?

No, absolutely not. I didn't even need this DBP loan. I borrowed money from six other banks.

The bank's job is to make good loans. All my loans were fully collateralized, I paid all of them on time.

So walang tumawag na Mike Arroyo na nagsabing bigyan n'yo si Ongpin ng loan?

No. I didn't need him to do any of that.

No doubt, we're friends. Mike Arroyo has been a friend of mine for a long time. I've never denied that. He is a very nice guy. But I didn't use him or need him (for any of my business dealings).

Do you believe it's important to be friends with the powers that be?

I think it goes without saying, not just in this country but any country...

But it appears now that being a friend of Mike Arroyo is considered as a crime in this country. I think it's not fair. I think it's wrong.

They're trying to get you for insider trading?

No such thing. I made a conscious decision beginning 2007 that Philex shares were undervalued. The market had assumed that the mine life of Philex was very short at that time. But I was very bullish on the price of metals, gold and copper.

I was bullish on metal prices so I started accumulating shares.

The first block I bought, 5% I bought from BDO which they inherited when they merged with PCI bank. I kept accumulating.

What was that joke about you fronting for Mike Arroyo?

I've never fronted for Mike Arroyo. Some of the guys were making a joke that it was Mike Arroyo who fronted for me.

How about Ashmore?

Absolutely not true. Ashmore is a $70 billion corporation. In fact that's one of the things I'm concerned about because I represent Ashmore which has $2 billion in this country.

They summoned me to London. I'm meeting them on Monday to talk about this.

It's a very sad situation. It's a smoke screen to divert attention from the suicide of this man.

The Office of Solicitor General asked that DBP officials be suspended. What can you say?

I think it's such a shame that these poor innocent people are affected. Not a crime is committed.

But the OSG asked that they be suspended. I think it's so unfair.

What happens when you're suspended? You don't earn any money. These poor guys are being dragged into this. They're making a bad thing even worse.

The guy, Pinpin, died because he was being coerced to write an affidavit.

Who's behind the new DBP board? Who's going after you?

Frankly, I really don't know. There are rumors.

Let's talk about your personal life. You are married to the same woman for 50 years. In the Rogue article, you mentioned you have two children with two other women. And there were extra curriculars.

I did not say that. What I said was (when I was asked about my weaknesses), I have only one weakness. I really like good-looking girls.

I have only one wife. I do have four children. First two with my wife. I have a German daughter who works with me now. And my 19-year-old son is Australian.

You are the 9th richest man in the Philippines, according to Forbes, with $1.3 billion net worth.

I wish I were. That's completely wrong. It's much, much less. What they did was they took my listed companies, market price and then multiplied to how much of it I owned, which was crazy.

You own many companies.

I have five (PhilWeb, Atok Big Wedge, ISM Communications, PBCom).

You have a lot of your nephews and nieces with you in your businesses, right?

Yes, I think they're good guys. They know what they're doing. One advantage, they won't steal from me (laughs).

I think they're very competent.

Would you say you specialize in bringing in investments?

I have brought in so much investments in this country and I'll keep doing it no matter how they try to shoot me down, saying I did behest loans.

You're now 74 years old. Still no plans to retire?

Why should I retire? I'm enjoying myself, I'm still useful. I'm only half finished with what I want to do.

http://www.abs-cbnnews.com/-depth/09/22/11/ongpin-i-was-technocrat-not-crony

Stock market falls below 4,100 mark over US stimulus doubts

By: Doris C. Dumlao
Philippine Daily Inquirer 1:49 pm | Thursday, September 22nd, 2011 

MANILA, Philippines – The Philippine Stock Exchange index fell below the crucial 4,100 mark, sinking into negative territory for 2011, as a $400-billion stimulus plan by the US Federal Reserve only affirmed bleak economic prospects on the US economy.

The main-share PSEi lost 108.19 points or 2.6 percent to close at 4,096.10, wiping out all gains for the year as the index slid past two key barriers at 4,200 and 4,100.

“Increasingly worrisome external risks came to fore and we remain vigilant.  We expect continued volatility in the interim given the emotionally-driven investment backdrop,” said First Metro Securities head of research Mark Angeles.

With this sell-off, the local index is now behind by 103.9 points or 2.5 percent of its end-2010 level.

The day’s downturn reflected the overnight bloodbath in Wall Street that saw the Dow Jones Industrial Index sink by 283.82 points or 2.49 percent to 11,124.84 as the US Fed announced a portfolio shuffling program to drive down long-term interest rates and perk up the economy.  But this was only taken as cue that the much-awaited full US economic recovery might be far off.

Investors sold down local equities as global risk aversion intensified.  All counters were in the red but the financial and mining/oil counters were the hardest hit, both falling by 3 percent.

There were five decliners for every single gainer at the local market.  Value turnover amounted to P4.95 billion.

PLDT, AGI, Metrobank, ALI, EDC, Meralco, BDO, SM Prime, Megaworld, Aboitiz Power, Semirara, BPI, SM Investments, AEV and URC led the index lower.  Lepanto A (open only to local investors), NiHao, Petron and Lepanto B (open to both local and foreign investors) also fell in heavy trade.

Among the few stocks that bucked that downturn was Abra Mining, which also made it to the day’s list of heavily traded stocks.

http://business.inquirer.net/20715/stock-market-falls-below-4100-mark-over-us-stimulus-doubts

ICTSI keen on ‘several’ overseas projects

Tuesday, 20 September 2011 19:39 VG Cabuag / Reporter 

PORT operator International Container Terminal Services Inc. (ICTSI) said it has submitted “a lot of bids” to operate or manage several other port projects all over the world, including facilities in Africa, South Asia and Latin America.

ICTSI executive vice president Edgardo Abesamis said the company, which is fast becoming one of the world’s top port operators, submitted its intent in port projects overseas and these are in the various stages of development.  

To expand its international operations, Abesamis said ICTSI is looking at either responding to bid invitations from various authorities or making a pitch to governments to develop a new port. 

“We are just replying to several bid invitations from various port operators around the world and we don’t know when it will be awarded to us or to another company that we are competing with,” Abesamis told reporters. 

“We are just waiting for the decision of the port authorities on whether ICTSI will emerge as the winning bidder,” Abesamis said.

Abesamis said it had placed a bid to operate a Bangladesh port five years ago but the port authorities there have yet to decide on the tenders. ICTSI also joined a bid to operate port in Costa Rica, but the contract was given to Maersk. 

“It’s hard to say if we will bag a new port contract this year because we just respond to bid invitation by various governments,” he said. 

Earlier this year, ICTSI dispatched a team to Africa to study the possibility of expanding its operations in that continent. 

ICTSI has established ICTSI Africa (Pty) Ltd. for this purpose. Its subsidiary will be registered in Cape Town, South Africa with developing and managing port terminal assets in the African region being its main purpose.

“But right now the team that we have dispatched has nothing in particular to report to us yet,” he said. 

The company is currently expanding its flagship port, the Manila International Container Terminal, and is allotting around $110 million to construct Berth 6 and to purchase new cargo handling equipment.

ICTSI is looking at operating the new berth within the first quarter of next year as the company is awaiting delivery of two quay cranes worth about $2.5 million each as well as six rubber-tired gantries worth $1.2 million and other principal cargo-handling equipment worth about $1 million.

ICTSI is involved in the operations and development of 22 marine terminals and port projects in 17 countries worldwide. 

http://www.businessmirror.com.ph/home/companies/16788-ictsi-keen-on-several-overseas-projects

Investors cautioned on PH stocks

By Miguel R. Camus, BusinessMirror

Posted at 09/21/2011 9:36 AM | Updated as of 09/21/2011 9:36 AM

MANILA, Philippines - Philippine stocks are among the most “crowded” in the region on a net foreign-buying basis, a status it shares with close neighbor Indonesia, according to Credit Suisse Group AG.

The Swiss bank cautioned investors in the Philippines in a research note on Tuesday, saying valuations in the local stock market are “stretched” and the country is associated with downgrades to consensus earnings-per-share.

Credit Suisse added the Philippines is the “most exposed” to recent gains in rice prices and that its reliance on overseas workers’ remittances means the economy is not as domestically driven as some investors perceive.

Overseas investors have been net buyers of $1.27 billion of Indonesian equities, and purchasers of a net $475 million of Philippine shares, the report said. The Philippine Stock Exchange benchmark index fell 2.05 percent to 4,219.82 on Tuesday. The measure tracked losses in the rest of the region on Tuesday and on Wall Street the night before.

Jonathan Ravelas, chief market strategist for Banco de Oro Unibank Inc., said the report highlights the risk-averse sentiments around the globe.

“This is more of an emotional market. There is still an over-effect from all that is happening on Wall Street and the Europe debt [crisis]. It highlights that we are not immune to global headwinds,” he said in a phone interview on Tuesday.

The report comes as Standard & Poor’s cut the sovereign credit rating of Italy by a notch, fueling fears that Europe’s debt problems are far from over.

Ravelas reiterated that further dips in the market should be taken as a sign to accumulate Philippine stocks
given stable economic fundamentals in the medium-term. He said reports suggesting the valuations in the Philippines are expensive could be “tactical” or short-term recommendations.

“I would say what we are seeing is more of an adjustment than a warning bell,” he said.

In July emerging-markets investment guru Dr. Mark Mobius called Philippine stocks expensive relative to stocks offered in other developing economies.

Mobius, who heads Templeton Emerging Markets Group, pointed to the Philippine market’s lack of scale and liquidity to attract larger funds.

http://www.abs-cbnnews.com/business/09/21/11/investors-cautioned-ph-stocks

Biz Buzz: Chinoys scammed again

the staff
Philippine Daily Inquirer  
1:00 am | Wednesday, September 21st, 2011 

It’s sounding almost like some kind of financial scam has to hit the affluent Binondo Chinese community every now and then.

The latest edition of this recurring story unraveled only last week, according to our sources, when a Filipino-Chinese “forex trader” absconded with the investments of several family members and friends.

“Forex trading?” Well, strictly speaking, the actual trading of dollars in Binondo has slowed down in recent years after the relative stability of the peso against the US dollar virtually eliminated the exchange rate differential between the formal market and the so-called “gray market.”

Apparently, what is called “forex trading” nowadays is somewhat of a misnomer as it involves trading of highly leveraged (and highly volatile) foreign exchange futures contracts.

These contracts—which are basically sophisticated derivatives contracts—can deliver large gains to the clients, but can also result in devastating losses once the markets move against the investor (something that can happen in seconds).

There is no formal futures exchange in the Philippines so investments of this nature are traded by locals online in virtual exchanges offshore.

It is this kind of activity that this Chinoy “trader”—whose initials are NT—was allegedly engaged in. After suffering massive losses, NT (who is said to be related to the owner of a popular Chinese restaurant in Greenhills) supposedly “disappeared” and is now in hiding.

The damage to his irate and despondent “investors” has been estimated to be close to P1 billion.

Ouch.—Daxim L. Lucas

PLDT trumped by Smart (Gilas, that is)

Philippine Long Distance Telephone Co. was supposed to hold a special stockholders’ meeting Tuesday to approve a scheme aimed at addressing the recent Supreme Court ruling against its foreign ownership structure.

At the last minute, however, the company declared that it had failed to muster the required quorum to hold the meeting (where the plan to issue new preferred shares would have been put before its shareholders).

No quorum? No rush, as an appeal with the Supreme Court is still pending. Of course, it didn’t help that PLDT chair Manny Pangilinan was spotted in Wuhan, China, cheering on the Smart Gilas basketball team (of which he is the prime patron).

And before anyone accuses the telco tycoon of prioritizing basketball over business, note that his timely intervention in the citizenship issue of two key Gilas Fil-Ams helped the team secure a sweet “come-from-behind” win over Jordan.

Of course, the citizenship certification was helped along by the Department of Foreign Affairs headed by Secretary Albert del Rosario, himself a former PLDT director.—Daxim L. Lucas

The golden quest

Stock pundits in search of gold mining plays have recently turned to United Paragon Mining Corp. on prospective windfall from the change in mining fortunes of businessman Alfredo Ramos. Since August, trading on UPM has been brisk on expectations that, after getting tycoon Henry Sy’s group to invest in Atlas Consolidated Mining & Development Corp., Ramos will next work on rekindling UPM’s principal mining project at Paracale, Camarines Norte. Based on latest geological report, this gold mine contains 1.4 million ounces of high grade gold (7 grams per ton).

UPM on Tuesday signed a convertible loan agreement with Alakor Corp. for the P250 million needed by the company to revive the mining project. The company suspended drilling in this project in 2003 due to serious depletion of economic reserves, high operating costs and low metal prices.

Since the situation has obviously changed, Ramos (who also heads the National Bookstore chain) is now more confident of putting more chips into mining.

Meanwhile, there are also expectations that Ramos may share management of Atlas with the SM group. Although his group still owns 45 percent of Atlas, the SM group will be able to raise its stake (from 17.9 percent) once Banco de Oro converts some IOUs into Atlas equity. Asked about this, SM Investments chief finance office Jose Sio said that the Ramos family would continue to have management control of Atlas. Mining is a “portfolio” rather than a “core” interest for SM, Sio often says. As such, he said SM and BDO will only play a supporting role in Atlas’ management.—Doris C. Dumlao

Backing PAL

Here’s something you don’t see every day: The head of San Miguel Corp. speaking authoritatively about Philippine Airlines.

So, is the conglomerate on the verge of slugging it out with its rival, the PLDT group, for control of Philippine Airlines?

The answer is an emphatic “no” from SMC president Ramon Ang. Yes, he is talking to PAL’s “Kapitan,” tycoon Lucio Tan, he said, but stressed that talks were merely brainstorming sessions.

Ang said he was a “very close” friend of the Tan family and, as such, was willing to help secure a partnership with a “famous” foreign airline.

Tan is “awash in cash” and “doesn’t really need anyone’s money” to help prop up the flag carrier, its labor woes notwithstanding, the SMC chief added.

“I am interested in aviation and the Tan family is a very good friend of mine,” Ang said. “We often talk about PAL, so whatever way I can do to help him, I’m going to do it.”

Unequivocal support? You bet.—Amy Remo

ALI comes to Tagaytay

After letting other property developers gain solid footholds in and around Tagaytay City, Ayala Land has apparently decided that enough is enough, and is now jumping into the increasingly crowded fray.

According to our source, the country’s largest real developer by market value is set to launch its first condominium project in the picturesque resort town south of Metro Manila next month.

The mixed-use development—to be located across Discovery Country Suites—the yet-unnamed project will be marketed under the Alveo brand, indicating that it is targeted toward the middle-income buyers.

The multi-phase project will eventually have leisure and mid-rise condos, a retail section and a condotel, and about 150 units will be offered in the initial marketing salvo.

Never mind, of course, that the Ayala Land project will be situated on the other side of the road from the ridge (normally lower priced properties than those situated on the other side, right on the ridge). The structures will be high enough to give residents commanding views of Taal Lake and beyond, we’re told.—Daxim L. Lucas

Nickel looking good

The local nickel mining industry seems to be off to a good third quarter run this year, and companies like Marcventures Holdings Inc.—through its subsidiary Marcventures Mining and Development Corp.—are eager to send out more high-grade nickel ore shipments.

According to company sources, another shipment of nickel is ready to sail. And should Marcventures continue shipping at this pace, it should be able to send out a total of six shipments by yearend totaling 300,000 wet metric tons of high grade nickel.

Last month, company officials confirmed that it had completed its first shipment of 55,600 wet metric tons of high-grade nickel ore from its mine in Surigao del Sur to Zhanjiang Port, China, at $54 per ton.

This is, of course, good news for Marcventures, especially since nickel prices on the world market continue to be “robust” (to put it conservatively).

Will we hear the words “record profits” this year? Possibly.—Daxim L. Lucas

http://business.inquirer.net/20485/biz-buzz-chinoys-scammed-again

Having his cake and eating it too

Published : Monday, September 12, 2011 00:00

Written by : KIM BERNARDO-LOKIN SPECIAL CONTRIBUTOR 

Enrico Dee

THERE is a popular saying that goes, “do the things that you love and you’ll never have to work a day in your life.” This adage rings true for Enrico “Ricky” Dee, who was born into a family of entrepreneurs whose family was into construction, a lumber and hardware store, but who himself eventually took a path all his own. Dee is the president and chief executive officer of the Foodlink Group of Companies, whose food businesses range from numerous fast-food stalls, to chains of restaurants under his name.

Like most Filipino-Chinese families, Dee started to hone his entrepreneurial skills by helping his father in their construction business. But Dee says he felt that there was “no value-added” into the business because it is a commodity trade. According to him, “a wood will still be a wood, not until you make it into a door. So I felt that I needed to do something with value, that I can add more to the value.”

His opportunity came one day in 1985, right outside their village in Bel-Air Makati, when a food court opened. Dee got one of the stalls and put up what he described as a “very small stall selling Chinese food a la carte” and he named it “Chin-Chin” after his son Chino.

He recalls that the food court setting was a new industry at the time and the concept of the “big malls” were just starting and they were able to ride with the progress. Dee says they started opening in the food courts in malls like SM North Edsa and eventually had branches in Cubao and Makati under the names “Chin’s Express,” “Inihaw Express” and “Handaan Express.”

Today he says they have roughly about 80 stalls in all major malls all over Luzon. The Foodlink Group of Companies is structured into three divisions: the fast-food where they operate the stalls which employ about a thousand people; the second division would be the stand-alone restaurants which include “Mesa,” “La Mesa,” “Mangan,” “Crocodile” and two high-end restaurants “Kai” (Japanese) and “Cerveseria” (Spanish/Tapas Bar) in Greenbelt 3. The third division is the food concessions, where Foodlink handles the companies’ in-house canteens and feed about 25,000 people a day. In this category, Dee says they partnered with big companies like Toyota, the Ayala-owned Integrated Microelectronics Inc. and basically all tech companies in Batangas, Laguna, Cavite, Honda Philippines and still many other multinational companies inside industrial parks.

Looking back he says, his entry into the food business was just all “by accident.” Whenever asked, this accomplished restaurateur would half-jokingly say that he simply “loves to eat and lives to eat.” But adds that he also must have been influenced to go into the food business because he comes from a large family that loves to gather around good & well-cooked meals and this is where his palate was probably enhanced. In return, he must have also influenced his family somehow when he went into the food business because one of his brothers eventually became a chef too out of their love for eating “good food.”

In analyzing their sector as a whole, Dee says that right now there seems to be a “correction time” in their industry. He thinks this is because there is a saturation of the market already and what he calls a “cannibalization of the market.” According to him, this is brought about by too many choices and too many malls within the same geographical area, who service only the same number of customers. On the other hand, he says this situation is good for today’s modern Filipino families, who now have so much more choices at very reasonable prices. As a result, Dee observes that more families now prefer to just “eat out” instead of going to the market to buy the food ingredients and cooking them at home, an option that is totally time-consuming and takes away precious time bonding with the family instead.

Looking forward, he says that the “take-out and delivery” will be the next area of growth. This is because the trend is changing especially for the average Filipino families whose palates and knowledge of food choices from around the world had increased tremendously, when compared to a decade or two ago. He also notes the rise in the number of culinary schools in the country and being a “chef” as a career choice.

As for Dee, he says he simply prefers to be called a businessman, especially because he says he doesn’t even cook, although he is very keen on the taste and presentation of food. He also loves to travel with his wife and family, he says, to keep himself attuned to the latest trends in the food business globally or what he calls “the feeding of the eyes.” Travel is also a great way for him to unwind and spend quality time with his family and friends.

Right now Dee says he is going into another type of business—real estate and mall development especially in the provinces. He has put up another company for this, the CentralMall which partnered with the Save More supermarkets of the SM Group of Companies. He explains that this move is actually related to his currrent type of business and is part of natural progression. But that story will have to be for another time, another day, he says. Suffice it to say, he’s happy to have pursued his passion for eating and make it very profitable for him. Its also one good example of “having your cake and eating it too.”

Son of owner not allowed to eat in exec lounge

By: Theresa S. Samaniego
Philippine Daily Inquirer  
9:48 pm | Saturday, September 10th, 2011 

RAUL Joseph Concepcion

At a young, tender age of 7, Raul Joseph Concepcion, unlike most other kids, spent his extra waking hours working for the family business.

Concepcion tells SundayBiz that he actually enjoyed those times when he was tasked to punch cards of different colors, stack them together, and after which he would use these to play monopoly.

But the harsh reality of working in a “real office” struck him hard when at the age of 11, Jojo, as he is fondly known, was sent to the company’s factory to finally get his hands dirty.

It was ironic that the present chief of Concepcion-Carrier Air Conditioning (CCAC), one of the country’s leading provider of cooling solutions, then had to work with two conditions under his father’s explicit orders: one, he cannot work in an air-conditioned room and second, he cannot eat in the executive floor so he can truly mingle with their factory workers.

Son of owner

“The monicker really given to people like myself is we are SOO [son of the owner]. But in my father’s case, you have to earn the title, for you to be a COO or CEO,” Concepcion explains, adding that they all had to work hard and know the company from the bottom up. This was why all his free time in the mornings were spent in the office to learn.
Coming from a family of mostly businessmen, Concepcion relates that their dad has always been very clear about them having to work for the family business.

THE MULTI-AWARDED Concepcion-Carrier Air
Conditioning Company plant.

“We were always expected to work, so that expectation level was brought up from day 1. We were expected to manage the business,” he says.

Admittedly, Concepcion says the “brainwashing” done to them by his father made it a little easier for them to accept the fact that they would soon run the business.

Food, according to him, was also one of the baits that his father used to entice them to work.

“We had an open budget, but we had to eat with the workers. We can go to the canteen and order everything we want. That was the bribe,” he relates.

When asked if he thinks that his father became too imposing for him to like the job, Concepcion notes that he didn’t see it that way as he has always wanted to work for the family’s business.

“I always dreamed of working for and leading the company. It was something really expected of me so it wasn’t very difficult for myself to adjust,” he shares.

Deemed as the family’s favorite, Concepcion admits that his parents may have spent more time nurturing him and exposing him to the business which helped him to really want to come into the family’s business.

Living abroad

Concepcion’s sheltered life, however, took a strange turn when he was sent abroad to study.

“My parents decided for us to experience the world. They wanted us to experience living alone in a less protective environment,” he says.

“The problem is in the Philippines is that you live in a very protective environment – you have your yayas, your maid, your driver so you don’t experience life,” he adds.

Concepcion relates that he had to live separately from his family for about 10 months and stay with people he didn’t know.

This setup, he claims, had helped build his confidence level and his character.

Add to that the fact that living in the US was a different experience altogether for the young Concepcion, who was then forced to learn to do things by himself –from folding his bed, doing his laundry to cleaning his area. He was likewise lumped with the other Asians since during that time, not too many Americans had seen a Filipino in their entire lives.

“This is the ’70s and the ’80s, so imagine going to that environment. It builds a lot of self-confidence in you and that experience is really what carries you through life,” Concepcion says.

He adds that his early marriage, although a challenge, has likewise helped in shaping him for who he has become today.

Honing skills

It was in 1987 that Concepcion officially joined his family’s company, Concepcion Industries Inc.

He, however, was given a different task by his father, who had then just decided to venture into agriculture, having a bought a prawn farm in Pangasinan for him to manage. From scratch, Concepcion was able to grow the business and at the same time, hone his own managing skills.

“Again, I’ve had a lot of learnings from that. Growing the farm developed my business style and philosophies. The farm taught me to work very hard. I was even then called  ‘boy putik’ because I was always muddy, but I took it as part of really learning the business, and that really brought down the philosophies and values I had in running this business,” he explains.

He then took various positions at the credit and collection, manufacturing, sales, after sales service and then finally went for the corporate, eventually landing in the position of CEO.

Challenges

According to Concepcion, there are multiple challenges in running the business, such as dealing with changes of the people and the environment.

“People tend to underestimate managing a business here in the Philippines. Demands of consumer and business are changing. The rules of the game are changing. My competition today is not locals. It’s the foreign companies, the multinationals whose companies’ total valuation is bigger than the Philippine economy,” he explains.

But one of the more daunting challenges will be from the family point of view in the generation of leadership, how is the baton passed from one generation to the next.

“When you join a company and you’re the owner, am I there because of my name or am I there because of what I can do? I think that challenge was more to myself than to the employees. Proving that you know we were worth the position that we carry. That, I tell you, is the biggest challenge faced by companies like ourselves where you have a family corporation, where you tend to tangle up family affairs and business affairs—that’s very critical,” Concepcion explains.

But Concepcion has proven his naysayers and detractors dead wrong.

As the third generation Concepcion in the airconditioning business, Jojo has diligently carried his family’s heritage, taking the joint venture between Concepcion Industries and Carrier Corp., to lead the way as the company became the country’s most trusted provider of innovative cooling solutions.

And despite the success of the company, Concepcion says he remains hands-on in the business.

“I don’t micro manage. You have to know your staff. I’m very easy to relate with. That’s the advantage – people can easily come to me, talk to me and we discuss. but I challenge them. Every time, I try to raise the bar, motivate and challenge people to do best,” Concepcion concludes.

At present, CCAC’s market leadership has been borne out of its strength in offering the market the best cooling solutions and backing this with excellent after sales services. These cooling solutions, according to CCAC, are defined by individual customer needs and are adapted to Philippine weather conditions and use.

By end-2010, CCAC registered a 32-percent growth in its total sales to P4.5 billion. With the overall AC market earning P13.8 billion last year, CCAC’s sales represented 45 percent of the overall share with 250,000 units sold during the period.