Investing Stocks in Philippines

Monday, May 7, 2012

Stock News 2012: Jardine buys 50% of Rustan's Supercenters

Old Office of H.K. Dairy Farm in Pok Fu Lam, Hong Kong 中文: 香港牛奶公司於薄扶林的舊辦事處 (Photo credit: Wikipedia)
The Tantoco family, who successfully turned its modest buy-and-sell venture into a high-end retail store chain, has sold a 36-percent stake in Rustans Supercenters Inc. (RSI) to leading pan-Asian retailer Dairy Farm of the Hong Kong-based Jardine Matheson Group while the Spinnaker Group also sold its 14 percent to the Jardine Group.

RSI operates Rustan’s Supermarkets, which cater to the sophisticated, affluent segment of the consuming public; and Shopwise which targets the middle market.

The purchase will serve as a springboard for Dairy Farm’s strategic plan for long-term growth and further expansion in Asia. It would also mark the group’s entry in the Philippine market.

Dairy Farm offers high quality fresh foods and consumer and durable goods in its supermarkets, hypermarkets, health and beauty stores, and convenience stores under well-known brands such as Giant, Shop ’N Save, Foodworld, Mannings, Wellcome, Hero, Guardian, and Health Glow.

For its home furnishings, Dairy Farms operates under the IKEA brand in Hong Kong and Taiwan.

The Tantoco family’s partnership with Dairy Farm is expected to accelerate the expansion of Rustan’s Supercenters and heat up competition in the multi-billion peso industry, which is currently dominated by retailing giant SM Group.

Puregold Price Club Inc. ranked second in the supermarket/hypermart industry.

RSI earlier announced plans to step up its presence outside Metro Manila, by opening branches in Cebu and Cagayan De Oro this year. The group intends to be the most preferred one-stop shop destination for fulfilling the basic needs of the Filipino family.

The move is aimed at capitalizing on the rising middle-class and increasing value consciousness across various income levels.

RSI currently has 10 hypermarkets across the country.

Aside from the supermarkets and the department stores, the Tantocos also owns the Marks & Spencer and Starbucks franhises as well as other companies including Store Specialists Inc. which brought luxury brands Gucci, Salvatore Ferragamo, Tod’s, Prada, Louis Vuitton, Bottega Venetta and Marc jacobs to the Philippines.

Dairy Farm, on the other hand, has presence in Hong Kong, Taiwan, Vietnam, Singapore, Malaysia, Indonesia, Brunei, India, Macau, and mainland China.

It also has a 50% interest in Maxim’s, Hong Kong’s leading restaurant chain.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=804636

Stock News 2012: Philex eyes Chinese partner in Recto Bank

Photo of Manny (Photo credit: Wikipedia)
The group of businessman Manuel Pangilinan is negotiating with one of China’s biggest firms for possible oil and gas exploration in Recto Bank, which is near the disputed Spratly Islands.

Highly placed sources said Pangilinan flew to Beijing a few days ago to meet with officials of the state-owned China National Offshore Oil Corp. for a possible joint venture in Recto Bank in Western Palawan. CNOOC is China’s biggest offshore oil and gas producer.

The Pangilinan-led Philex Petroleum is also in talks with other foreign oil industry giants for the development of the resource-rich Recto Bank. Sources also said prospects for a China project are high for Philex-controlled Forum Energy Plc.

They also said possible joint ventures in mining were also discussed in the Beijing meeting.

The negotiations for a possible joint gas exploration in Recto Bank came amid a standoff at the Panatag (Scarborough) Shoal off Zambales, involving Philippines and Chinese vessels.

“We are talking about billions of dollars (of investments). You will need an international major. They have the expertise and the marketing power to place the gas,” Pangilinan, Philex chairman, earlier said. “We have talked to a number.”

Forum Energy, a United Kingdom-based oil and gas firm, is doing exploration on Recto Bank under Service Contract 72. When asked earlier if his group was willing to deal with China despite the latter’s incursion into Philippine territory, Pangilinan said: “That is a solution. I think we should be talking to Chinese companies.”

Forum Energy said it needs around $75 million to continue with its drilling in Recto Bank, which showed a potential of producing 16.6 trillion cubic feet of gas.

“You will have to go to a consortium...It could be one or more oil companies that could get involved,” Pangilinan said.

The estimated gas yield in Recto Bank is way above the 3.4 trillion cubic feet of gas in the Malampaya natural gas project in Palawan.

http://www.philstar.com/Article.aspx?articleId=804803&publicationSubCategoryId=63

Stock News 2012: UCPB net profit up 34% in Q1

Loans (Photo credit: zingbot)
Coming on the heels of the formal extension of its corporate life as granted by its shareholders recently, UCPB announced a robust performance for the first quarter of 2012 as its consolidated net income grew by 34 percent to P883.7 million from a year ago attributing it to the strong trading gains and high interest income posted by its business units.

“Businesses normally slow down during this period but we still managed to sustain our growth in 2011. Our strong first quarter performance bodes well for the future of the bank,” UCPB president and CEO Jeronimo Kilayko said.

UCPB took advantage of the volatile fixed income market thereby expanding its trading gains by more than three hundred folds during the first three months of the year to P486.9 million from P111.2 million in the same period last year.

Meanwhile, interest income from loans rose by 15 percent as the bank expanded its loan portfolio to P73.6 million by end of March 2012 from P62.1 as of March 2011.

Consumer loans from the parent company went up at a faster rate primarily due to the bank’s tie-ups with major real estate developers. This provided the bank access to more clients who would like to borrow money for their dream house.

Funding for these loans came from the inexpensive checking and savings accounts (CASA) which amounted to P102.2 million as of end of March 2012 from P98 million a year ago.

CASA comprised 63 percent of the total deposits which rose by nine percent to P162 million in the first quarter versus P148 million in 2010.

And as UCPB’s business grew, management successfully kept the growth of its operating expense at a minimum.

By end of the first quarter, UCPB’s total assets stood at P204 million, 13 percent higher than a year ago while total capital increased by 23 percent to P17.9 million.

UCPB’s first quarter feat comes on the heels of its robust income growth in 2011 which reached P3.05 billion or 25 percent higher than the previous year.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=804441

Friday, May 4, 2012

Stock News 2012: Alliance Global unit hits record sales in Q1

The property group of tycoon Andrew Tan’s Alliance Global Group Inc. (AGI) is off to a strong start, with reservation sales growing 52 percent in the first quarter to a record P16.4 billion.

Given a buoyant property market and a low interest rate regime, AGI said it is optimistic growth will continue for the rest of the year with reservation sales seen hitting P55 billion or an increase of 48.6 percent from the P37 billion recorded in 2011.

The group sells real estate products under Megaworld Corp., Empire East Land Holdings Inc., Suntrust Properties Inc. and Global-Estate Resorts Inc. (GERI). Each of the companies caters to niche markets ranging from the luxury, middle-income and affordable home sectors to the vacation homes segment.

Megaworld, one of the country’s leading residential condominium developers and the largest BPO office developer and landlord, showcases a variety of township projects all over Metro Manila. Each of these live-work-play-learn-shop communities, including Eastwood City, Newport City, McKinley Hill, Manhattan Garden City and Uptown Bonifacio, offers at least 500,000 square meters of residential space and 200,000 square meters of BPO office space.

“Megaworld’s strong performance for the first quarter of this year can be attributed to superior product offerings that address on a large scale the Filipinos’ need for quality, affordable homes in the very best locations,” said Megaworld senior vice-president for marketing Noli Hernandez.

Sales of Empire East and Suntrust, AGI’s middle-income and affordable housing brands, respectively, came from the strong marketing of the companies’ multi-tower condominium developments in the metro and sprawling residential communities in the Calabarzon.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=803330

Thursday, May 3, 2012

Stock News 2012: BDO ready to tie up with other banks for PPP projects

Asian Development Bank, ADB Loan Disbursement Handbook, http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf (Photo credit: Wikipedia)Sy-owned Banco de Oro Unibank, the country’s largest bank, is prepared to tie up with other banks and raise up to $1 billion to finance various projects under the government’s Public-Private Partnership (PPP) program.

BDO chairperson Teresita Sy-Coson said while the SM Group is not interested in directly participating in the PPP program, it intends to play an active role in financing the projects.

“The market here is very liquid. We can do a lof of these locally. We can do a syndication of up to $1 billion (peso-denominated). It will show confidence in the project,” Coson said during a PPP seminar held at the SMX Convention yesterday as part of the parallel activities of the 45th Asian Development Bank Board of Governors annual meeting.

She said that as a bank, BDO would be able to fund a lot of the companies that would be participating in the government’s PPP projects.

Asked which banks, BDO can partner with for the $1 billion syndicated loan, Sy said these may include the other big banks in the country.

“We’ve always partnered with other big banks such as Metrobank, BPI, Security Bank, Chinabank and RCBC. For the government banks, these are the Development Bank of the Philippines and the Land Bank of the Philippines,” Sy told The Star on the sidelines of the forum.

She said the terms of the loan could be as long as 15 years.

Public Works Secretary Rogelio Singson welcomed Sy’s offer, saying that this would help construction companies and many other private contractors.

The government’s PPP Center earlier announced that the Aquino administration plans to accelerate the implementation of its PPP program by bidding out eight to 16 projects this year.

The list of 16 projects includes the P900-million Vaccine Self-Sufficiency Program of the Department of Health; the P25-billion Metropolitan Waterworks and Sewerage System New Water Supply project; a P20.18-billion North Luzon Expressway-South Luzon Expressway Connector Road; a P10.15-billion Mactan Terminal 2 Airport Development; and the P8-billion New Bohol Airport.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=802924

Stock News 2012: Lopez Holdings earnings drop 70%

Logo for ABS–CBN Corporation (Photo credit: Wikipedia)Lopez Holdings Corp. posted a net income of P3.955 billion last year, down 70 percent from the P13.175 billion recorded in 2010 which was propped up by gains from the sale of shares in power utility giant Manila Electric Co. (Meralco).

In a financial report submitted to the Philippine Stock Exchange, Lopez Holdings said net revenues declined 10 percent to P25.047 billion due to lower earnings from its affiliates.

Multi-media conglomerate ABS-CBN registered on earnings drop of 25 percent to P2.4 billion due to the absence of political advertising revenues.

First Philippine Holdings Corp., posted a net profit of P2.12 billion as against P24.85 billion the previous year when it sold a 6.6 percent stake in Meralco.

“ABS-CBN operates in a fiercely competitive market, but continues to make significant investments toward future growth. At the same time, FPH is expanding its renewable energy portfolio through First Gen. We believe their clear strategic directions will allow Lopez Holdings to provide sustainable returns to shareholders over the long term,” said Lopez Holdings president Salvador G. Tirona.

As of end-2011, Lopez Holdings held a 60.3 percent economic interest in ABS-CBN and 46.6 percent in FPHC.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=802927

Wednesday, May 2, 2012

Stock News 2012: BCDA awaits Palace okay on sale of prime properties

Fort Bonifacio 7 (Photo credit: Wikipedia)State-run Bases Conversion Development Authority (BCDA) said it is awaiting Malacañang’s approval of its plan to dispose prime properties.

The sale of idle state assets in the sprawling Fort Bonifacio complex in Taguig will generate as much as P40 billion in revenues for the government, its top executive said.

“We are still waiting for the approval of the President on our disposition plans,” BCDA president and chief executive Arnel Paciano D. Casanova said.

“We have met with the Executive Secretary already and with the Department of Finance representative so we expect the asset disposition plan to be approved within the month,” he added.

BCDA plans to sell the 33.1-hectare military lot in South Bonifacio and another 25-hectare lot also in Taguig.

Casanova said the proposal sent to Malacañang lists all the properties the agency wants to develop or sell.

“For Fort Bonifacio, we are hoping to dispose the property. We could expect about P35 billion to P40 billion,” Casanova said.

In 2010, SM Land Inc., which handles the SM Group’s commercial property development, submitted a P47.9-billion unsolicited offer to develop the 33.1-hectare military lot.

But the potential Swiss challenge did not push through as the offer underwent reviews by the new administration.

“We have submitted our recommendation to the President and it is one of those issues we submitted to him,” Casanova said, refusing to give more details on the asset sale.

But he said the goal is for the government to receive the best value for the land.

“The general policy really is competitive bidding because the assumption is the interplay of market forces would create the best value for the property,” he said.

The South Bonifacio property consists of lands partly occupied by the Army Support Command and Special Services Unit of the Philippine Army, and the Bonifacio Naval Station and Philippine Marine Corps of the Philippine Navy.

Casanova said they are also looking at some strategic landbanking, which involves prime lots being offered for leasing.

Meanwhile, he said idle assets also in economic zones like in Clark Field in Pampanga are not for sale but are open for lease and development deals.

Other assets of BCDA include the Clark Ecozone, Poro Point, John Hay Special Economic Zone and the Bataan Technopark.

The approval of the asset disposal plan will allow BCDA to top its performance last year.

Casanova said the agency was not able to sell any land last year.

Last year, BCDA signed a deal allowing the Metro Pacific-led Manila North Tollways Corp. to manage and operate the Subic Clark Tarlac Expressway for 33 years.

“Now we want to dispose major properties in the area to capitalize on the confidence of the market,” Casanova said.

Following the financial crisis, property developers have been launching projects at a brisk pace to take advantage of robust demand from the residential, office and retail sectors.

Casanova said higher investor confidence will benefit the property sector, particularly the office segment, as businesses expand in the country.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=802925

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