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New bellwether

For the first time in many years, index heavyweight Philippine Long Distance Telephone Co. is under threat of being dislodged as the single most valuable company in the local stock market. The challenger is another formidable household brand: SM Investments Corp. of tycoon Henry Sy a.k.a. “Tatang.”

SMIC, now trading near its record highs, was valued by the stock market at P544.17 billion as of Friday, only a few billion pesos away from the P548.78-billion market cap of PLDT. While the PLDT-dominated telecom industry is undergoing a consolidation and cost-rationalization phase, SMIC has benefited more from the vibrant consumer play in the market.

Although the 9.99-percent Philippine Stock Exchange index weight of Tatang’s holding firm is second only to PLDT’s top rating of 12.2 percent (updated as of Friday) for now, local stock brokerage DA Market Securities said in a recent research that SMIC was “better positioned to provide exposure to the Philippine economic growth story, particularly bright today, as a preferred market in the region, amid troubles in developed economies.”

Including its listed subsidiaries and affiliates, most of which are part of the PSEi like itself, the SM group has breached the P1-trillion mark and now has the highest combined market capitalization in the market. Four other PSEi stocks are controlled by the SM group—SM Prime Holdings (P280.76 billion), Banco de Oro Unibank (P258.18 billion), SM Development Corp. (P54.7 billion) and Belle Corp. (P50.68 billion). Meanwhile, China Bank has P71.38 billion in market cap.

So while SMIC is trading at a hefty price, DA Market is upbeat on SMIC’s long-term prospects “due to its unique position as the Philippine economic bellwether.” Doris C. Dumlao

BDO wild card

Market speculation that the SM group will make a pitch for Philippine National Bank has refused to die down, despite repeated denials from top Banco de Oro Unibank officials. The reason is that many will find it implausible to think that BDO will pass up a chance to cement its leadership, not to mention the fact that it will prevent a rival from dislodging it from its top position. Also take note that the exclusivity period on the talks between PNB and BPI has lapsed last Dec. 15.

BDO is a veteran of the mergers and acquisitions game, big and small, which has enabled the bank to grow assets at a much faster pace than its peers. Also, its principal SMIC (as discussed in an earlier item) has the financial muscle to back up another big M&A. But BDO’s not-so-secret weapon, one that will allow the bank to make a firm proposal promptly—if and when the Sys decide to go for it—is that BDO has someone from its team who knows PNB inside out. This is no other than PNB’s former chief finance officer Carmen Huang, who may have sufficient institutional memory of PNB that could beat any new due-diligence audit. But as Huang presumably knows PNB too well, the flipside is that this could also make BDO more conscious of prospective integration costs.

Meanwhile, the lapse of exclusivity discussions only means that it is now open season for more suitors. Given the Ayalas’ big bold moves recently (remember the still ongoing Ortigas buy-in saga), we know the Castilaloys don’t give up so easily these days. Doris C. Dumlao

Youthful Titoy

If you see Philippine Stock Exchange chair Jose “Titoy” Pardo with a bright and youthful visage nowadays, it probably has little to do with the outstanding performance of the stock market.

We’re told, in fact, that it has more to do with science as the former finance secretary of the Estrada administration had undergone a super pricey stem cell treatment in Germany earlier this year. And no, it wasn’t Pardo who sought out the treatment, but was … uhmm … “convinced” by his longtime friend, former President Estrada, to give the newfangled science a try.

Among the personalities said to have availed themselves of the very same German stem cell treatment are Senate President Juan Ponce Enrile, former First Lady Imelda Marcos, former South African president Nelson Mandela and even Hollywood actress Halle Berry.

The treatment regimen set Pardo back by some 15,000 euros or a little under a million pesos. Steep, yes, but still a lot cheaper than the stem cell program offered at the Medical City, we’re told.

And what was used to make Pardo look and (perhaps more importantly) feel younger? “The unformed fetus of a black sheep,” he replied, when Biz Buzz quizzed him about his stem cell therapy. (Having thoroughly researched the process, the 1972 Ten Outstanding Young Men awardee explained why it had to be a black sheep, but Biz Buzz quickly lost track of the medical terminology.)

Admittedly, Pardo’s skin does look firmer for someone in his early 70s, but does he feel more energized, as well? “I do feel more energetic and my immune system is stronger, but I’m not sure if it’s a placebo effect,” he chuckles. Hey, whatever works, right? Daxim L. Lucas

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