Changing bellwether
Just as the bears have wrestled control of the stock market from the bulls, telecom giant Philippine Long Distance Telephone Co. has quietly reclaimed the top spot as the country’s most valuable company in the local stock market. To recall, tycoon Henry Sy-led SM Investments Corp. dislodged PLDT, the uncontested market leader for many years, sometime in December 2012.
For now, however, PLDT has snatched back the bragging right in the free-falling market. PLDT ended Tuesday with a market capitalization of P593.71 billion against SMIC’s P588.26 billion. Whether it is due to the fact that defensive stocks like utilities tend to rule when times are tough or to the improved outlook on PLDT earnings or that the earlier excitement over the consolidation of SM’s property assets has waned, the country’s biggest conglomerate takes the backseat for now.
The margin between how much the market values the two companies, however, is still so narrow. This volatile market promises to be neck-and-neck battle to establish which one will end up as the long-lasting local bellwether stock. For now, it’s no longer a race toward price appreciation but a battle for resilience given the capital flight from emerging markets. Doris C. Dumlao
Change of heart
Speaking of changes, the Philippine Stock Exchange is reconsidering earlier plans to collapse its Capital Market Integrity Corp. (CMIC) into a division within the bourse. Instead of reverting to the antiquated set-up of a market regulation department under its wings, the PSE is now almost sure to keep intact the current CMIC structure, awaiting only an imprimatur from the Securities and Exchange Commission. This sends a good signal that the PSE is continuing—and not backtracking—on efforts to improve governance.
SEC chair Teresita Herbosa is supportive of this change in stance. “Having a separate, distinct and independent CMIC will keep it true to its role as the private watchdog, thus ensure fair transparent market,” Herbosa said in response to a query from Biz Buzz yesterday.
Cost is a nagging issue behind the PSE’s move to fold back CMIC in its organization. Apparently, the PSE now realizes it can “reboot” the CMIC without changing the structure. In other words, change the captain and the crew instead of changing or rocking the boat. The PSE has yet to disclose, however, any changes in CMIC leadership (if any) or what the final structure will be. Doris C. Dumlao
‘Show us the money’
Japanese billionaire Kazuo Okada’s failure to bag a local partner for his $2-billion casino resort in Entertainment City Manila seems to be making a politician here uncomfortable. Unfortunately for Okada, we are talking about Manila Rep. Amado Bagatsing, chair of the House Committee on Games and Amusement.
Bagatsing told Biz Buzz that Okada’s unsuccessful discussions with the Gokongwei group’s Robinsons Land Corp. was raising doubts about the financial capability of Japan’s “Pachinko King” to complete the Manila Bay Resorts casino project.
Bagatsing said Japan’s 20th richest man in the Forbes list (Okada is worth $1.5 billion as of April) might already be facing financial constraints after the forced redemption of his stake in Wynn Resorts in Las Vegas at a steep discount. This followed allegations that he violated US anti-corruption laws amid a falling out with erstwhile partner Steve Wynn.
The billionaire and his companies, including Universal Entertainment Corp., are also being investigated in the United States.
To recall, Bagatsing was among those who doubted the bases of media reporting on Okada’s corruption allegations but it seems the congressman has had a change of heart.
He said he would ask Pagcor to require Okada to prove that he has enough resources to complete the massive casino project or give up his license. He suggested that Okada put into a bank here a “goodwill” amount of at least $500 million, more than three quarters of the $650-million investment Pagcor required. His reasoning: Why risk all the uncertainty when there are several unnamed foreign and local players wanting to get Okada’s valuable license?
As of Saturday, Bagatsing has yet to transmit his request to Pagcor but the gaming regulator has thumbed down his request. In a text message, Pagcor spokesperson Maricar Bautista said it would be “unfair to impose additional requirements on any proponent in the middle of the game.
“The other proponents were not required as well,” she said, adding that a $100-million bond requirement has been fulfilled by Okada thus far. Miguel R. Camus
MVP on Rolls Royce
Since the launch of Rolls Royce in the Philippines, there has been a lot of speculation of who among the country’s “Who’s Who” are getting their hands on the luxury car.
There has been talk that the Rolls Royce Ghost unit on display at the appointment ceremony of Rolls Royce Motor Cars Manila, the Philippines’ official Rolls Royce dealership, was already spoken for. Some said it had been bought by TV host Willie Revillame and that the comedian was handed the key at the event. Another “usual suspect” is businessman Manuel V. Pangilinan, or MVP, who is chair of PLDT and the ABC 5 television network.
On the sidelines of a launch event for this year’s search for TOYM (Ten Outstanding Young Men), Pangilinan was asked whether he did buy a Rolls Royce. That is not true. I don’t have the money, Pangilinan said in jest. But did he inquire? “No, they approached me before. That was a long time ago,” he said. Riza T. Olchondra
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