Biz Buzz: 2016 ‘watchlist’

In the heat of the Senate probe on Vice President (and leading 2016 presidential contender) Jejomar Binay, a lady stock broker who is closely related (by affinity) to one of the people tagged at the hearings left peers at the Philippine Stock Exchange flabbergasted as she dared other brokers to declare who among them harbored anti-Binay sentiments.

This happened during the early days of the Senate testimony by the embattled veep’s estranged associate, former Makati Vice Mayor Ernesto Mercado.

Lady broker walked into the PSE Ayala’s broker’s lounge to see a group of 15 to 20 brokers and a few guests glued to the television just when Mercado was testifying, several eyewitnesses told Biz Buzz.

Witnesses recall lady broker suddenly blurting out for everyone to hear: “Sino dito ang against Binay? Magsabi kayo. Magtaas ng kamay. Tatandaan ko!” (Who among you here are against Binay? Speak out. Raise your hand. I will remember!).

“We were shocked,” an eyewitness says. The people were probably more surprised than scared of the surprise headcount. Suddenly, a mestizo guy in the lounge raised his hand, but there was no reaction from lady broker, who apparently didn’t recognize the guy because he wasn’t a broker.

Whether or not the relative was wrongfully implicated in the Binay deals—as were many other Binay friends who had to endure grilling from the Senate—the emotional outburst certainly didn’t help generate sympathy for the accused.–Doris C. Dumlao

‘Better than the presidency’

Speaking of the presidency, Vista Land & Lifescapes founder Manuel Villar Jr. has a new goal which he thinks is better than being CEO of the land– to see VLL with a market capitalization of P100 billion (now at nearly P54 billion ).

He also wants to see Starmalls Inc. (now at P60 billion) separately valued by the market at the same P100-billion level.

“Isn’t P100 billion (market cap) a better target than the presidency?” he said in jest at the sidelines of the recent VLL briefing.

While saying he was just kidding, he added it was a “logical” aspiration.

Villar said he was “not happy” with the price to earnings (P/E) multiple of VLL, at below 10x and much lower than comparable issuers. He believes VLL’s P/E ratio should be around 13x, which means investors must be willing to buy shares at 13 times the amount of money that the company can earn per share.

Over time, Villar said VLL would develop more leasing income. Consolidating VLL and Starmalls could be an option in the future similar to the route taken by the SM property group, he said, but it was not ripe yet at this point.

Villar said the whole group was looking “seriously” into harnessing solar energy for its shopping malls and housing projects and, outside the group’s publicly listed companies, it may also venture into solar power generation.–Doris C. Dumlao

PAL back in the red

Just how bad have things gone at Philippine Airlines (PAL) following the Lucio Tan group’s management comeback?

According to our sources, PAL’s consolidated losses from Oct. 1 to 19 this year reached $22 million. This is on top of the $28 million the company lost in September. That’s $50 million in losses since the Tan group took over.

This erases the $18.6-million profit the company booked from January to July under the stewardship of San Miguel Corp. president Ramon S. Ang.

PAL’s old/new president and chief operating officer Jaime Bautista has said as much in recent statements to the press. He blames all those planes that the SMC-led management bought for the airline.

But our sources say San Miguel had a long-term plan for those planes that the Lucio Tan group lacks the financial muscle to execute.–Paolo Montecillo

Collaboration

With the ownership row over the Ortigas clan’s OCLP Holdings Inc. finally resolved, many are wondering what becomes of the company, essentially a one-of-a-kind joint venture between Henry Sy’s SM Group and the Zobel family’s Ayala Land Inc.

Some speculate that the story, which ended the feud between two Ortigas family factions, could soon result in an initial public offering, which was the plan all along.

That would be an enticing prospect for some investors, given the prestige and deep financial backing provided by the Sys and Zobels.

We’re not even talking about OCLP’s attractive land bank, composed of 55 hectares of prime Metro Manila land, including the Greenhills Shopping Center and parts of the Ortigas Business District.

But SM Prime’s Hans Sy told Biz Buzz an IPO would happen “in the future” but not now.

Sy said he was keen on working with the new board, likely an even split between the SM and Ayala Land camps with a so-called swing vote from the Roman Catholic Church.

Everyone knows SM and Ayala Land tend to go different directions, and for different markets, when it comes to development.

But Sy said OCLP would be a good test on how well both groups could collaborate, which might also pave the way for the resolution of disputes in Bacolod, a Quezon City railway common station and the SM Aura mall, apart from possible new business ventures together.

Big goals but you don’t become a large business without dreaming big, right?

On a lighter note, Sy noted how they could “learn” from the way Ayala manages things, saying the SM way was “more hands on” but more time-consuming.

With SM and Ayala committing to growing OCLP, it would be interesting to see how this partnership pans out. We usually say abangan (stay tuned) in this space but to be sure, let’s give this venture a few more years.–Miguel Camus

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