Fund management firm hikes stake in LT Group

THE CAPITAL Group of Companies, one of the world’s biggest fund managers, has increased its stake in tycoon Lucio Tan’s flagship holding firm, LT Group Inc., to more than the 5 percent threshold requires a disclosure, a regulatory filing showed.

The Capital Group, a global company with assets under management in excess of $1 trillion, already holds about 5.01 percent of LT Group, which owns the Filipino tycoon’s main assets in banking, tobacco, beverages and real estate.

The Capital Group crossed the 5 percent threshold after unit Capital Research and Management Co., a United States-based investment management company, bought 1.75 million common shares of LT Group at P16.30 per share on March 31, 2015.

The shares, acquired for “investment purposes,” are owned by mutual funds under the discretionary management of Capital Research and Management, the filing showed.

The transaction showed that LT Group joined other Filipino companies that benefited from ample global liquidity and a surge in foreign buying in the first quarter of 2015.

LT Group’s market value has gained about 34 percent to P16.30 per share in the three months ending March 31 this year. It last closed at P16.68 per share, down 0.1 percent, on Friday.

The buying comes as LT Group disclosed lower earnings in 2014, which it attributed to the “difficult operating environment” for its tobacco business.

LT Group said unaudited net income in 2014 came in at P4.2 billion against P8.7 billion the previous year. About 52 percent of this came from Philippine National Bank with another 27 percent coming from Asia Brewery Inc.

The large drop came from its tobacco business, whose income contribution amounted to only P99 million in 2014 compared to P3.9 billion in 2013.

The LT Group said unit PMFTC Inc. “continues to be adversely affected by the illicit trade in cigarettes” however, it noted that the implementation of certain tax regulations bodes well for its business “over the mid-term.”

PMFTC is a partnership between Lucio Tan’s group and Philip Morris International.