Friday, December 28, 2012


MANILA, Philippines - The holding firm of the country's richest man overtook the country's largest telecommunications firm as the most valuable public company in the Philippines for a day.

SM Investment Corp's (SMIC) market value -- the price of its stock multiplied by the number of outstanding shares -- soared to P562.23 billon by mid-trade on December 26 when its share price hit a high of P902.5.

SMIC eventually settled at P900 apiece at the market's close, reflecting a P560.68 billion market capitalization, an indicator of how much the markets think it is worth.

These eclipsed the market capitalization of Philippine Telephone Long Distance Co. (PLDT), which has long stayed on top of the Philippine Stock Exchange's (PSE) list of most valuable listed firms.

PLDT shares were worth P2,579 apiece on December 26, representing a market cap of P555.26 billion.

However, by December 27, the second to the last trading day of 2012, the share prices and market cap of both companies retreated, bringing PLDT again to the top: SMIC closed at P880 per share and with a P548 billion market cap, while PLDT closed at P2,552 and a slightly higher market cap of P551.37 billion.

At current prices, investors who bought SMIC shares at P547 apiece on January 3, the first trading day of 2012, now have equity assets worth 61% more. On the other hand, PLDT share buyers at P2,554 on January 3 have 0.31% upside as of December 27.
Index heavyweights

The shares of the two have been moving in the same upward trajectory as the PSE index, a basket of 30 of the Philippines' blue chip firms.

On December 26 -- the day SMIC dislodged PLDT as most valuable in the local stock market -- the PSEi hit its 38th record high for 2012.

PLDT has long been an index heavyweight, representing 12.18% (as of December 27), while SMIC trailed as second with a weight of 9.93%.

PLDT, controlled by the group of businessman Manuel V. Pangilinan, is going through an industry-wide consolidation and rationalization stage. Huge capital outlays to prepare its infrastructure for data-heavy services have eaten into profits traditionally based on voice and text services.

SMIC, on the other hand, was founded by tycoon Henry Sy Sr., the country's richest, according to Forbes magazine. SMIC has interests in some of the sectors that benefit from the resilient remittances sent home by millions of overseas Filipino workers. SMIC controls the country's largest mall and retail chain (SM malls), real estate development, and banking institution.

In a recent research note, local stock brokerage DA Market Securities described SMIC as the "Philippine economic bellwether."

DA Market said it is upbeat on SMIC’s long-term prospects since it is “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.” 

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