Tag: TEL

New Regulation About Ownership for PSE Listed Companies


Implementing Rules on the new interpretation of foreign ownership rule under Foreign Investment Act of 1991 as amended which arose from the recent question of TEL’s ownership status has been a hot topic last week.

source: http://cathysandeen.wordpress.com

The said new rule now clarifies the 40% foreign ownership of corporations on certain industries that are given priority to Filipinos. (A draft of the said SEC Memorandum Circular is available in the SEC website by clicking here). This new rule that now clearly defines the ownership limit is now seen as something that limits Philippines’s attractiveness as the next investment haven.

An article about various reaction market players is in Bworldonline.com as cited below:

source: www.bworldonline.com

Posted on November 09, 2012 09:05:54 PM

Market players buck new foreign ownership rules

Market players on Friday formally raised their objections to the Securities and Exchange Commission’s (SEC’s) draft rules on foreign ownership limits, claiming that investments could take a significant hit.

“Should the definition be extremely tight, it will have second round effect on stifling capital market products,” said Hans B. Sicat, Philippine Stock Exchange (PSE) president and chief executive, in a public dialogue at the SEC.

“The first victim… will be foreign direct investments in this country. The second effect would be on the stock market. I agree with the view it can precipitate a sell-down,” Mr. Sicat added.

The draft rules, issued by the SEC on Monday, came as the Supreme Court last month affirmed a June 28, 2011 decision where it declared that the 40% foreign ownership cap mandated by the Constitution should be based on common and not total outstanding shares of stock.

In its Oct. 9 ruling, the high court qualified that “the 60-40 ownership requirement in favor of Filipino citizens must apply separately to each class of shares, whether common, preferred non-voting, preferred voting or any other class of shares”.

This was restated by the SEC, in Section 4 of the draft rules, as such: “All covered corporations shall, at all times, observe the constitutional or statutory ownership restrictions for each class of shares; provided that, if any class of shares is divided into series of shares and a particular series of shares has different rights, privileges, and limitations, the covered corporation must observe the same ownership restrictions for said series of shares.”

Mr. Sicat claimed the limitations would affect some 13% of the PSE’s 255 listed firms.
(click hereto read full article)

Listed corporation who are required to comply with the foreign limit rule are given 5 years to comply. From the new interpretation the 40% foreign ownership limit is not only confined to common shares/capital of the company which has the voting powers but it is interpreted as that of the corporations entire capital stock. Thus all other series or variations of issued stock must be identified and the rule should be taken into consideration. With this TEL or PLDT of which the bulk of the common shares is owned by Hong Kong based First Pacific will issue Preferred shares with voting rights to reduce the foreign ownership from 64% to 35%.

There are lots of opinion regarding this regulation. First is that such corporation has huge capital requirements which for now can only be augmented by outside investors. Others see this as a reverse reaction since the Philippines now is in the spotlight for being considered as one of the best place to put investments. The SEC is still open for changes and they are leaving their doors open till the end of November before finalizing the regulation.




For my opinion such rule will have some negative effects in the near and future periods. We know the fact the number of investors in the Philippine population is still so small to totally participate in the market and thus to keep the iron from shaping into its intended outcome we have to keep on funding this surge by way of foreign investments. The vagueness may have been cleared but the percentage should be adjusted and some fine tuning be made so that both outside investors and the Filipino populace will be able to have a win-win position over the matter.

If foreign investors decided to pull out investments instead of staying, the problem we will face is who will buy such investments when the Philippine populace is not yet ready and the government needs more cash now in order to fund the growth we are experiencing. I hope the SEC and the market participants will find common ground in this matter so that the current momentum the Philippines has will not be disrupted.

How about you what position would you take in this foreign ownership issue?

See all awesome STOCK REPORTS in PinoyInvestor! (size 375x192)

A Day Trading Experience

It’s Labor Day here in Guam and I had a chance again to day trade. 

day trade at the comfort of your home
source: http://www.borsereview.com
Since my location has a two hour time difference(Guam is ahead by 2 hours from Philippine time) I get to enjoy two things when day trading: One I have a two hours to place my orders and second I have up to 5:00 pm here to trade.
To day I am finally able to sell my TEL for a profit(not so much though but hey profit is profit). I was also able to sell some stocks that kinda just taking precious value in my portfolio so I just disposed some at a few gains. 
I usually do my orders the night before or if time does not permit over the weekend where I have time to analyze the stock I wanted to buy or sell. The extended trading in the Philippine Stock Exchange does help a lot specially for overseas Filipinos who do trade in the local exchange. Some use other online brokers who might be based in the location  the likes of E*TRADE and Interactive Brokers.
To all OFWs and foreigners who do invest in the Philippines thank you and kudos to us, lets keep on investing in the Philippines. 


To help you start in your investing check out my e-book Investing in Stocks at Learn How To Invest In The Philippine Stock Market

TEL: Where To Now?

After all the negativity that lurked in the stock market(and I guess it is still lurking out there in Europe), the Philippine Stock Exchange is again in the positive and 5,000 level area. 
source: http://www.pldt.com.ph/
One of the stocks everybody would probably want to have in their portfolio is TEL(PLDT). I once posted here about TEL’s not so stellar performance in 2011, when PLDT chairman Manuel V. Pangilinan announced in their  FY 2011 Core Income Reports that they are not expecting to have a very bright 201 and even maybe in 2012 but rather see this as a period of re-alignment in connection to PLDT’s acquisition of Digitel. And as everyone knows, PLDT’s share have gone done to as low as 2300 levels for the past months which believe was mainly due to the issue on the capital requirements which finally resolved.

Looking at the chart today I see some sudden rise in the past 3-4 days even in the midst of the turmoil in the stock market world.

When I read and have seen that PLDT started to go south I started buying blocks of shares to take advantage of the low price of this blue chip but having to chunk out huge portion of your portfolio did have a drawback. One is that I missed out profit taking on small stocks that went up during those bearish months. Another is that PLDT’s share price didn’t really drop at an instant but slowly thus I ended up not effectively cost averaging and have to stop buying when TEL was nearly 50% of my portfolio.

A little more and I can see the fruits of my patience.

Some good news I am hearing are below:

 With that, I guess PLDT is again positioned to achieve its stellar performance in 2010 of having an all time high net income of 42 billion.

As for me I am crossing my fingers and hope that in the coming months my patience pays of with TEL.

TEL 2011 Full Year Core Income Press Release

Was checking some of active stocks in the Philippine stock when I got directed to PLDT(TEL)’s website and seen the press release of their FY 2011 Core Income Reports.

To check the report you can check it by clicking here.

source: http://manuel-pangilinan.seebyseeing.net/
From the very own words of PLDT chairman Manuel V. Pangilinan, they are not expecting 2012 to be a high income year but would see it as a period of re-alignment with their latest acquisition of Digitel. He believes that it would take time for the company to realize the benefits of the combined telecommunication companies operation and they are expecting a surge of income starting 2013. 

Also the report mentioned that amidst the capital expenditure related to the acquisition of Digitel, PLDT(TEL) is still able to deliver the minimum dividend payout of 70% of core income. And with that another dividend payout is slated on April this year to fulfill the 100% dividend declaration. I guess such will again make the stock in demand at least for those who do dividend play. 

For those who are accumulating PLDT(TEL) shares, we have to catch dips this year and accumulate as much as we can in preparation for the coming years of PLDT’s profitable operations.

PLDT - DGTL deal finally approved

source: http://teknisyan.net
Got this news today from Businessworld @ www.bworldonline.com
This deal has been hanging since June and PLDT has to sacrifice some in order for this to culminate. The main sacrifice made was a divestment of one of PLDT’s frequencies which would as they say make the playing field level with Globe Telecom.
Below is an excerpt of the news:
PLDT-Digitel deal approved

PHILIPPINE Long Distance Telephone Co. (PLDT) completed on Wednesday its delayed takeover of rival Digital Telecommunications Philippines, Inc. (Digitel), saying regulators had approved the transaction. The National Telecommunications Commission (NTC) confirmed that it had greenlighted the P69.2-billion deal — announced early this year and originally scheduled for completion in June — but also put in place several conditions that included the dominant telco’s divestment of some of its frequencies.

PLDT said it had accepted the NTC’s requirements, while second-ranked Globe Telecom, Inc. — which had questioned the purchase and claimed that it would lead to a return to a monopoly — said it was satisfied that regulators had moved to protect consumers and promote fair competition.

source: http://www.philippinenewsdaily.com

PLDT’s acquisition of JG Summit Holdings, Inc.’s 51.55% stake in Digitel will give the dominant telco some 70% of the domestic mobile market, leaving Globe about 30%. PLDT said it would soon announce a tender offer for the rest of Digitel.

Shortly after PLDT’s announcement, 3.277 billion shares of Digitel changed hands via a cross sale in the stock market at P1.6033 per share.

In exchange for the Digitel stake, JG Summit will get 12.9% of PLDT, comprising 27.7 million common shares at P2,500 apiece.

PLDT also acquired the zero-coupon convertible bonds issued by Digitel to its parent and assumed P34.1 billion in advances made by JG Summit to Digitel.

“After due evaluation of the various factors and issues involved, it has granted the application for approval of the sale and transfer to the PLDT of initially approximately 51.55% equity in Digitel,” NTC commissioner Gamaliel A. Cordoba said in a press conference.

The NTC decision came a day before a 90-day review period was to expire. The protracted regulatory approval period had prompted PLDT and JG Summit to thrice suspend the deal’s planned completion.

The regulator said PLDT would have to continue Digitel’s unlimited text and call services. “Regarding the unlimited services, we want it to be permanent, continuous and we want a nationwide-reach [for these services],” Mr. Cordoba said, adding that Digitel’s mobile service should be kept separate.

PLDT was also required to divest 10 megahertz of 3G frequencies held by Connectivity Unlimited Resource Enterprises, Inc. (CURE), a unit of subsidiary Smart Communications, Inc. CURE’s frequencies will be auctioned off and PLDT will not be allowed to bid, Mr. Cordoba said.

“Another condition requires PLDT and Digitel to continue providing high quality service to their respective subscribers,” he said. 

See all awesome STOCK REPORTS in PinoyInvestor! (size 375x192)

(Click here to read more of this news)

This news suddenly made the price of TEL surge 

source: http://www.pse.com.ph

Coupled with the recent news in the Eurozone that the Greek bailout has finally been made we are hoping that today’s positive news will continually drive the PSEi to rise to its previous high and hopefully bring back the bullish air in the Philippine Stock Market.

Stock Investing is like driving

So many people are still confuse or have many question about investing in the stock market. I know it’s a mind boggling activity and a very serious vehicle or means of investing in a sense that you could be a millionaire or broke in just a second…. only if you don’t know what you are doing.

The key to a successful or profitable stock investing is really knowing what you are doing. That is why it is said to be one of the secrets of the affluent or the rich one because of the lower tax rate(in the Philippines stock transaction tax is 1/2 of 1% of every sale. I heard about a new law being discuss but have no details yet) and two because you are only placing idle funds(remember only idle funds) which could earn higher to fight inflation.
Now why did I say it is like driving?
I am just a newbie driver. I learned  to drive because I have to drive. Because here in Guam public transport is not famous. Yes there are buses but they come every after hour and it is not fast. There are taxis but the cost is not affordable. Driving is still better and it will get you to your destination sooner.

Stock investing is like driving because like stock investing in order to be good at it you must learn it and really focus on it or else you gonna get into an accident. You don’t just drive a car and go into a high way. You need a driver’s license and you must have the will to drive(for those not driving you will feel this “will” I speak of when you get to drive a car… if it is your first time you might have thoughts that you can’t drive because that fear of getting hit or hitting other cars is always in your mind).

You need focus when driving and it also applies to stock investing. Focus on what you are investing on. You have to learn about the company you want to invest, learn its growth potential, and make a strategy on how to increase your holdings on such stock. The thing is when you make an investment and then suddenly the price drop our tendency is to sell it and get another(for first time investors you will go through this just like what I did). If you invested in a sound company with a proven growth and a stable financials it is still possible that its price will drop(look at TEL today). But when a strong company’s price drop don’t just go to panic mode and sell it, you have to learn why it is going down.  When its operations is good and yet the price went down then it could be that the market or investors’ appetite for it slowed down thus the price is stagnant or gradually goes down. On such occasion it is the best time to cost average.

In driving you have 3 mirrors to guide you but always remember to look at what is in front of you or else you will surely hit somebody. Same thing in investing. You have to look what is in front of you, if you need to you can look at your side mirrors and rear mirror if you need to make a turn or change lanes. In investing you must have one direction and that is to earn. There are times that you will be caught in traffic and thus you need to change lane or take a turn. On those instances you use your mirrors to make a safe turn but you are still going to the intended destination. 

I guess that explains it. If you have more queries or if you have questions don’t forget one of the rules and that is don’t be shy to ask questions. Search the Internet go to www.pse.com.ph, call up the online stockbrokers(some have free seminars), join a stock investing forum and post your questions( click here for a stock investing forum), or simple ask a friend who is into stock(click here or this one).

Listed Company Profile: Meralco

We have been waiting for this giant to rise up and be one of the leading stocks in the PSE.

About 2 months ago I was checking this stock and I knew there is something with this company. Being one of MPI‘s gem in their list of stocks and as well as the recent move by SMC the price of MER suddenly rose rapidly at year end it posted a 237.00 and nearly surpass its all time high of 292.00 in the first weeks of 2011 when it posted a 287.00 per share market price.

Originally a Lopez company, the entry of Manny Pangilinan‘s First Pacific Holdings through Metro Pacific Investments have given boost to MER’s planned entry to the power generation sector a move from power retailer to power producer. And the latest is the entry of Ramon Ang of SMC .

Looking at its price it seems to hit another high after the uneasy start of 2011. 

I have seen a rise in its price back in Nov 2010 thus bought some until it went down due to year end jitters. After cost averaging till the end of 2010 I was looking at a 225 target price with a 15% gain but it went far beyond my expectation. Right now it sits at 280.00.

In fundamental aspects Meralco is in good shape having a good current ratio at 1.10 and a PE% of 35 (MRQ source www.reuters.com). Outlook on 2011 is positive and if MER’s plans to get into self-generation of electricity it might have a better market price as what was seen with SCC.