INSIDERS’ trades. On December 2 when Philippine Long Distance Telephone Co. (PLDT) opened at P2,722, hit a high of P2,750 and closed at its low of P2,706, Ray Espinosa, a member of the board, bought 500 shares at P2,710 each. The acquisitions increased the number of PLDT shares he owns but are lodged with PCD Nominee Corp. account to 6,200. He also holds 13,043 certificated PLDT shares. PLDT climbed to a high of P2,890 on October 31.
As of November 29, Frederick Castillo Lopez, a vice president of TransAsia Oil and Energy Development Corp., owned 5.02 million TransAsia shares after buying 100,000 shares at P1.48 each. TranAsia closed at December 2 at P1.46.
Gerardo Domenico Antonio Lanuza, a member of the board and a vice president of Philippine Realty and Holdings Corp., bought 490,000 shares in five trades—120,000 shares at P0.45 each on November 18; 200,000 shares at P0.45 on November 20; 20,000 shares at P0.44 on November 21; 100,000 shares at P0.44 on November 22; and 50,000 shares at P0.42 on November 26. The acquisitions increased to 6.802 million, or 0.138 percent, the number of shares he owns in the company. PhilRealty closed at P0.425 on November 29 when the stock was traded.
Buyback. Reacquiring own shares not only increases the percentage holdings of stockholders; it also is expected to increase the stock’s market price. But the latter does not always happen, especially in a falling market when a stock falls from 30-day high it earlier recorded.
Here is an example of such stock: South China Resources Inc. has allocated P120 million for the two-year reacquisition of 100 million of its own shares in the open market. Based on its recent filing, it may not meet its target.
As of December 2, South China Resources had 3.629 million treasury shares including its acquisition of 100,000 shares at P0.92 each that reduced its outstanding shares to 902.931 million. The company began buying back its own shares on December 22, 2011 and, as per timetable, would end it on December 22, 2013.
The stock had hit a 30-day high of P1.10 and dropped to a 52-week low of P0.85 on November 28. It recorded a 52-week high of P1.40.
‘Losing’ stockholders. South China Resources has three significant stockholders. Belen Castro owns 231.853 million shares, or 25.622 percent of 902.931 million outstanding common shares as of December 2; Edgardo Reyes, 229.853 million shares, or 25.456 percent; and Wilfredo Reyes, 226.853 million shares, or 25,124 percent.
Despite the buyback, the three stockholders are “losing.” At 52-week high of P1.40, Belen’s holdings were worth P324.594 million; Edgardo’s, P329.794 million; and Wilfredo’s, P317.594 million.
Computed at the company’s reacquisition price of P0.92 on December 2, the three stockholders incurred “paper loss” of P0.48 per share. Thus, despite the buyback, Belen “lost” P111.289 million; Edgardo, P110.329 million; and Wilfredo, P108.889 million.
Market’s billionaire. Eric Recto, a nephew of businessman Roberto Ongpin, is a multibillionaire “a few times over” with more than P5.927-billion exposure in three listed companies. He owns 11.40 million shares, or 0.80 percent, in Philweb Corp., worth P113.16 million at P9.94 per share; 433.930 million shares, or 2.65 percent, worth P885.218 million at P2.04 per share, in ISM Communications Inc.
But Recto’s biggest exposure is in Philippine Bank of Communications in which he owns more than 72.479 million shares, or 24.479 percent, worth P4.929 billion at P68 per share.
By the way, Recto’s close to P6-billion market exposure is “partial” because the amount represents only the value of his direct holdings. He may also indirectly own shares in other listed and non-listed companies.
Ongpin tapped Recto in March 2005 as president and member of the board of Philweb.
Various filings posted on the website of the Philippine Stock Exchange listed Recto’s participation in the Ongpin group, among them, chairman and director of PBCom; vice chairman and director of Petron Corp.; and director of Manila Electric Co. and San Miguel Corp.
Recto, who was undersecretary of the Department of Finance, has a degree in Industrial Engineering from the University of the Philippines, as well as an MBA from the Johnson School, Cornell University.