DO insiders know better than ordinary investors? Not necessarily if you were to look at how an insider at First Philippine Holdings Corp. (FPH) traded his holdings.
On November 15, Arthur de Guia, managing director for manufacturing-investment group of FPH, bought in two transactions 36,650 FPH shares—30,000 shares at P64 each and 6,650 shares at P63 each. The acquisitions increased the number of FPH shares he directly owns to 843,040.
FPH closed on Monday at a 30-day low of P60.90, causing de Guia a paper loss of P106,965 from the two trades, or P2.92 each share. At the stock’s high of P74.85 on October 3, his FPH shares before the two acquisitions were worth P60.36 million. As of Monday, he was “poorer” by P9.02 million (P60.36 million minus P51.34 million).
Apparently, de Guia did not know better than anyone among the public. Perhaps, his “paper loss” could be temporary.
Yet, if you were to look at a top executive of Union Bank of the Philippines (UBP), you would conclude that he could be worth emulating. As the saying goes, follow the leader who ended up “richer by P1.54 million.”
As of November 30, Roberto Abastillas, a UBP senior vice president, owned 247,192 UBP shares worth P31.121 million at Monday’s close of P125.90, after selling in three trades 13,980 shares from which he grossed P1.76 million, which translates to an average selling price of P126.02, off P0.377 the session’s high of P126.40, which was also the stock’s highest in a month.
Apparently, Abastillas had good timing.
Before the sale, he owned 261,172 UBP shares worth P33.012 million, up from P31.471 million at a low of P120.50 on October 10, making him “richer” by P1.54 million.
If Abastillas has not sold yet, then he must be waiting for something that the ordinary may not be aware of. But he should be given the benefit of the doubt. As an insider, he has been disclosing his trades in compliance with the market’s rule on full disclosure.
The trading strategy of the Social Security System (SSS) tells the public a different story. It owns 122.576 million worth P15.49 billion at P126.40 each share, and P14.77 billion at P120.50 each share. At these comparative prices, it is ahead in paper by P721 million.
Of course, SSS could not and should not do any unloading, since its shares elected Emilio de Quiroz Jr. and Eliza Bettina Antonino to UBP’s 15-man board. As its nominees, the two could be receiving additional compensation on top of what they are paid by SSS.
Since the compensation report prepared by the Commission on Audit remained silent on the other pays perks of de Quiroz and Antonino, it could be presumed that they have been remitting their fees as directors of listed companies to the national treasury—or to SSS itself.
As UBP directors, de Quiroz, who is SSS president and chief executive officer, and Antonino, a member of the Social Security Commission, receive P60,000 fee per meeting attended, according to a UBP filing posted on the website of the Philippine Stock Exchange.
As SSS head, de Quiroz got P4.348 million and Antonino P1.244 million in 2012. Both also represent SSS in listed companies in which SSS is a significant stockholder—de Quiroz in Belle and Antonino in Philex Mining Corp.
Luckily for Antonino, along with SSS other nominees Juan Santos and Bienvenido Laguesma, Philex is more generous than Belle. In 2012, it paid its 11-man board P121.256 million, or P11.023 million each. On the other hand, de Quiroz and his fellow Belle directors did not get as much as they shared from P14.735-million compensation for “all other officers and directors as a group unnamed.”
SSS owns 1.01 billion Philex shares, or 20.58 percent, worth P8.323 billion at Monday’s close of P8.20, and 370.469 million Belle shares, or 3.51 percent, worth P2.01 billion at P5.43 each.