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SMC sells 60% of Bank of Commerce

San Miguel Corp. has finalized a deal to sell a controlling stake in medium-sized lender Bank of Commerce to Malaysian banking giant CIMB Group for more than $200 million.

An Inquirer source privy to the transaction said SMC had agreed to sell “almost 60 percent” of the banking unit to CIMB for a consideration of between $200 million and $250 million. The final agreement was targeted for signing within the next few days, the source added.

The buy-in deal with CIMB was seen to allow San Miguel to focus on new ventures such as power generation and infrastructure while still participating in the growth of the bank as a minority investor. The San Miguel group, through San Miguel Properties and San Miguel Retirement Fund, owns about 79 percent of Bank of Commerce, which means that the transaction will keep the local conglomerate as a strategic partner in the bank.

The deal was finalized after CIMB’s due-diligence audit on the bank during the past few months.

“Given the aggressiveness of SMC to reconsolidate its holdings with the takeover of Philippine Airlines, power assets and other possible acquisitions overseas, it needs such liquidity to help acquire more businesses,” said Astro del Castillo, managing director at local fund management firm First Grade Holdings. “It seems like SMC continues to roll out the barrel, disposing some assets and using cash to focus on what will be good for it in the long run.”

For Bank of Commerce, Del Castillo said CIMB’s entry could make the local bank “a player to keep an eye on.”

“It will be major player. Definitely, it will help Bank of Commerce be at par with the big banks. The financial and technical expertise of the new investor will definitely be an exciting event in the years to come,” he said.

CIMB, Malaysia’s second-biggest bank, has about $98 billion (P4.12 trillion) in assets, or bigger than the resources of the top three Philippine banks combined. It has long been seeking to gain a foothold in the Philippine banking system as part of its ambition to become a strong regional player especially as the Association of Southeast Asian Nations (Asean) veers toward economic integration by 2015.

CIMB claims to have the widest retail branch network across the region and packages itself as an “indigenous Asean investment bank.”

The Malaysian bank is likewise buying most of the Asia-Pacific units of the Royal Bank of Scotland, which has been rationalizing its operations in the region.

Based on the fourth quarter 2011 statement of financial condition, Bank of Commerce had assets of P96.03 billion, making it the 16th-largest in the country in terms of resources.

Bank of Commerce is capitalized at P19.44 billion. It has a deposit base of P71.81 billion and a loan book of P44.57 billion.

The entry of CIMB is also seen allowing Bank of Commerce to improve its profitability and asset quality ratios. The local bank has a return on equity of 4.38 percent and an above-industry non-performing loan ratio of 10.47 percent.

SMC, which gained control of Bank of Commerce in 2009, has been diversifying out of its traditional food and beverage businesses over the last few years. It has entered the power, oil, toll road, mining, airport and telecommunications businesses and, most recently, bought a substantial stake and management control of flag carrier Philippine Airlines in a $500-million buy-in deal.

source:

http://business.inquirer.net/53791/smc-sells-60-of-bank-of-commerce

PSEi up by 1% on Wall Street gains

MANILA, Philippines—The local stock market rallied sharply on Friday as investor sentiment remained buoyant despite a weaker-than-anticipated first quarter economic growth in China.

Taking cue from a strong performance in Wall Street overnight, the main-share Philippine Stock Exchange index added 50.52 points or 1 percent to close at 5,097.30.

The index has ended in positive territory for the second consecutive session as the market started to shake off a long Lenten holiday hangover. This allowed the index to gain by 58.38 points or 1.12 percent this week.

Value turnover for the day amounted to P5.7 billion. Buying was more selective than broad-based, however, as there were only 78 advancers versus 83 decliners while 47 stocks were unchanged.

The market was supported by the holding firm, property and mining/oil counters whose main indices had gone up by 1.7 percent, 1.39 percent and 1.1 percent, respectively.

An outperformer among index stocks is JG Summit, whose share price surged by another 7.2 percent to P33.5 per share. This was after CLSA Asia-Pacific initiated coverage on JGS with a “buy” recommendation and a 12-month target price of P43 per share. Food unit URC likewise benefited, rising by 3.84 percent.

Other index gainers were AGI, Metrobank, SMIC, AC, Megaworld, AP, DMCI and EDC.

Among the non-index stocks, Vista Land outperformed with an 8 percent gain in heavy volume as the stock was perceived to be undervalued relative to its potential earnings for this year and also compared to peers in the property sector, dealers said. Investors also bought up shares of NiHao, Megawide, Security Bank and Puregold.

A failed rocket launch by North Korea and the stronger-than-expected Philippine export earnings in February also likely added to the positive sentiment in the market, some analysts said.

Investors were emboldened by a second day of hefty gains in Wall Street, as the Dow Jones Industrial index surged by 181.19 points or 1.41 percent overnight. Dow Jones futures, however, were down by about 40 points after it was reported that China had grown at its slowest pace in nearly three years in the first quarter. China reported a gross domestic product growth of 8.1 percent year-on-year for the first quarter, a pace which was softer than the market consensus.

source:

http://business.inquirer.net/53349/psei-up-by-1-on-wall-street-gains

Philippine stocks fall anew

MANILA, Philippines—The local stock barometer extended losses fоr thе thіrd straight session аѕ mоrе investors lightened thеіr position аftеr US stocks mоѕtlу declined overnight.

Thе main-share Philippine Stock Exchange index lost 64.3 points, оr 1.26 percent, tо finish аt 5,037.94.

Investors аlѕо tооk thеіr cue frоm jittery trading іn Wall Street overnight аѕ global mining giant BHP Billiton reported “flattening” iron-ore demand frоm China, thе world’s top metals consumer, weighing dоwn оn US commodities аnd energy stocks.

“The market continued tо decline оn thе combined effects оf continued profit-taking аѕ wеll аѕ concerns thаt China’s economic growth hаѕ started tо slow down,” ѕаіd Manny Lisbona, deputy chief оf PNB Securities

“China ѕtіll hаѕ policy tools аt іtѕ disposal, hinting rесеntlу thаt thеу mау loosen thеіr policy rates,” Lisbona added.

Mоѕt counters ended іn thе red, еѕресіаllу thе financial, holding firm аnd services counters, whісh rеѕресtіvеlу slid bу 1 percent, 1.37 percent аnd 1.7 percent.

Onlу thе mining/oil counter bucked thе downturn.

Thеrе wеrе 73 advancers, whісh wеrе edged оut bу 102 decliners, whіlе 42 stocks wеrе unchanged. Vаluе turnover amounted tо P6.74 billion.

“Smart money іѕ accumulating іn thіѕ dip. Thе question іѕ whо аrе thеѕе smarties,” ѕаіd Gus Cosio, president оf Fіrѕt Metro Asset Management.

Investors sold dоwn index stocks PLDT, ICTSI, AP, Metrobank, AGI, ALI, RLC, SMC, SMPH, SMIC, Meralco, EDC, AC аnd URC.

Amоng thе index stocks thаt wеrе unscathed bу thе selldown wеrе Megaworld, Belle аnd DMCI. Nickel Asia аnd Puregold аlѕо advanced іn heavy trade.

Thе 5,000 level remained аn іmmеdіаtе support fоr thе local index.

Overnight, thе Dow Jones industrial average dipped bу 68.94 points, оr 0.52 percent, tо finish аt 13,170.19 due tо concerns оn slowing growth іn China.