Why Sy-led SMIC overtook MVP-led PLDT as PH's most valuable firm
MANILA, Philippines – On the last trading day of 2012, the holding firm of the country's richest man dislodged the biggest telephone company as the most valuable firm, reflecting a landmark in the Philippine economy.
Henry Sy-led SM Investments Corp. (SMIC), surpassed Manuel V. Pangilinan-led Philippines Long Distance Telephone Co. (PLDT) as the most valuable stock on December 26, 28, and stayed on top on January 2, the first trading day of 2013.
When markets closed in 2012, SMIC's market capitalization reached P549.5 billion, higher than PLDT's P546.6 billion.
When markets opened in 2013, SMIC sealed its position at the top.
SMIC has been trading in the P880 to P900 range in the past week, the highest in its stock price history, while PLDT fluctuated between P2,530 and P2,570 apiece.
SMIC rallied 51% in 2012, recording the fastest economic expansion since 2010, reflecting a boost in profits from the company’s retail, property an banking arms.
It thrives from consumer spending, a factor in the Philippine economic growth that has stayed resilient despite global economic woes, marked by recessions, skyrocketing deficits and governments' spending cuts.
SMIC's malls, banks, and property firms are designed to capture the resilient inflow of remittances from over 10 million overseas Filipino workers.
Remittances and a robust public and private investments supported the Philippine economy's phenomenal 7.1% growth in the third quarter of 2012, the highest in South East Asia.
SMIC owns the country's biggest grocery and department store operators, commercial banks BDO Unibank Inc. (BDO) and China Bank, and SM Prime Holdings Inc. (SMPH), which runs 51 shopping mall centers in the Philippines and China.
Upcoming ventures include a partnership in a casino-resort project with Melco Crown Entertainment Ltd., controlled Australia's and Macau's billionaires. The Sy family members also have minority stakes in power, mining, and energy.
PLDT, on the other hand, is in an industry that has thrived for over a decade, with call and text services that suited the Filipino's penchant for communicating with loved ones and friends in the Philippines or abroad.
The shift in consumer appetite to social media and broadband-heavy services, such as Facebook, Twitter, email, and others, led telco companies to invest massive capital to adapt to new technology and upgrade infrastructure, causing bottomlines to decline. - Rappler.com