Making Democracy Work in the Philippines	August 24, 2010
Today, Capitalism reigns supreme. Its great anti-thesis, Communism has been swept into the dustbin of history. The supreme irony in this is that Communism as an ideology appealed to the higher impulses of men. The economic underpinning of Communism is that each person must selflessly contribute to the economy all his talents while responsibly getting from the economy only what he needs. Or as stated in their slogan: “From each according to his abilities and to each according to his needs.”
The Return of Family Corporations	July 29, 2010
The Western spectacle of professional manager firm working for their own interest rather than that of their stockholders has resulted in the return to prominence of family corporations. In the West, family firms have historically been considered as merely the intermediate stage in corporate development. They were expected to either die out or be absorbed by the public corporation. The public corporation would be the final stage of corporate development, publicly owned, professionally managed and multinational in character.
The Ogre That Never Dies	June 23, 2010
As the new administration comes into power, we decided to shift from the capital market to the political market. And here, we would like to recount the story of the Ogre that never dies. I first saw this story in a cartoon on Indonesian television back when Suharto ruled Indonesia. In that story there was a young boy who lived in a kingdom that was continuously ravaged by an ogre who lived in a castle upon a mountain top.
The Euro Crisis and the Philippine Stock Market	May 25, 2010
The Greek crisis is turning out to be a Euro Crisis with its impact on Europe beginning to reach the same magnitude as that of the subprime crisis in the United States. It is therefore instructive to review the impact of the subprime crisis on the Philippine Stock Market and then draw some inferences on the possible impact of the Euro Crisis on the Philippine Stock Market. When the subprime crisis hit the United States, there were three groups in the Philippines that were immediately affected:
Awaiting the Election Results	April 26, 2010
Since January of this year, most businesses have postponed any expansion, major or new business activities until after the May 10 election. The same thing is happening at the Philippine stock exchange.
Return of the Bull	March 26, 2010
The conventional wisdom among stockbrokers is that the Philippine stock market moves in seven year cycles of feasting and famine, much like in the Bible.
Philippine Savings Rate	February 2010
Last 29 January 2010, we gave a briefing at the General Membership meeting of the Philippine Contractors Association. Part of our briefing was to stress that since 1999, the savings rate of the Philippine economy was higher than the investment rate. We were quite surprised that this strategic structural change was not widely known to our Philippine contractors.
Prospects for 2010	January 18, 2010
At the start of 2009, forecasts for the Philippine economy were bleak. The Philippines was expected to go into recession as a consequence of the global recession. In fact, the Philippines dodged the bullet. GNP growth for the first three quarters of 2009 was at a positive 3.3% with the third quarter growth of 3.5%. Definitely much better than the negative figures forecasted at the start of 2009.
Regina Capital at 20	December 16, 2009
On November 27, 1989, Gringo Honasan launched his second and most devastating coup attempt at the Cory Administration. By the time the coup was suppressed on December 7, 2009 blood had flowed in the streets and the offices in the central business district of Makati had been closed for more than a week A victim of this military revolt was Regina Capital. Its new offices at the NIDC Building along Buendia were closed during the siege of Makati. By the time the Regina staff were able to return on Monday, December 11, 1989, the plants in the office had died, an inauspicious beginning. Moreover, the Philippine stock market was comatose.
The ABCs of the Meralco Deal	November 10, 2009
The final round of the battle for control of Meralco between the First Pacific Group and the San Miguel Group officially started on October 29, 2009 when Metro Pacific Investments Corp., a unit of Hong Kong-based First Pacific Co. Ltd., announced that it expected to conclude shortly negotiations to acquire the 6.7-percent stake of First Philippine Holdings Corp. in Manila Electric Company (Meralco).
The Philippine Debt Market	October 20, 2009
The Philippine Equity Market has been doing very well as the PSE index has already gained 23% since the start of the year. What many stock market watchers may have missed is the equally bullish happenings in the Philippine Debt Market. Moreover, such happening explains why there has been a dearth of large IPOs in the equity market lately.
SEC humiliated!	September 22, 2009
We are of course referring to the Securities and Exchange Commission of the United States of America.
San Miguel Corporation: Preferred Stock Offering	August 17, 2009
On 21 May 2009, San Miguel Corporation, formally informed the Philippine Stock Exchange of the decision of its Board of Directors to present to its present common shareholders an offer to exchange their common shares to a new kind of shares to be denominated as Series 1 Preferred Shares. Subsequently approved by the common stockholders during the Annual Stockholders’ Meeting held on July 23, 2009, the plan would have San Miguel exchanging as much as 1.1 billion of its common shares for an equivalent 1.1 billion preferred shares. This would account for about 35 percent of its outstanding common shares of 3,157,208,927.
Megaworld Corporation: Stock Rights Offering	July 15, 2009
On 30 April 2009, Megaworld Corporation issued a “Prospectus Relating to the Stock Rights Offering of 5,127,556,725 Common Shares With a Par Value of P 1.00 per Share With Four (4) Bonus Detachable Warrants for every five (5) Rights Shares subscribed to be offered at the Exercise Price of P 1.00 per Rights Share to be listed and traded on the Philippine Stock Exchange”. Quite a mouthful! In essence, Megaworld is asking its existing stockholders to subscribe to additional Megaworld shares at P 1.00 per share. As Megaworld shares were trading on 31 March 2009 at P 0.56 per share, why, if we wanted more shares of Megaworld for our portfolio would we buy the new shares at P 1.00 per share when we could buy them in the Philippine Stock Exchange for P 0.56 per share? Before we answer that, we must first ask why Megaworld is undertaking a public offering of its shares at P 1.00 per share when the book value per share of Megaworld shares were P 1.96 per share as of December 31, 2008?
The Lopez Group: Benpres Holdings Corporation	June 15, 2009
Benpres Holdings Corporation (Benpres) was incorporated in 1993 by the Lopez family to serve as the holding company for investments in broadcasting and entertainment, cable television, telecommunications, power generation and distribution, infrastructure, real estate development, and health care delivery. Benpres was listed at the Philippine Stock Exchange on November 25, 1993 through an IPO (Initial Public Offering) of P 3.0 billion. The offering was oversubscribed and its initial offering price rose four times. This was primarily due to Bayan Telecommunications Holdings Corporation (BayanTel). A joint venture with Bell Atlantic of the USA, BayanTel was intended to engage in fixed-line, international and domestic long distance services among others.
The Lopez Group: First Philippine Holdings Corp.	May 22, 2009
First Philippine Holdings Corporation (FPH) is a holding company established on June 30, 1961 by the Lopez family to group together its investments in the energy sector in the Philippines. FPH's principal activity is holdings in subsidiaries and associates. In 2006, these were engaged in power generation (First Gen and EDC) and power distribution (Meralco), roads and tollways operations (North Luzon Expressway), pipeline services (First Philippine Industrial Corporation), real estate development (Rockwell Land Corporation), manufacturing (First Philec Corporation), and construction (First Balfour, Inc.).
The Lopez Group: Lopez, Inc.	April13,2009
The Lopez Business Group has been in the news lately. We have decided to do a three part series. The first deals with the business history of the Lopez family. The second will deal with First Philippine Holdings, Inc. and the third will deal with Benpres Corporation. The Lopez family business interests in telecommunications, broadcasting, power generation and distribution, land development, infrastructure and other sectors are held through a series of holding companies. Lopez, Inc. is privately held by the Lopez family and serves as the principal holding and management company for Benpres and First Philippine Holdings.
The Dubai Debacle	March 16,2009
Last February 22, 2009, Dubai one of the seven emirates of the United Arab Emirates (UAE) suffered the ignominy of being rescued by the UAE central bank and its sister and rival emirate, Abu Dhabi. The UAE central bank bought $10 billion or half of the $ 20 billion 5-year bond issued by the Dubai Emirate. This was just four months after the Emirate staged an extravagant $20 million party complete with a massive fireworks display and a star-studded guest list to launch the opening of luxury resort Atlantis.
The China Factor	February 18, 2009
Last Friday, at the invitation of Mike R. Locsin, Vice President of Credit Suisse Private Bank, we attended a briefing on the global economy by Dr. Giles B. Keating, Head of Research for Private Banking and Asset Management of Credit Suisse. Dr. Keating presented three basic conclusions. First is that the on going recession will be long and deep. Recovery is most likely by 2010. However, he notes that while the decline continues, the rate of decline has decreased.
Who has been swimming naked?	January 15, 2009
Warren Buffet, called the Oracle of Omaha and considered the most successful investor in the world is supposed to have remarked that, “ When the tide goes down, we find out who have been swimming naked”. Well, the financial tides have really gone down all over the world and a lot of people have been caught swimming naked.
Investing in Holding Companies	December 12, 2008
The Philippine Stock Exchange has classified 41 listed companies as holding firms. Economists note that groups of companies or conglomerates persists in Asia even while losing favor in Europe and the United States. They explain that this could be due to the fact that in Asia where management talent and venture capital are scarce, these crucial functions are undertaken by these business groups called Keiretsus in Japan, Chaebols in Korea and Conglomerasis in Indonesia.
The Return of Liberalism	November 10, 2008
The presidential inauguration of Barack Obama as the 44th President of the United States of America on January 20, 2009 will mark the formal return of Liberalism as the dominant political and economic philosophy of our times. Thus sayeth, Paul Krugman in his November 7th, 2008 column of the New York Times.
AIG: How the Mighty Have Fallen!	October 13, 2008
American International Group (AIG) is the largest insurance company in the world. Founded in 1919 in Shanghai, China by C. V. Starr, an enterprising American who reportedly had strong connections with T. V. Soong, Finance Minister of President Chiang Kai Shek and brother of Madam Chang Kai Shek (nee Meiling Soong), the company expanded throughout Asia.
The US Subprime Crisis and the Philippine Capital	September 10, 2008
With the US government bailing our Fannie Mae and Freddie Mac, we have to reluctantly conclude that the US Subprime Crisis is not yet over. But for us, the more relevant question is what impact if any, the crisis had or can be expected to have on the Philippine Capital Market.
The Bottom: Are we there yet?	July 28,2008
With the US subprime crisis seeming to subside, a lot of our Regina Clients are asking if the bottom of the Philippine stock market has already been reached. Fortunately, a columnist of the July 17, 2008, The Economist called Buttonwood discussed the same question under the heading “Turning Panic into Opportunity”. While the columnist was discussing the British Stock market, he provided specific measures which could be applied to our own market.
The First Venture Capitalist	July 7,2008
My previous column, Drop Dead Money discussed the concept and the mechanics of computing the amount of drop dead money one needed. In that exercise, I estimated the drop dead money needed at P 30 million.
Drop Dead Money	June 3, 2008
My previous columns have dealt with managing the wealth of the wealthy. In sum, their investment objective would be to preserve their capital above all else. But what about those who are not wealthy and have no aspirations for great wealth? What should their investment objective be? We suggest that their investment objective be to have their “drop dead money”.
Wealth Management : The Agency Problem	May 6, 2008
When I was a young man contemplating on a possible career, I was advised by an uncle to take up law. When I asked why, he said that there should be a lawyer in every family. When I further asked why, he mentioned that this was the only way that a family could be sure that an outsider lawyer would not trick the family into signing away their precious properties. He then proceeded to tell horror stories of families losing their fortune through the legal trickery of their lawyers.
Managing the Wealth of the Wealthy	April 8,2008
Recently, I met with one of my former students. When I asked what he was doing, he answered, “ Private Banker”. When I asked what a private banker did, he replied, " Managing the wealth of the wealthy"
The Peso and the Efficient Market Hypothesis	March 6,2008
A more popular issue than the movement of the Philippine stock market is the movement of the Philippine peso. Several economists have already discussed extensively on the future peso to dollar exchange rate. For them, the only issue is how strongly the peso will appreciate. For us the more important issue is whether the peso is presently under-valued or over-valued vis-à-vis the US dollar.
The Phisix and the Efficient Market Hypothesis	February 11, 2008
How does one make money in the Philippine stock market? This is the question most frequently asked when people find out that we are a stockbroker. The short answer is “With great difficulty.” The long answer is the subject of this column.
The World Turned Upside Down	January 3, 2008
In September of 2002, Mr. Lucio Tan in a speech before journalists and business executives predicted that the Philippines would not see progress in the next 100 years. Moreover, he boldly predicted that the peso then at P 53.10 to $ 1 would drop to P 120 to $ 1 in the next four to six years.