Utilities Should be Publicly-Listed

[jpdm]

The raging issue regarding the oil prices in the Philippines as well as other important utilities such as water and electricity prompted one government official to suggest that the government should compel utilities to list in the stock exchange so that the public may scrutinize and monitor their financial statements. This will determine if they are pofiteering or not.

Meralco and Aboitiz are among the utilities companies that are publicly listed.

In the oil industry for instance, the oil deregulation law stipulates that oil firms should immediately list their stocks in the PSE by having their IPO.

Only Petron and perhaps another small oil firm complied with the rule.

Shell, Caltex, Eastern Petroleum, Seaoil have remained unlisted.

Their products are so socially sensitive that their movements are closely monitored by the state and the public.

What do you think?

[coiter]

i think nasa oil deregulation law na oil companies must be publicly listed after a certain period. the issue has been raised this year because of the spiraling cost of crude. pero wala rin.

[jpdm]

i think nasa oil deregulation law na oil companies must be publicly listed after a certain period. the issue has been raised this year because of the spiraling cost of crude. pero wala rin.

Indeed sir, notably Shell and Caltex. But Im not sure whats keeping our regulators from ordering these companies to follow the rules...

perhaps, the government does not want to antagonize Shell because of its pending plan to expand its refinery here in the Philippines?

For me Shell and Caltex should go public so that once and for all their books will be open to the public so that any speculation about their earnings will be diminished somehow....

[True Faith]

Indeed sir, notably Shell and Caltex. But Im not sure whats keeping our regulators from ordering these companies to follow the rules...

perhaps, the government does not want to antagonize Shell because of its pending plan to expand its refinery here in the Philippines?

For me Shell and Caltex should go public so that once and for all their books will be open to the public so that any speculation about their earnings will be diminished somehow....

Agree, sir!

[creepy]

The Oil Deregulation Law mandates companies that operate oil refineries to be publicly listed. Caltex (Chevron) doesn't operate a refinery anymore so it's not required to list.

Pilipinas Shell, on the other hand, has been pretending that it's going to list for a loooooong time. The DOE should impose a fine for every single day it does not list.

[Gen. Miting]

if the law requires them to publicly list their companies, and they're hanging on empty promises. then that's greed na talaga. no doubt.

[CVT]

If they already passed the prescribed date to be publicly-listed,- then they should be penalized ... The spirit of the oil deregulation law is to benefit the general public. Sadly, this is not happening.

6909:seehearspeak:

[jpdm]

I hope ULS, Gen Miting and Tidus will read this....

Will it make oil companies stronger if they will sell a portion of the company to the public via an IPO?

[niky]

Technically, yes... it'd make raising capital much easier. But of course, public listing is to the disadvantage of those who own the corporations, as it makes them vulnerable to takeovers (remembering what happened to one school... they implemented a stock-sharing scheme one day... then woke up the next to find out they were bought out by one of the local tai-pans... )

Of course, if you have a strong company that gives you regular dividends, you're not really going to want to share that with anyone else.

Again... regarding oil companies... not really a problem with the law, per se... just the implementation.

As for whether all public utilities shoudl be publically listed... I don't know. Why doesn't the government just buy shares in all of the utilities and share the information with the public?

Reminds me of the time when the government accused us schools of profiteering and tried to force a tuition fee cap. Durh... you open a business and you can't make profit from it? And now, when they removed support from some of the state-run higher education institutions... it turns out that to survive, they have to charge the same price as some private schools (and more than others)... whoops.

But it should put to a rest all the political grandstanding and bickering between the government and the corporations.

The problem with other utilities is that there's no choice in the matter. Unlike the current fuel market, where competition forces pricing strategy into the fore, when you live in Manila, you don't really have a choice of utilities... except maybe in terms of telephone service.

In this case, it may be a good idea... but enforcing transparency laws for public utilities would be much simpler than forcing them to issue stocks.

[tidus1203]

My personal take is if you don't need the money why go public? Going public only means now there are people who can interfere in how you wanna run the company. But going public is one effective way to raise money which goes back to my first question if you don't need it why bother? Listing also costs money.

[uls]

Ya, if u don't really need more capital, why go public?

besides, there are other ways to raise capital.

if i have a profitable privately held business, and i don't need additional capital, why would i wanna invite other people to make pakialam my business?

tapos magbabayad pa ako ng dividends...

hehe

[True Faith]

Some economists say that it is good for the economy for corporations to list themselves in the stock market to increase their capital and give the stock market a boost...

It will also give pinoys more choice as to where they can invest their money...

The problem with the country as to why some excess funds of pinoy went to this pyramiding scams in the early 2000 is because there are few options for investments in the philippines....

But if more companies especially the stable utilities offer their shares to the public people might be attracted to invest in the PSE...

[uls]

Even in early 2000, our stock market can easily absorb the money people put in pyramiding scams.

Those people know the stock market exists but they still chose to go into pyramiding scams.

[jpdm]

Even in early 2000, our stock market can easily absorb the money people put in pyramiding scams.

Those people know the stock market exists but they still chose to go into pyramiding scams.

Yup, agree. i really dont know why our PSE is not attractive to local investors...

[niky]

Because people are lazy.

The rule is simple... if it's too good to be true... it's obviously not.

People are easily suckered by promises of high return for little investment.

"Little" meaning they don't have to research, think, or strategize... hey... just give your money to us, and we'll take care of the rest.

Stocks are a little intimidating to those who don't know much about them... and it's a long-term investment... where you get smaller percentages every year, instead of large returns right away. And "playing" the stock market... buying and selling shares for profit, requires an in-depth knowledge of the business and business environment... it's like betting on basketball games... such detailed knowledge like the fact that a certain team's star player really won't be playing at 100% if he ate steak for lunch can make or break your winning streak.

This is not a slight on those who have been suckered (I know a lot who have been, and a lot pester me to join...), but seriously, use your common sense when investing. (though the current volatility of the markets show that even some of those "smart" enough to play the markets are given to a lack of common sense, too).

[4wrider]

The are basically two approaches to stock markets. One is technical and the other is fundamental. The first is just really for trading and the other is for investment. In technical all you need to know is the stocks market movement and the rule is simple buy low sell high. In the use of fundamental analysis, you need to get the financial reports, study the industry and company, use forecasting tools etc.

The technical approach is mostly like gambling and the fundamental approach is the real investment. The first gives you quicker results and is most exciting the second is a much more deliberate and sober.

To veer back to the topic, unlisted companies' annual reports should be available at the SEC. However, with the creativity of accountants (which is partly to be blamed for the current financial crisis) it is doubtful if you can extract anything which you can successfuly used against the oil firms.

[jpdm]

To veer back to the topic, unlisted companies' annual reports should be available at the SEC. However, with the creativity of accountants (which is partly to be blamed for the current financial crisis) it is doubtful if you can extract anything which you can successfuly used against the oil firms.

Yup, this a problem indeed.

[tidus1203]

Yup, agree. i really dont know why our PSE is not attractive to local investors...

The PSE has been plagued by a massive scam that it has yet to recover even to this very day (in Tsikot terms kinda like the Mitsubishi Pajero suspension scandal) which is the BW Resources scam. Remember that stocks flew from less than P1/share to almost P200/share. Obviosuly the thing was manipulated by the insiders and toyed with the public and spread rumors to fuel the fire. Remember one of the biggest rumors then was Stanley Ho (the gambling baron of Asia) was going to invest with BW and that made the stock soar only for the insiders who spread the rumor sell little by little. After all was said and donw and after BW Resources tumble like there is no floor back to below P1 many people lost so much money and no one trusted the PSE anymore. Until now its still suffering from the image of elitism and insider trading activities since its controlled by a few members of the "Old Boy's Club".

[Monseratto]

The PSE has been plagued by a massive scam that it has yet to recover even to this very day (in Tsikot terms kinda like the Mitsubishi Pajero suspension scandal) which is the BW Resources scam. Remember that stocks flew from less than P1/share to almost P200/share. Obviosuly the thing was manipulated by the insiders and toyed with the public and spread rumors to fuel the fire. Remember one of the biggest rumors then was Stanley Ho (the gambling baron of Asia) was going to invest with BW and that made the stock soar only for the insiders who spread the rumor sell little by little. After all was said and donw and after BW Resources tumble like there is no floor back to below P1 many people lost so much money and no one trusted the PSE anymore. Until now its still suffering from the image of elitism and insider trading activities since its controlled by a few members of the "Old Boy's Club".

With the blessing of ex-convict populist actor. And I cringe at the thought who he is allied with today...

Estrada profited from BW Resources' shares: Espiritu

MANILA, Jan. 11 Kyodo

Former Finance Secretary Edgardo Espiritu told an impeachment court Thursday that Philippine President Joseph Estrada owned shares in BW Resources Corp. and made a huge profit from selling them when the share price skyrocketed.

Espiritu testified that Estrada crony Dante Tan admitted to him that the president owned shares in BW Resources Corp., a gambling company at the center of the Philippines' worst stock-manipulation scandal.

Tan, BW Resources' major shareholder, was implicated in the price-fixing scandal involving the firm. Espiritu said Estrada is also Tan's ''partner.''

Espiritu was a staunch supporter of Estrada during the presidential campaign and was eventually appointed finance secretary. He resigned on Jan. 5 last year.

He stated that Estrada ''got excited'' when the price of BW Resources' shares rose, adding the president had told him he had made a lot of money from BW Resources.

''Ed, I am already raking in a huge profit from BW (shares),'' Espiritu quoted Estrada as telling him.

Espiritu took the witness stand to testify how BW Resources Corp. came into being, saying he tried to patch up the differences between Tan and another Estrada friend, Mark Jimenez, as to who would control the company.

Control over BW Resources' shares was eventually given to Tan who bought back the shares for 150 million pesos ($3 million) from Jimenez, Espiritu said.

He told the court the BW Resources controversy was one of the reasons he decided to resign from Estrada's cabinet.

He said he warned Estrada that ''the presidential friends'' would cause havoc to his administration and asked him to issue a statement concerning the BW price-fixing scandal.

Estrada, however, did not heed his suggestion, he said.

Prosecutors claim Estrada called Espiritu last December and tried to stop him from testifying in the impeachment court.

The country's worst-ever stock market scandal, which rocked the local stock exchange in 1999, caused BW Resource's share price to soar 50-fold before collapsing, wiping out the savings of hundreds of small investors.

Espiritu is the third prosecution witness to be called to testify that Estrada betrayed public trust and violated his own oath of office when he unduly intervened in the Securities and Exchange Commission on behalf of his crony Tan.

Earlier Jose Luis Yulo, former president of the Philippine Stock Exchange (PSE), and another officer, Ruben Almadro, also testified that Estrada exerted pressure on them to exonerate Tan.

Perfecto Yasay, former Securities and Exchange Commission chairman, will also be called to testify in the impeachment trial that began Dec. 7.

Last January Yasay told a Senate committee that Estrada had pressured him to exonerate Tan from the BW Resources probe.

He also accused Estrada of making a profit of 800 million pesos from the sale of shares in BW Resources Corp.

The feud between Estrada and Yasay came in the wake of Yasay's order to investigate the wild swings in the price of the company's stock in 1999.

Aside from betrayal of public trust, Estrada has also been impeached on charges of bribery, graft and corruption, and culpable violation of the Constitution.

The House of Representatives impeached him in November last year, making him the first Philippine leader to be impeached.

The impeachment was spawned by an accusation by Estrada's estranged drinking and gambling buddy Ilocos Gov. Luis Singson that he pocketed millions of pesos in kickbacks from illegal gambling and provincial tobacco excise tax.

Singson's claims rocked the country's financial markets, driving stocks and currency markets to new lows. It also plunged the country into a fresh political crisis.

COPYRIGHT 2001 Kyodo News International, Inc.

[Gen. Miting]

Yup, agree. i really dont know why our PSE is not attractive to local investors...

bec. we have nothing big enough to invest really