May 20, 2011

The San Miguel Promise

Last month, I attended the corporate roadshow of San Miguel Corporation. The companies they invested are leaders in their industries. I was impressed not just with the amount of dough they invested to acquire these companies but also on how they strategically position themselves in major Philippines industries. From a simple beverage making company, they became a conglomerate with multiple interests in different key economic areas. One speaker said that investing in San Miguel is like investing in the country's future. I believed them especially on the long term.

However, I was dismayed when they suspended their share in PSE for 14 days. Their excuse: to prevent speculation. I respect their views but I think this is part of what's driving the market. We always have speculators. Pity those who invested in SMC when it was 150+ cause they have to wait for 14 days. Such a waste of opportunity.

PSE should not just suspend shares because of some silly excuses, this would hurt small traders and investors. Although their transactions are minute compare to large institutions, it discourages them from believing in the market. Our government is already perceived corrupt and easily manipulated by shady people, I don't want this highly respected institution to be in the same league as well.

Still, I believe SMC will bounce in 1 to 2 years. I believe in the industries they go into and I believe it will generally benefit the country economically.

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