MANILA, Philippines - Manila Electric Co. (Meralco) stocks have been on the rise for the past eight trading sessions on rumors its two major shareholder groups continue to fight for control of the country’s largest power distributor.
Meralco is the fifth-biggest gainer in the main Philippine Stock Exchange index yesterday, closing four percent higher to P78 from only P75 Tuesday. A total of 10.77 million Meralcshares changed hands yesterday valued at P855.98 million.
From only P59.50 in Jan. 30, shares of Meralco, which a market capitalization of P83.6 billion, has been steadily going up, hitting a high of P80 yesterday or close to its 52-week high of P82.50.
In some stock market circles, this was taken to indicate that the demand for the shares was originating in powerful quarters and that there was more behind the movement rather than the general appreciation of prices for the shares.
Late last month, fond and beverage giant San Miguel Cprp. secured four seats on the 11-member Meralco board and installed its president Ramon Ang, chairman Eduardo Cojuangco, director Estelito Mendoza and financial consultant Aurora Calderon as directors.
San Miguel acquired a 27-percent voting block in Meralco via a staggered payment scheme with state Pension fund GSIS in October 2008.
Last month, Global 5000, a local fund believed to be affiliated with San Miguel, acquired a seven percent interest in Meralco another from state pension fund Social Security System, and state-owned Development Bank of the Philippines.
Combined, the San Miguel/Global 5000 group has a combined 34 percent stake or at par with the Lopez family’s 34 percent.
At the same time the rumor was being circulated, there were those who gave the impression that San Miguel’s entry into Meralco could have stimulated interest in the stock.
In addition, attention was drawn to the fact that the Meralco shares were undervalued, analysts said.
Interest in the rumor was keen for the reason that the Lopez family has run Meralco for years.