Meralco Climbs for 9th Day, Longest Streak Since 1992

By Ian C. Sayson

Feb. 12 (Bloomberg) -- Manila Electric Co. shares rose for a ninth day in their longest winning streak in 17 years after First Philippine Holdings Corp. said it’s keeping its “options open” on raising its stake in the largest Philippine power retailer.

Meralco, as the company is also called, added 6.4 percent to 83 pesos as of 10:53 a.m. in Manila, set for its highest close since Feb. 4, 2008. It was the No. 3 gainer in the main Philippine Stock Exchange Index, which advanced 1.2 percent. First Holdings was the biggest gainer in the measure.

Meralco has surged 35 percent in nine days, its longest winning streak since January 1992, on speculation First Holdings and San Miguel Corp. are raising their stakes to gain control of the utility. First Holdings controls 33.4 percent of Meralco while San Miguel is estimated to own 34 percent.

“The stock is in play,” said Jonathan Ravelas, strategist at Manila-based Banco de Oro Unibank Inc., which has more than $6 billion in trust assets. “The market is in deep speculation that either First Holdings or San Miguel is solidifying its stake.”

First Holdings hasn’t decided against increasing its stake in the power distributor and will keep its “options open” on such a possibility, even though it’s not a priority, President Elpidio Ibanez said yesterday in an interview with Bloomberg. Separately, San Miguel President Ramon Ang said in a text message that buying Meralco shares isn’t a “priority” after he was asked if the company is interested in raising its stake.

First Holdings, which also owns the nation’s biggest non- state power producer, rose 12 percent to 24 pesos, set for its highest close since Feb. 24.

“You have to be Jack-be-nimble if you chase these stocks, given the volatility,” Ravelas said. “It’s not certain that these movements are fundamentally driven.”

San Miguel Class A shares, equity reserved for Filipinos in the nation’s biggest food and drinks company, climbed 2.4 percent to 42.50 pesos, set for their highest close since Nov. 19. Its Class B shares, which have no ownership restrictions, were unchanged at 43 pesos.

To contact the reporter on this story: Ian C. Sayson in Manila at isayson@bloomberg.net