San Miguel Brewery Report: My first stock trading investment

A few months after my initial investment with this company. San Miguel Corporation recently released their 1st Quarter sales report (see below). I am much surprised and pleased to see that from PhP 8.00 per share of stocks that I bought Last May 2008 have dramatically jumped to PhP 9.30 per share so my 1000 shares from San Miguel Brewery went up with estimated net value PhP 9,100.00 to PhP 9,300.00, thanks to their boosts of revenues from beer and food operations. Prior to hitting the PhP 9.00, before it was still at PhP 8.40 - PhP 8.50 per share on the end of July. The April to early July were stock trading was limited due to fears of high oil prices and fears of the investors in loosing more their money but somehow San Miguel Brewery pulled on its initial public offering (IPO) on its debut at PhP 8.50 per share but fell sharply on the following weeks to PhP 8.10 - PhP 8.30 per share. (see Charts for San Miguel Brewery)

Somehow, the world stock market rallied when prices of oil have dropped dramatically to US$ 113 per barrel with confidence from worldwide investor of this positive news which gave a stimulus in market movements in the past weeks.

The article below was taken in the San Miguel Corporations' website.

San Miguel Brewery Revenues for First Semester up 9%

7/24/2008

San Miguel Brewery Inc. (SMB), the brewery operations of San Miguel Corporation, today reported first semester 2008 net sales of P23.8 billion, 9% higher than last year’s P21.9 billion, directly attributable to a 7% increase in sales volumes.

Operating income grew 25% to P7.2 billion from P5.7 billion in the prior year period.

“Despite a more challenging economic environment and added pressure on the consumer’s disposable income, we’ve turned in very strong results. We continue to invest in brand building and are focusing on improving sales momentum and efficient execution across all distribution levels,” said Ramon S. Ang, president of SMB Inc. The Company’s marketing resources were focused on outlet-based promotions and on reinforcing flagship brand, San Miguel Pale Pilsen. Trade management efforts, including rationalization and training, are being implemented to streamline and maximize product distribution. SMB Inc. is also undertaking new programs to offer wider availability and ensure consumer satisfaction. To conserve financial resources, programs to reduce inventory and trade receivable levels were also implemented alongside other cost saving programs.

Related News from Philippines Star - August 13, 2008 - SMC triples H1 income to P19.7 B.


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My Sights on JG Summit Holdings

I have my sights on this great company which Mr. John Gokongwei founded back in the early 1990s. Was reading a back issue of BizNewAsia Magazine published last May this year which regards as "Gokongwei Gambit". John Gokongwei's intent on acquiring the 40% shares of Petron made me interested in the oil and mining sector of the stock market. Oil is still profitable even if it has weakened for the past few days in the world market.

Saudi Aramco, a conglomerate of Saudi Royals and American companies decided to pull out the plug and sell the 40% share to interested entities through bidding of Petron. JG Summit is interested in this with their experience in the petrochemical production and business through JG Petrochemicals, Inc., A JG Summit Holdings subsidiary while London-based Ashmore Group has acquired 50% shares when Saudi Aramco finally sold it shares of Petron to this group. However, this government owned company with more than 40% control of the company also would like to sell it shares with the remaining 10% bloc to the other local small investor or other companies with interest in Petron to Ashmore or any other local investors. It was reported that some of the remaining shareholders have sold their shares to Ashmore at P 6.53 per share which is lower than expected in a already loosing companies which has a deficit of billions of pesos. See Ashmore's company profile (Ashmore).

At this moment, Petron is still under negotiations with JG Summit Holdings and will get most of those local small investors of JG Summit Holdings excited about if the acquisitions push through with the plans. You can view the articles on the business section of the Philippine Star (July 23, 2008).

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Philippine Stock Exchange: Less than half of 1% Pinoys invest in the stock market

When I was downloading the Red Herring from Sultan Mining IPO a month ago and came across this article from the Philippine Stock Exchange website.

Going back in early 2000, I was a 19 year old college student. I became fascinated with stock market. I played and joined with www.virtualstockexchange.com wherein high school students in the U.S. do mock trading with nothing. The concept of the website was to teach the young students on the concept of the stock market, investments and business and at the same time prepare to be in the corporate world as passive investors which would be beneficial for them in their future endeavours.

I have also read this article on Phillippine Star the other day and seen some it online through ABS-CBN News Online regarding this (See Article).

See PSE Article released on June 16, 2008.

One of the author of well-known Philippine finance blog also made comments on the PSE article. He recommends that there should education through roadshows and also setting up a basic talks in schools and fairs and I agree to that in teaching the young. In the US, some high school student already have the knowledge in trading stocks through mentoring from their teachers, corporate sponsors and other people involved in stock market.

Therefore, we need to educate the Pinoys with this. I guess, in order to let the people know the stock market is by launching a financial education among the youth. The young people are the best targets for this. Teaching them young would encourage to be more responsible and financially educated.


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The San Miguel Brewery IPO Report: My first stock investment

I recently went to San Miguel Brewery, Inc. offices last May 5, 2008. I chanced upon the advertisement on SMB IPO last April 24, 2008 at the Philippine Star. I opened on the possibility investing in paper assets while dreaming of buying some real estate in the future. It was an event I was waiting for in buying some 1000 shares of a long-time profitable food and beverage company with a proven track record that has been in the country for more than a hundred years of existence. Testing the waters, I opened an account with this company and at the same looking in trading stocks so I invested PhP 8,000.00 worth of shares (1000 shares = PhP 1.00) on this as a Local Small Investor (LSI).

I can see how profitable San Miguel beer to the local masses with production of millions in the open market and even internationally recognized as a strong seller with other well known brand names from Europe like Heineken, Carlsberg, Mexico's Corona, America's Miller and others.

I was amazed on how it jump on its initial offer of PhP 8.00 per share to PhP 8.50 will additional pesos on my paper assets of owning an a 1000 shares of San Miguel Brewery on its debut yesterday morning (May 12, 2008) at the Philippine Stock Exchange trading day. The increase was 6.25% as what was reported in the news last night beyond what I have expected from earlier reports in a famous broadsheet on the forecast that it will lose its value regarding previous IPOs. It gave me a jitter as my kept my fingers crossed from days of waiting since signing up last 5th May 2008. It did not lose ground on its first day but somehow found out on visiting the PSE's ticker tape that San Miguel Brewery with San Miguel Corporation A and B incurred some losses. I lost 10 centavos on the value of what I gain yesterday but it is a close call than losing more a PhP 1.00 value of my shares with this company.

I am glad that I was able to test the water of stock trading and will be able to understand and be vigilant in investing in hard-earned cash. Will be watching closely on SMB performance in few days or so.

About San Miguel click this link.

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