{"id":148599,"date":"2018-01-24T03:55:15","date_gmt":"2018-01-24T08:55:15","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=148599"},"modified":"2025-01-20T04:24:10","modified_gmt":"2025-01-20T09:24:10","slug":"landbank-board-okays-in-principle-pds-shares-acquisition","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2018\/01\/24\/landbank-board-okays-in-principle-pds-shares-acquisition\/","title":{"rendered":"Landbank Board okays in principle PDS shares acquisition"},"content":{"rendered":"
\"(Photo<\/a>
Landbank Logo (Photo by Landbank<\/a>)<\/figcaption><\/figure>\n

MANILA – – The Board of Directors of Land Bank of the Philippines (Landbank) on Tuesday has \u201capproved in principle\u201d the proposal for the government financial institution (GFI) to buy at least 66.67 percent stake\u00a0 in Philippine Dealing System Holding Corp. (PDS).<\/p>\n

\u201cLBP Board just approved in principle to acquire at least 66.67 percent common shares of Philippine Dealing System Corporation subject to compliance with all legal and regulatory requirements,\u201d Landbank President and CEO Alex Buenaventura said.<\/p>\n

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<\/p>\n

Buenaventura earlier said his recommendation to the Board on the shares purchase was aimed at helping increase the bank\u2019s profit.<\/p>\n

\u201cThe objectives are to increase Landbank profits and to accelerate development of capital markets in the country,\u201d he said.<\/p>\n

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<\/p>\n

In his January 16, 2018 letter to the Landbank Board of Directors, Buenaventura said his proposal was based on the fact that the bank currently had a 1.<\/p>\n

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56 percent stake in PDS \u201cthrough the Bankers Association of the Philippines (BAP).<\/p>\n

He said BAP signed a Share Purchase Agreement on June 15, 2017 that allowed the Philippine Stock Exchange (PSE) to acquire 1,488,902 common shares equivalent to 23.8 percent of PDS\u2019s total outstanding stock for PHP 476,448,640 or at PHP320 per share.<\/p>\n

\u201cThis implies a valuation of PHP2 billion for PDS and a PE (price earnings) ratio of 8.10x based on 2016 PDS earnings,\u201d he said.<\/p>\n

PE ratio is the proportion of a company\u2019s share price vis-\u00e0-vis its per-share earnings.<\/p>\n

This valuation, he said, is however, lower than it should be and noted that \u201cresearch on the financials of comparable market infrastructure enterprises in the region and globally show that such businesses trade at an average LTM (last twelve months) PE ratio of 34.1x and 35.8x, respectively.\u201d<\/p>\n

\u201cThis indicates that at a price of PHP320 per share, PDS is undervalued and purchasing PDS shares could be a profitable investment for LBP,\u201d he said.<\/p>\n

The Landbank chief said the bank \u201cwill benefit from stable recurring cash flow from the various fees PDS charges to market players as the country\u2019s central securities depository and fixed-income exchange.\u2019<\/p>\n

He said more than 70 percent of PDS\u2019 income comes from \u201cprovision of services as a depository, registry, and financial intermediary and over 20 percent of revenues come from trading services, the latter an area of opportunity as the local bond market matures.\u201d<\/p>\n

He explained that PDS \u201chas an asset-light business model and consistently registers healthy EBITDA (earnings before interest, taxes, depreciation and amortization) margins above 45 percent and wide net profit margins above 25 percent.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

MANILA – – The Board of Directors of Land Bank of the Philippines (Landbank) on Tuesday has \u201capproved in principle\u201d …<\/p>\n","protected":false},"author":33,"featured_media":148600,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[44593,44592,44594],"class_list":["post-148599","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alex-buenevantura","tag-landbank","tag-philippine-dealing-system-holding-corp","mauthors-joann-villanueva","mauthors-philippine-news-agency"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/148599","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=148599"}],"version-history":[{"count":1,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/148599\/revisions"}],"predecessor-version":[{"id":286110,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/148599\/revisions\/286110"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/148600"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=148599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=148599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=148599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}