By Lourdes O. Pilar, Researcher
NEWS of Emperador, Inc.’s inclusion in the 30-member benchmark Philippine Stock Exchange index (PSEi) and its plan to expand to Latin America next year lifted the liquor manufacturer’s stock price last week.
A total of P1.63 billion worth of 155.23 million shares exchanged hands from Aug. 10-14, data from the Philippine Stock Exchange showed. Emperador was the third most active stock that week.
Emperador shares finished at P10.98 apiece on Friday, up 20.7% from P9.1 a week ago. Since the start of the year, they went up 52.3%.
“This was mainly driven by the PSE’s announcement last Aug. 7 that Emperador will replace Semirara Mining and Power Corp. in the PSEi starting Aug. 17. This created demand on the stock from passive funds that are tracking the PSEi,” Philippine National Bank (PNB) Vice-President and Head of Equity Research Division Alvin Joseph A. Arogo said in an e-mail.
Mr. Arogo added the company’s plans to bring its local brandy brand to Latin America in 2021 has “helped marginally” in the stock’s price movements.
The PSE on Aug. 7 released the result of its semi-annual review of indices compositions. Included among the changes was the addition of Emperador to the PSEi, which means the company ranked among the highest in market capitalization and the top 25% by median daily value per month in nine out of 12 months, as well as having maintained a float level of at least 15%.
Emperador was also added to the PSE’s industrial subindex.
As of Friday, Emperador’s market capitalization was P162.37 billion, higher than Semirara’s P40.81 billion.
On Aug. 11, the Andrew L. Tan-led company said in a statement that its Mexican subsidiary, Casa Pedro Domecq, cornered 57% of the brandy market share in Mexico, citing data from marketing firm Nielsen Corp. This prompted the company’s plan to begin next year the export of its Emperador Brandy to Mexico and other Latin American countries.
Casa Pedro Domecq, which Emperador took control in 2017, manufactures three brandy brands in Mexico: Presidente, Don Pedro and Aztec de Oro. Together, these contribute 96% of Casa Pedro’s brandy sales in the country.
Emperador currently exports Emperador Brandy to North America, Asia, Europe, Russia and Africa.
Emperador’s brandy business accounted for P14.9 billion, or 69% of its total P21.5-billion revenues in the first half. Its attributable net income during the period grew 2.4% year on year to P3.3 billion.
The company controls Emperador Distillers, Inc.; Scotch whiskey maker Whyte and Mackay Group Ltd.; and Spain-based Bodegas Fundador S.L.U.
“Emperador’s share price will likely continue to be buoyed by buying from passive funds,” PNB’s Mr. Arogo said.
In a separate e-mail, Mercantile Securities Corp. Analyst Jeff Radley C. See said the stock “might slide a bit” as investors take the opportunity to sell at a profit, but noted that overall, “it is still bullish.”
Mr. See pegged the stock’s support at P10 and resistance levels to be between P11.50-P11.60.
