First Pacific may buy back shares due to price slump

Conglomerate First Pacific Co yesterday described the poor performance of its shares this year as undeserved and said it would consider buying back stock if the slump continued.

After the Indonesian-controlled company's annual meeting, managing director Manuel Pangilinan said the company would wait until its interim results came out and if the shares were below the $9 level a buy-back would be considered.

First Pacific shares have under-performed the Hang Seng Index by 25.5 per cent in the past year, despite the company being included in the Hang Seng Index last August.

The stock fell as low as $8.95 last month. Yesterday it rose 30 cents to $9.70.

Mr Pangilinan said sentiment towards the conglomerate had been dampened by two main factors: The start-up costs for its Hong Kong Telecom's arm, Pacific Link, and the effect of the weakening Philippine's property market on its Fort Bonifacio development in Manila.

Mr Pangilinan said: 'Both fears are largely misplaced and largely exaggerated.' He said the Philippines property market should not be compared to Thailand as an oversupply was yet to occur.

Mr Pangilinan said the listing of the conglomerate's Philippines telecom arm Smart Communications was expected between July and September. The final date was dependent on the queue of companies currently waiting to list. Smart is eighth in line.

Mr Pangilinan said the Smart listing should be well received by the market despite recent weakness in Philippine stocks.

'The weakness does give us some cause for concern but I would like to think that even in the face of such conditions Smart will perform well,' he said.

Mr Pangilinan said Smart would raise US$250 million from its listing.

He said that in the first quarter of the year, Smart raised its subscriber base from 308,000 to 412,000 subscribers.

First Pacific executive director Thomas Yasuda said Pacific Link would soft-launch its Personal Communications Service (PCS) in July.

He said Pacific Link would spend $1 billion on developing the new PCS network over the next two to three years.