Best-Performing Property Stock of 2018 Seen as a Telecom Play

(Bloomberg) -- The performance of the world’s best property stock this year may have nothing to do with real estate.

Philippines-based Golden Haven Inc. has surged 1,386 percent this year, outpacing more than 2,700 other real estate stocks globally. While the cemetery builder’s recent push into the affordable housing market is seen as part of the reason, an even bigger factor appears to be speculation that billionaire founder Manuel Villar may use it as a vehicle to become the country’s newest telecommunications carrier.

“Until the nation’s third major telecom player is named, the market will continue to speculate on the stock’s potential involvement with Villar’s push into telecoms,” said Rens Cruz, an analyst at Regina Capital Development Corp. “The stock has moved far ahead of fundamentals.”

The rally has driven the company’s market valuation to more 200 billion pesos ($3.8 billion), overtaking all of the Philippines’ property stocks except SM Prime Holdings Inc. and Ayala Land Inc. The ascent has caused some market jitters, with volatility spiking over 300 percent in late January. Calls to Villar and Golden Haven President Maribeth Tolentino went unanswered.

The Philippine government has invited bids for frequencies as part of its effort to open the telecommunications sector to new players beyond PLDT Inc. and Globe Telecom Inc. Analysts estimate combined revenue for the duopoly of over 300 billion pesos this year. President Rodrigo Duterte plans to choose a third major carrier in May.

Read more on Philippine telecom speculation stocks.

Villar, known as “Manny,” is a former senator, with deep family ties in politics as well as holdings in various property-related companies. His wife Cynthia is a current senator and their son Mark is the Philippines’ public works secretary. Another son, Manuel Paolo, is CEO of Vista Land & Lifescapes Inc., a home and mall builder operating in more than 133 towns and cities throughout the country.

The family’s Streamtech Systems Technologies Inc. is seeking a franchise from Congress to initially provide fixed-line broadband services to residential communities developed by Villar group companies. The Villars haven’t ruled out the possibility of entering the mobile business eventually, Manuel Paolo said in an interview with the Philippine Daily Inquirer last year.

Golden Haven is in the process of changing its name to Golden Bria following its acquisition in December of Villar group low-cost housing firm Bria Homes Inc. A market hunch that it could be used as the listed vehicle for the family’s potential telecom foray have helped drive its shares as well as those of another Villar holding, Starmalls Inc., which has surged 160 percent year-to-date.

“Until the real story is out and known, the market speculation isn’t going to stop as everything will be possible,” said James Lago, an analyst at PCCI Securities Brokers Corp.

©2018 Bloomberg L.P.

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