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Philippine Stocks Drop Most in Five Months; SM, PNB Lead Retreat

Philippine stocks fell the most in five months on speculation Philippine National (PNB) Bank won’t merge with a rival and on the prospect San Miguel (SMB) Brewery Inc. will be delisted for failing to meet the minimum public float.

SM Investments Corp. (SM), owned by billionaire Henry Sy, slid the most in three months and Philippine National, known as PNB, sank 5.1 percent after SM denied a report the group is in talks to invest in PNB. Bank of the Philippine Islands lost 2.8 percent after the exclusivity period for merger talks with PNB lapsed. San Miguel posted its sharpest loss in six months.

The benchmark Philippine Stock Exchange index slid for a fourth day, losing 1.5 percent to 5,623.85, the most since July 9, at the close in Manila. Shares in the measure, which hit an all-time closing high of 5,831.50 on Dec. 11, are trading at 18 times estimated earnings, compared with 15.3 at the end of 2011.

SM sank 3.3 percent to 816 pesos, the steepest retreat since Aug. 24, while its venture BDO Unibank Inc. declined 2.7 percent to 70.90 pesos, the sharpest loss since Oct. 19.

The SM Group, including its bank, are not in talks for an investment in PNB, Chief Financial Officer Jose Sio said in a phone interview today. The group, which include SM Investments, is making a bid for a PNB stake and in talks for a possible merger with BDO, the Manila Bulletin reported today, citing Sio.

“The statement poured ice cold water on market speculation that the SM Group is acquiring PNB,” Astro del Castillo, managing director at First Grade Finance Inc., said.

PNB sank 5.1 percent to 88 pesos, the sharpest drop since Sept. 2011, while Bank of the Philippine Islands lost 2.8 percent to 91.95 pesos. PNB has not received any official communication after the exclusivity period ended Dec. 15, it said in a disclosure to the stock exchange today.

Brewer Drops

San Miguel declined 2.9 percent to 33 pesos, the sharpest loss in six months. San Miguel Corp. (SMC), parent of the brewer, sank 4.6 percent to 101 pesos, the lowest close since November 2010. The brewer said the bourse rejected a request to extend a Dec. 31 deadline to meet a minimum 10 percent public float. The exchange said stocks that don’t meet deadline will be suspended from trading starting Jan. 1 and will be de-listed if they don’t meet the minimum float by June 30.

“There’s strong anticipation that a trading suspension and eventual de-listing of San Miguel Brewery will translate to lower valuation for the venture,” Alex Pomento, head of research at Macquarie Group Ltd.’s Manila unit, said by phone.

To contact the reporters on this story: Allen Wan in Shanghai at awan3@bloomberg.net; Ian Sayson in Manila at isayson@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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