MANILA -- Philippine conglomerate Alliance Global Group on Tuesday launched a 5-billion peso (approximately $100 million) share repurchase program.
Shares of the company rose 2.17% after morning trading, when the two-year program was announced. Group President Kingson Sian said the company will not be paying out dividends for this year.
"We are undertaking this corporate action because we believe that our shares are grossly undervalued," Sian said of the buyback program. "Our group has been consistently profitable, with attractive growth prospects, and enjoys strong brand equity and therefore views this exercise as a means to enhance shareholder value over time."
Alliance Global, which has a market capitalization of around 150 billion pesos, has interests in real estate through Megaworld, gaming through Resorts World Manila, liquor with the Emperador brand, and fast food in McDonald's Philippines.
Shares of the conglomerate have grown by 15.7% this year, while the Philippine Stock Exchange holding firm subindex, which the company is part of, has increased by 17.8%. By comparison, shares of SM Investments, which has a similar portfolio, have surged 29.8%.
Alliance Global's share price took a hit after an arson attack at Resorts World Manila in June resulted in more than 30 deaths, including that of the armed perpetrator. Parts of the casino complex halted operations for nearly a month after the incident, which raised security concerns at the group's Newport City development -- home to company owned hotels and condominiums.
However, the company's shares have recovered in recent weeks.
Sian said patrons at Resorts World Manila have started to return, while the adjoining hotels are seeing near-full occupancy rates. An expansion program, which will compensate for the parts of the casino that were closed is also underway.