What’s Up With Club Share Values?

The Orchard Golf and Country Club

You can’t help but be optimistic about golf in the Philippines these days. The success and growth of the Philippine Golf Tour has set the game ablaze and has rekindled the interest in the game. The number of rounds has gone up; I don’t need stats to tell me that. When I play there are more people on the tee in the public courses and at some clubs preferential tee times are at a premium. I personally know more people that have become interested in golf and are taking up the game.

So why the malaise in golf club share values?

Yes, I know all about the crash of the late 90’s. Golf club shares went down the toilet. Golf clubs whose shares pre-sold for PhP 800,000 or more couldn’t move them for a tenth of that price. But that was more than a decade ago. I also remember how many people lost their shirts speculating on the price of club shares but that was a bad financial move anyway.

Some share values have come back up. Manila Golf Club’s share price is back to well over thirty million Pesos from a low of less than twenty million. The values topped out at just over fifty million before the crash (BTC). Wack Wack Golf and Country Club is back up to over sixteen million Pesos also. Both these clubs did major renovations to their golf courses. Manila Golf’s revised course won world wide acclaim as the best redesigned golf course outside the United States by Golf Magazine.

The values of the fully subscribed clubs have remained fairly steady. Alabang Country Club, Baguio Country Club Cebu Country Club and Sta. Elena are in this category. Sta. Elena did reach a high of six million Pesos BTC but it was over valued at that point anyway. Cebu Country Club is planning a complete renovation of their golf course. It will be interesting to see how that affects their share values.

There are some clubs that came into the game while share prices were beginning their decline and failed to get any traction. Their shares are understandably lower in value today and will not appreciate without substantial additional investment or infrastructure improvements.

Some share values are affected by internal management issues that have made it into public awareness. This can’t be helped and little can be done without first resolving said issues.

What truly puzzles me is that the clubs that are making all the right moves are going unrewarded. The Orchard Golf and Country Club is the best example of this. In all my rounds at all the golf clubs that I’ve played in this country, few have attained the level of progressiveness and professionalization that The Orchard has done. Throughout it all and apart from a few teething issues, the club has continued to improve in every aspect. Yet all this hard work remains unrewarded with its share value hovering at a little over one tenth of what it was when the club was launched. This is unfathomable.

I realize that at the peak of club share prices most clubs were overvalued riding on a wave of greed and speculation. But that was almost two decades ago. Surely our market has had ample time to settle down and correct but on the surface of things it hasn’t and I’m truly at a loss of how to explain it.

So please educate me. Please.