Business World
Tuesday, September 22, 1998
STOCK MARKETS
The weaker peso, weaker Asian markets and jitters over the impending closure of Philippine Airlines (PAL) yesterday extended the market's losses for the second day.
The 30-share Philippine Stock Exchange composite index (Phisix) dropped 10.35 points or 0.88% to 1,164.26 while the broader All-Shares Index dipped 3.08 points or 0.78% to 390.01.
Value turnover showed heavy selling as it reached P1.467 billion with 217.15 million shares changing hands.
Losers trounced gainers, 56 to 18, while the prices of 38 issues were unchanged.
Asian markets likewise showed listlessness, with Hong Kong and Tokyo indices posting drops of more than 200 points by midday over continued weakness in terms of prospects for emerging markets.
Reflecting the jitters, the peso yesterday plunged to an average of P44.148 to the dollar from Friday's P43.891 although volume at the Philippine Dealing System (PDS), the country's electronic currencies exchange, was thinner at $95.6 million.
Jose Ricardo Garcia, Executive Vice-President at Diversified Securities Inc., said the peso is weakening against the dollar on the back of PAL's impending shutdown.
"The market is still exhibiting weakness. People are coming down to their senses a bit from the euphoria initiated by PLDT the past week," Jasmine Juanico. analyst at Anscor-Hagedom Securities Inc., said.
PLDT
Dominant phone issue Philippine Long Distance Telephone Co. (TEL) led the gainers in the bearish market, climbing P20 to P860.
It accounted for three-fourths of market value with total shares traded worth P1.068 billion yesterday.
State pension firm, Social Security System (SSS) told the PSE it has already acquired 12.42 million shares of common stock of PLDT as of Sept. 17. Analysts estimated this would be equivalent to about 10% to 12% equity in PAL.
The acquisition of TEL shares came on the back of reports that certain parties are keen on acquiring shares of PLDT.
This has recently prompted PLDT management to impose a "poison pill" strategy through a shareholders rights plan to fend off a hostile takeover.
"It's PLDT and San Miguel supporting the market. Everybody's joining the bandwagon since the 'poison pill' issue. There has been a mad rush for shares since last week but a lot of foreign houses have taken profits," Diversified's Mr. Garcia said.
B shares of food and beverage firm San Miguel Corp. (SMCB) sold to foreigners climbed 50 centavos to P49.50. This accounted for 5% of the market value.
In contrast, its A shares (SMC) slid 50 centavos to P38.50.
Oil refiner Petron Corp. (PCOR) lost 10 centavos or 3.6% to P2.70 on the back of its outstanding receivables from the sale of jet fuel to beleaguered PAL.
State-run Philippine National Bank (PNB) meanwhile shed P 1.50 to P25.50 over its debt exposure to PAL.
PNB has loans to PAL amounting to $80 million.
"The bank stocks have not been the key favorites lately because of rising non-performing loans," Anscor's Ms. Juanico said.
Other blue chips which got dragged into the market mire included: real-estate giant Ayala Land Inc. (ALI) which fell 10 centavos to P5.70; Metropolitan Bank & Trust Co. (MBT) which shed P3 to P132: mall developer SM Prime Holdings Inc. (SMPH) which lost 10 centavos to P5; and holding firm Benpres Holdings Corp. (BPC) which dipped 20 centavos to P2.50.
The re-listing of banking issue Banco Filipino failed to attract some buying interest as no trades on the stock were recorded yesterday.
Its convertible issue (BFC) was pegged at a floor of a tenth of a centavo while its previous closing price traded at par P 100 per share. Its ceiling price was adjusted to P1,000 to allow the stock to find its market value.
The same could be said of its non-convertible preferred shares which failed to spark some interest at par P100 per share.
Analysts previously said the stock's relisting was somewhat ill-timed, owing to the bleak outlook on banking stocks.
OUTLOOK
Market investors are seen to continue following the mystery behind who has been buying into PLDT, as well as movement from bank and utility stocks due to the PAL exposure.
"Until you see the whole story unravel, there would be sellers and buyers of PLDT. In this case there has been more of local buyers and foreign sellers," Robert Cano, analyst at BPI Securities Corp., said.
For Diversified's Mr. Garcia, the market has continued to be weak and there's still lack of confidence expressed by investors on government's moves to pump prime the economy.
"This would reflect on the peso-dollar exchange," Mr. Garcia said. — E. L. Sanchez
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