PSEi down as telcos drop on third player search

THE MAIN INDEX plunged on Wednesday after investors sold down listed telco stocks as they anticipated the declaration of the winning third player.

The bellwether Philippine Stock Exchange index (PSEi) spiraled down 2.03% or 146.18 points to close at 7,033.93 yesterday. The broader all-shares index likewise shed 1.67% or 73.16 points to 4,298.92.

“The main index closed lower again today as most investors focused on trading second-liners in anticipation of the third telco bidding documents submission,” Eagle Equities, Inc. Research Head Christopher John Mangun said in an e-mail on Wednesday. “$GLO (Globe Telecom, Inc.) and $TEL (PLDT, Inc.) took major hits today which was to be expected as investors moved to companies that would challenge the current duopoly. This also dragged the main index down.”

Shares in Globe dropped by 8.92% or P188 to P1,920 each yesterday, while PLDT also ended 5.64% or P79 lower to P1,321 apiece.

P2P Trade Online Sales Associate Gabriel Jose F. Perez also noted that the two companies may have been affected by the third telco decision, with Globe recording the third highest foreign outflow figure of P92 million.

ISM Communications, Inc., which could potentially be used for businessman Dennis A. Uy’s third telco bid, was the most actively traded for the day, surging 35.04% to P5.55 each. Chelsea Logistics Holdings, Corp., another Uy-led firm, also jumped 28.59% to P8.50.

Mr. Uy’s consortium with China Telecommunications Corp. emerged as the lone bidder to qualify for the next screening phase for the third telco selection process.

Mr. Perez added that investors may be looking forward to the release of third-quarter gross domestic figures on Thursday. The Department of Finance said on Wednesday that the economy likely grew by 6.5% in the third quarter. Meanwhile, a BusinessWorld poll of 15 analysts resulted in a median forecast of 6.3%.

“Price action for the index suggests that participants could be anticipating disappointing figures [on Thursday],” Mr. Perez said.

Mining and oil was the lone counter that eked out gains, adding 0.07% or 7.27 points to 9,837.51. The rest declined, led by holding firms which dropped 2.98% or 213.37 points to 6,926.43. Services slumped 2.94% or 43.37 points to 1,431.37; financials slipped 1.23% or 19.84 points to 1,589.84; industrials shed 0.96% or 104.04 points to 10,652.50; while property was down by 0.69% or 23.88 points to 3,392.77.

Turnover swelled to P46.50 billion after some 2.66 billion issues switched hands, primarily due to the crossing of shares related to San Miguel Food and Beverage, Inc.’s (SMFB) follow-on offering.

Foreign investors turned buyers, recording net purchases of P38.60 billion compared to the previous session’s P793.47 million net selling due to the block transactions by SMFB. Excluding the transaction, the market recorded a net foreign selling figure of P545 million.

Decliners were about quadruple that of advancers, 165 to 38, while 41 names were unchanged. •