PLDT and Globe Telecom stocks kept the market afloat in positive territory on Monday following the announcement of the end of talks between San Miguel Corp. and Australia telecom giant Telstra, even as profit-seeking investors dumped shares in the wake of last week’s rally, analysts said.
The benchmark Philippine Stock Exchange Index (PSEi) closed just slightly higher, gaining 0.20 percent or 14.25 points to end the day at 7,112.89, while the wider All Shares was 0.19 percent higher or 7.76 points to finish at 4,103.52.
Philippine Long Distance Telephone Co. (TEL) shares closed higher by P197 at P1,901, an 11.56 percent increase, while competitor Globe Telecom, Inc. (GLO) jumped by P140 to P1,910, or 7.91 percent higher.
Alexander Adrian Tiu, senior equity analyst at AB Capital Securities Inc., said that profit takers swarmed the local bourse, which was expected after the PSEi managed to breach the 7, 000 level last week.
“This slowdown in the local bourse may only be attributed to the profit-takers swarming the market after its [PSEi] positive performance last week, where the 7,000 level was breached,” Tiu said.
Further, Tiu noted that although the market was expected to dip on Monday, it has nonetheless gone up because of the breakdown in the negotiation between conglomerate SMC and Telstra.
“Definitely, the breakdown in the negotiation between San Miguel and Telstra benefited the country’s two telco giants, PLDT and Globe. Such breakdown is inferred by investors as a positive development insofar as the country’s two telecom companies are concerned,” he said.
He explained, “Investors think that it would now be hard on the part of SMC to go into telco business alone.”
Meanwhile, Tiu also pointed out that the services sector sub-index, where PLDT and Globe are listed, soared by 5 percent or 71.29 points.
“For the rest of the week, investors will be waiting for the Federal Reserve’s decision. Although most of the investors are expecting that there would be no rate hike, any decision by the Fed will dictate where the global markets will be heading,” he added.
Meanwhile, Luis Limlingan, head of research and sales at Regina Capital Development Corp. in a separate interview agreed with Tiu, but added that the stock market has become “over-heated,” and thus a slight slowdown has been anticipated.
“We are up by about 15 percent since January. Therefore, it is only expected that investors sell their respective shares to enjoy their gains,” Limlingan said.
“Also, the SMC-Telstra negotiation breakdown only means that PLDT and Globe need not worry about a giant competitor,” he added.
Total value turn over was high at P8.387 billion, with losers edging out winners, 94 to 90, while 34 issues were unchanged.
Sub-Indices were mixed, with the financials, industrials, and holding sectors closing lower, while mining and oil enjoyed the biggest gain after the telecom-boosted services sub-index.