Index tumbles 17 pts as investors cash in on profits

Index tumbles 17 pts as investors cash in on profits

The Philippine Star 01/07/2006
http://www.philstar.com/philstar/NEWS200601070705.htm

Philippine stocks declined yesterday as investors cashed in on three sessions of gains, traders said.

The benchmark 30-company Philippine Stock Exchange Index fell 17.14 points, or 0.8 percent, to 2,133.79, after rising 2.8 percent in the past three days, including the 0.6 percent advance Thursday to a 10-month closing high.

"There was profit-taking after three sessions of gains. But the momentum is still positive," said Citiseconline.com investment analyst Mark Alan Canizares.

Canizares said the improving fiscal position, rising remittances from overseas Filipino workers and low interest rates are still expected to boost the economy and corporate earnings.

Philippine Long Distance Telephone Co. (PLDT) fell 1.4 percent to P1,820, while Bank of the Philippine Islands was off 3.5 percent at P55, possibly on concern it is about to lose its position as the country’s second-largest commercial bank in assets after Banco de Oro announced during trading Friday that it has made an offer to merge with Equitable PCI. Banco de Oro will be the surviving entity.

Banco de Oro, which closed unchanged at P35.50, currently ranks as the seventh-largest commercial bank, while Equitable PCI, up five percent at P63, is No. 3.

China Bank was the most actively traded stock, gaining 0.8 percent to P610 on expectations it will eventually be merged with Banco de Oro and Equitable PCI. China Bank and Banco de Oro are both controlled by the group of retail tycoon Henry Sy. Last year, Sy’s group, including Banco de Oro, acquired the 24.76 percent stake of the founding Go family in Equitable PCI.

All sectoral indicators retreated except the property subindicator, which advanced. Decliners led gainers 46 to 31, while 50 stocks were unchanged.

Equitable PCI rose P3, or five percent, to P63, its highest close since November 2000. Banco de Oro, a lender owned by the nation’s richest tycoon Henry Sy, said it offered to merge with Equitable by exchanging 1.6 shares for every Equitable share. The share swap is worth about P41.3 billion. The lender already owns a 25 percent stake in Equitable.

"This could push up the value of Banco de Oro," said Jerome Gonzalez, who helps manage $15 million at Manila’s PhilEquity Fund. "This has been the earlier direction set by Banco de Oro’’ after the group bought a stake in Equitable PCI last year.

Banco de Oro, which said the merger offer will last until Jan. 31, was unchanged at P35.50. SM Investments Corp., which owns Banco de Oro, fell P1, or 0.4 percent, to P241.

Philippine stocks ended the week higher lifted in part by speculation that interest rates will remain low after inflation slowed in December.

Bangko Sentral ng Pilipinas Governor Amando Tetangco said yesterday that monetary authorities will have more "elbow room’’ in adjusting key interest rates after the government reported inflation in December slowed to 6.6 percent. – AP, Bloomberg