PHILIPPINE stocks on Wednesday fell for a fourth day, with the key index posting its biggest two-day drop in seven months.
Philippine Long Distance Telephone Co., also known as PLDT, had its largest slide in more than three years and accounted for two-thirds of the key index's decline. Morgan Stanley on Tuesday cut its call on the shares of the company that accounts for almost a fifth of the benchmark index.
The Philippine Stock Exchange Composite Index fell 36.46, or 1.7 percent, to 2,060.92 at the noon close in Manila , trimming a loss of as much as 2.5 percent. The index declined 3.4 percent in two days, its largest slide since the two days ended July 5.
"The downgrade in PLDT is creating a stampede on other stocks," said Jerome Gonzalez, who helps manage about $16.4 million at PhilEquity Fund. "Investors use PLDT as a proxy for the market and the stock helped fuel the market's rise in the past three years."
PLDT, the nation's largest phone company, fell for a second day, declining P110, or 6.2 percent, to P1,680, the biggest drop since October 15, 2002. It lost 3 percent on Tuesday after Navi Killa, an analyst at Morgan Stanley, cut his call on the stock to "equal-weight" from "overweight" on the view the shares have "limited positive given slowing mobile growth and reasonable valuations."
The shares rose to a record on February 2 after gaining 35 percent last year to beat a 15-percent advance in the composite index. The stock rose 40 percent in 2004 and more than tripled in 2003, helping the key index add 26 percent and 42 percent, respectively.
Wednesday's decline pulled the composite index to its lowest since December 19, wiping out gains that reached as much as 3.4 percent this year.
"PLDT is a key index component," said Erick Tan, who helps manage about $4 billion at BPI Asset Management Inc. "A sharp movement in PLDT affects sentiment in other stocks, creating a good opportunity for people to lock-in their gains."
Tan said PLDT's decline Wednesday makes the stock a "relatively good buy."
Pilipino Telephone Corp., the nation's third-largest mobile-phone company and a unit of PLDT, fell 10 centavos, or 3.1 percent, to P3.15 after tumbling 4.4 percent Tuesday. The stock is at its lowest since November 7.
Ayala Corp., owner of the nation's largest property developer and its second-biggest mobile phone company, fell P7.50, or 2.3 percent, to P325, its biggest decline since January 18.
Bank of the Philippine Islands, the nation's second-biggest lender by assets and a unit of Ayala, fell 50 centavos, or 0.9 percent, to P57.50, a 10-day low.
PhilEquity's Gonzalez said the decline is a "good opportunity to buy banks and property stocks," which are expected to post stronger earnings this year as lower interest rates will spur demand for loans and real estate assets.
ABS-CBN Broadcasting Corp., the nation's largest TV and radio network company, fell 75 centavos, or 6.5 percent, to P10.75, its worst decline since November 15.
The government said Tuesday after trading closed that three company officials may be liable for a stampede during the weekend that killed more than 70 people who went to watch an ABS-CBN show.
The Philippine Stock Exchange said trading, which begins at 9:30 a.m., was halted for 18 minutes due to technical problems. Trading resumed at 10:10 a.m. after it was halted at 9:52 a.m., Lito Averia, vice president and chief technology officer said.
"We are still looking for the cause of the technical glitch," he said.
Shares worth P1.72 billion (US$33 million) were traded, 58 percent more than the six-month daily average. Losers edged gainers, 52 to 22, with 43 unchanged. Bloomberg
http://www.businessmirror.com.ph/2006/0209/09%20cos%20rpstocks.php
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