PLDT stock advances on record profit

Business Mirror
Mar 1, 2006

PLDT stock advances on record profit

Philippine stocks rose on Monday, rebounding from the worst drop in more than two weeks, on expectations threats to oust President Gloria Macapagal-Arroyo will not stop the government from trimming the budget deficit. Ayala Land Inc. and International Container Terminal Services Inc. (ICTSI) gained.

The Philippine Stock Exchange Composite Index rose 19.43, or 0.9 percent, to 2,089.36 at the noon close in Manila . The benchmark fell 1 percent on February 24, its worst day in two-and-a-half weeks, after Mrs. Arroyo put the nation under a state of emergency after the military uncovered and stopped a plot to oust her.

"When things like this happen, we just don't sit and watch," said Winson Fong, who manages about $2 billion for SG Asset Management in Singapore . "If your view is that fundamentals are improving, then this short-term instability is a good buying opportunity."

Philippine Long Distance Telephone Co. (PLDT) and Pilipino Telephone Corp. (Piltel) reported record profits, helping lift the index from an earlier loss of as much as 0.6 percent.

Ayala Land Inc., the nation's largest property developer, rose 25 centavos, or 2.3 percent, to P11, reversing a 2.3-percent loss on February 24. ICTSI, the biggest port operator, rose 50 centavos, or 4.7 percent, to P11.25 after sliding 4.4 percent on February 24. Banco de Oro rose P1, or 3 percent, to 34 pesos after declining 4.4 percent on February 24.

"It is a good time to pick up stock and make money," said Fong. "That's the rule of the game: Pick up assets at discounted prices and make money once the market is back on the fairways."

Stocks also rose as both Fitch Ratings and Standard & Poor's separately said they plan to maintain their debt ratings on the Philippines after the state of emergency.

Mrs. Arroyo said in a televised address last week that she would use the military to maintain order and break up a group planning to establish an "extra-constitutional regime."

On February 1, the government increased the value-added-tax to 12 percent from 10 percent. The government is expecting an extra P75 billion (US$1.4 billion) in revenue from the tax changes.

"The political noise hasn't changed the country's fundamentals," said Mark Canizares, an analyst at CitisecOnline.com. "The government's fiscal reform is intact and the deficit will be cut. The stronger hands are betting on the fundamentals.''

Philippine stocks earlier this year climbed to their highest since March on speculation that the taxes will help Mrs. Arroyo narrow the deficit to P125 billion this year.

Separately, Piltel, the nation's third-largest mobile-phone company, rose 10 centavos, or 3.2 percent, to P3.20. The company said earlier Monday that its profit rose 38 percent last year to P13.5 billion as it serviced more calls and a stronger peso made its overseas debt cheaper in local currency terms.

PLDT, the nation's largest phone company and owner of Piltel, added P5, or 0.3 percent, to P1,780, extending a two-day climb. The company said its profit last year rose 22 percent to P34 billion, its highest ever.

Shares worth P1.16 billion were traded, 1.4-percent less than the six-month daily average. Gainers edged losers, 60 to 16, with 36 unchanged. Bloomberg