AUGUST MARKET HIGHLIGHTS
August 31, 2000 Thursday
The positive momentum swing continued marked by 54 gainers against 31 decliners on the broad market and 21:6 for index-linked issues. Trade interest were modestly higher at Php981.9m from Php900m yesterday. Focus of trade activity (most active stocks) were on TEL, BPI, MERB, MBT, ALI and EBCW accounting for 54.6% of total turnover. Optimism towards the country’s economic growth has gradually attracted new participants while profit-taking from sizeable gains the past weeks has encouraged selective repositioning to other issues.
Meralco surged to its x-week high given the positive signals for the passage of the Omnibus Power Bill and on widespread belief that its long-awaited rate hike petition is forthcoming. EBC and EBCW gained interest anew given the absence of any notice of denial or termination of the bank’s ongoing negotiation for the entry of a new strategic banking partner. Ayala Corporation and Ayala Land Inc. received follow-through interest given iAyala’s ties with Mastercard International which will boost on-line purchases.
Newfound retail interest went to CMP (up 10%), MPC (up 1.6%) and PNB (up 1.8%) which had notable increase in trade turnover. CMP moved on rumors of newfound support for financing from global financial players who pledged their support during Pres. J. Estrada’s trip in the US. MPC marginally moved on speculative positioning ahead of FBCD’s decision due 3rd week of September since it submitted the highest bid for a mixed-used property component in Ft. Bonifacio. PNB gained on market belief that its relatively low effective free float and the absence of any dominant market seller (tail-end of foreign selling) on the issue can easily result to a strong price recovery. Some observers were spreading rumors that a bid is ongoing for the Templeton block for which a higher board price will move Templeton to sell its block considering they are dissatisfied with PNB.
Other notable gainers were URDI (up 48%), UP (up17%), and ELI (up10%). URDI gained on recovery hopes since it is the planned vehicle for BoC or its subsidiaries. UP became an indirect beneficiary of DMC’s likely cash hoard given the target sale of SCC (74% owned by DMC). Buying interest on ELI is attributed to the positive impact of its proposed debt-to-equity proposal with PNB (see our 08/30 market update).
Major index-linked movers were: CMP (up 10% at 0.32), CMT (up 6.7% at 0.32), ICT (up 4% at 1.04), and EBC (up 3.9% at 67.0).
PRICE SCAN:
FPH
– intraday high at 26.5 is a 17week record high
MBT
– closing price of 176.0 is a 5week record high
MERB
– intraday high at 66.0 is a 9week record high
BPC
– gap up at 3.95-4.05
EBC
– gap up at 64.50-65.0
EBCW
– gap up at 4.30-4.45
ELI
– gap up at 0.30-0.32
FLI
– gap up at 1.64-1.66
FPH
– gap up at 24.0-24.50
MEG
– gap up at 0.82-0.83
MER
– gap up at 60.5-61.0
MERB
– gap up at 64.0-64.5
V
– gap up at 1.76-1.78
Price gap down were on: BKD and GLOW
RECENT DEVELOPMENTS
Ayala Corporation (AC) informed the Exchange that iAyala Company, Inc., the Company’s subsidiary focused on Internet-related businesses, and global payments leader MasterCard International signed yesterday, 29 August 2000, a memorandum of understanding (MOU) to provide Filipino consumers with a fully-integrated e-commerce payments solution, through the use of MasterCard’s payment products. The tie-up will allow MasterCard Philippines’ member financial institutions to offer the widest range of payment solutions to their customers who wish to transact online. (AC and ALI is rated a LongTerm Buy)
Globe Telecom announced that it has tapped Lucent Technologies for the supply of high-speed digital subscriber line (DSL) access equipment. By deploying Lucent’s Stinger™ DSL Access Concentrator, Globe Telecom will be able to provide its customers with fast access to the Internet, high-speed IP VPN services and converged data, voice and video applications. (GLO remains a rated BUY)
ABS-CBN Broadcasting Corporation (ABS) informed the Exchange that at the Board of Directors meeting held on August 31, 2000, Mr. Fernando Lopez III resigned as a director and the Board of Directors elected Mr. Manuel Lopez, Jr. to serve the unexpired term of Mr. Fernando Lopez III as director. Corporate insiders say Mr. M. Lopez still will continue to be in its IT department.
RFM Corporation confirmed the possibility of the backdoor listing of philstar.com via Selecta Dairy Products, Inc. (SLT). However, negotiations with Philstar.com, Inc. have not yet been finalized. SLT plans to venture into electronic commerce, a plan disclosed under the Definitive Information Statement filed by SDPI with the SEC in preparation for its 28 September 2000 special stockholders. (for further evaluation)
August 30, 2000 Wednesday
Guarded optimism towards the country’s economic growth prospects reeling from yesterday’s stronger than expected 2Q GDP/GNP data release prompted investors to join the momentum run-up. Albeit too early to guarantee a smooth glide towards economic recovery, selective repositioning was inevitable on increased expectations that foreign buy flows are forthcoming.
The bullish economic undertone lifted all sector indices marked by 47 gainers against 30 decliners on the broad market. Index-linked stocks had 15 gainers with merely 2 decliners namely, MPC and PLTL.
Trade activity were marginally lower at Php900m from Php1.13b yesterday. Focus of trade activity (most active stocks) were TEL, EBC, MERB, BEL, MBT and BPC. TEL and EBC accounted for 15.1% and 11.6% respectively of total market turnover.
Foreign buy flows were more noticeable on TEL, MERB and MBT. Retail trade interest went to EBCW, CHTR, UW and GEI. Surprising surge in trade activity were on BEL, CHTR and MAC. Major trade participants on BEL, CHTR and MAC were largely from domestic brokers.
Major index-linked movers were: CMP (up 11.5% at 0.29), PCOR (up 4.76% at 1.32), DMC (up 4.76% at 0.44), and MERB (up 4.1% at 0.44). Other non-index movers were CHTR (up 18.5%), EBCW (up 10.3%) and FPH (up 7.9%). ChinaTrust or CHTR closely follows EBC trend on persistent rumors that it will be the latter’s new strategic partner. First Phil. Holdings or FPH was up on wider investor interest from its indicative positive cash flow given the on-target operations of its Sta. Rita power plant.
PRICE SCAN:
TEL
– intraday high at 770 is
PCOR
– intraday high at 1.34 is a
FPH
– intraday high at 24.0 is
ATN
– gap up at 3.10-3.0
BELW
– gap up at 0.125-0.130
BPC
– gap up at 3.90-3.95
BPI
– gap up at 67.50-68.0
FPH
– gap up at 22.25-22.50
GEI
– gap up at 0.61-0.63
MEG
– gap up at 0.81-0.82
MERB
– gap up at 61.50-62.0
UW
– gap up at 0.58-0.59
Price gap down were on: ATN, GLOW, MPC, PLTL, PSB, and SPI
RECENT DEVELOPMENTS
First e-Bank Corporation (“FSTE”) denied that there are no such merger talks as stated in the news article of PDI.
Leisure & Resorts World Corporation (“FER”) disclosed the incorporation of Bingo Gallery Incorporated under its subsidiary - AB Leisure Exponent, Inc. (AB Leisure). Bingo Gallery Incorporated has started its bingo operations at the 2nd Floor Bonifacio Market, EDSA Monumento, Caloocan City.
EEI
Corporation announced that it has concluded a collective bargaining
agreement for the
period
2000 to 2003 with its rank-and-file union EEIPWU which was signed last
August 23.
PLDT issued a clarification on two issues reported in a news daily (PDI):
1)
Smart Communications, Inc. is acquiring a 40-percent stake in Eastern Telecommunications
Philippines, Inc. by exercising its right of first refusal on or before
Sept. 17. – PLDT clarified that the issue is still under consideration
and will be considered and decided by the Board of Smart on a date prior
to September 17, 2000.
2)
PLDT to get $2 billion in fresh investments from its partners by the end
of the year. – PLDT clarified that the articlerefers to NTT Communication’s
investment in PLDT amounting to approximately US$360 million made last
24 March, 2000 and the agreed purchase by First Pacific Company Limited
(First Pacific) of the PLDT shares owned by the Metro Pacific Corporation
(Metro Pacific) in the amount of approximately US$275 million. The
special block sale of the PLDT shares of Metro Pacific to First Pacific
is now before the SEC on appeal. However, the proceeds from the latter
transaction will not flow into PLDT directly, since it is a transaction
between PLDT shareholders. PLDT noted that it cannot confirm with
certainty that the amount will eventually be US$2 billion.
PLDT also announced its cash dividend :
CASH
- P1.20 per share
EX-CASH
- September 11, 2000
RECORD
DATE - September 15, 2000
DATE
PAYABLE - October 15, 2000
Waterfront Philippines, Incorporated (“WPI”) informed the Exchange that its Board postponed the Annual Stockholders’ Meeting to a later date to be announced as soon as the same may be fixed, to allow more time for the preparation and completion of financial and disclosure reports.
Urban
Bank, Inc. (“URB”) informed the Exchange that the special meeting of its
stockholders scheduled on Thursday, 7 September 2000, has been postponed,
to allow more time for the completion
of
the documents and the preparations for the proposed merger between Urban
Bank, Inc., Urbancorp Investments, Inc. and Bank of Commerce before presentation
of the proposal to the stockholders of URB. BOC has reset URB’s
reopening to November 2000.
August 29, 2000 Tuesday
Stronger than expected 2Q economic growth data and the bullish undertone of regional markets gave investors a shake-up as data reflects the country’s improving economic fundamentals contrary to what is perceived.
Philippine GDP rose 4.5% in 2Q from a revised 3.2% growth in 1Q on the back of strong exports, services and the manufacturing sector. Exports grew 13.3% in 2Q from 9.6% in 1Q while the services sector expanded 5% in 2Q from 3.8% in 1Q. The Socio-economic Planning Group also expects CPI for August to be marginally rise to 4.7% from a 1Q CPI at 3.4%.
Trade activity rose to Php1.13b from Php802m the previous day on broader share gains (gainers to decliners ratio at 44:23 across the board and 16:5 for index-linked issues). Focus of trade interest (most active stocks) were on TEL, MBT, GLO, ABSP, SLC, and GEI. Net foreign buying continued to be observed on TEL and MBT. Government financial institutions were keenly buying market select heavyweights such as SMPH, ALI, EBC, BPC and ION.
Retail investor activity were on GEI, BW, UW, WEB and BPC. Profit-taking activity went to GEI and UW after the past day’s strong rally while renewed positioning went into BW, WEB and BPC.
Major
index-linked movers were: ABS (up 4.3% at 49.0), CMP (up 4% at 0.26), LCB
(up 3.6% at 0.29), and ION (up 3.4% at 15.25). Other non-index linked
active movers were EBCW (up 11.4% at
3.90)
and BW (up 5.4% at 2.95).
The Government sold Php3b worth of 10-year bond at 14.625%.
PRICE
SCAN: ABSP – gap up at 47.5-48.0
AJO – gap up at 1.26-1.30
OM – gap up at 0.0075-0.0080
PCOR – gap up at 1.24-1.26
PLTL – gap up at 0.88-0.89
PNB – gap up at 54.0-55.0
V – gap up at 1.76-1.80
RECENT DEVELOPMENTS
Filinvest Land Inc. has indicated strong strategic thrust to improve its retail operations. Corporate insiders have expressed management’s keen interest to take advantage of the opportunities provided for under the new retail trade law.
The National Broadcasting Corporation, a PLDT subsidiary, announced the target launch of a music channel in partnership with MTV Networks Asia next year.
Pilipinas Shell wants to defer its mandated public listing early next year due to unfavorable market conditions.
Liberty Telecoms Inc. denied reports that Globe Telecoms is renegotiating to maximize the joint use of Liberty and Islacom of its assigned frequency.
Management of Ajonet has highlighted global investment thrusts of its IT business. Foreign consultants have been tapped to lift its business exposure/ties for global operations.
Meralco
confirmed news reports citing the Lopez Group’s interest in buying the
government’s stake in the firm provided it is within its conditions which
was not stipulated.
August 28, 2000 Monday
CONTENTS
The partial release of the Mindanao hostages and initial indications of a higher-than-expected 2Q GDP/GNP data buoyed general market sentiment. Investor positioning were notably more aggressive than the past week as gainers outnumber decliners 42:29 across the board and 16:7 among index-linked issues.
The country’s socio-economic planning director reported a significant recovery in the agricultural sector from 0.11% in Q1 to 4% in Q2. As such, GDP growth will likely surpass market estimates with revised numbers pointing to at least 3.8%.
Focus of trade activity (most active stocks) were TEL, BW, AC, MBT, SLC and SMCB which altogether accounted for 61.14% of total market turnover. TEL and BW led board activity with a total value turnover contribution of 21.99% and 9.2%, respectively. Net foreign buying continued on TEL on marked gains on benchmark NY price of US$0.50 ( at US$16 7/8 or at Php857/share). Top TEL sellers were largely local brokers.
Sell-off on BW extended further on a growing disinterest by investors to participate in its proposed capital hike which includes a rights offer set on November 2000.
Aside from BW, retail investor focus flowed anew towards UW, GEI, WEB and V which altogether accounted for 20.5% of total market turnover.
Major movers with modest value turnover were: CEI (up 22% at 0.49), GEI (up 14.6% at 0.63), MACW (up 9.7% at 0.07), and BELW (up 8.3% at 0.13). Top gainers among index-linked issues were: PNB (up 4.9% at 54.0), DGTL (up 4.6% at 0.69), CMP (up 4.2% at 0.25), and ALI (up 3.9% at 5.30).
The Tbill auction today was mixed: 91day inched lower at 8.917% from 8.933; the 182day slightly firmed at 10.314% from 10.265%; and the 364day declined to 11.242% from 11.265%.
PRICE
SCAN: TEL – gap up at 735.0-745.0; intraday high at 755
is a 5week record high
BW – intraday low at 2.65 is a 16month record low
AHI – gap up at 0.85-0.89
FPH – gap up at 22.0-22.25
JFC – gap up at 12.0-12.25
LTDI – gap up at 32.0-32.25
PNB – gap up at 51.5-54.0
SGI – gap up at 1.0-1.04
SPI – gap up at 8.70-8.80
CEI – gap up at 0.40-0.44
MAC – gap up at 0.72-0.75
ABS – gap down at 47.50-47.0
EBC – gap down at 65.0-63.50
EBCW – gap down at 3.95-3.75
MEG – gap down at 0.82-0.81
MERB – gap down at 62.50-61.50
RECENT DEVELOPMENTS
RCBC and Equitable-PCIB has approved the proposed rehabilitation program of Uniwide Holdings, Inc..(UW). (The creditor’s met today to facilitate the approval of other creditors. Details to follow.)
Pagcor has been consistent in defending the license granted to Sage for the operation of on-line gambling. The soft-launch has been initiated a month ago while its formal launch is targeted this September. Market impact is positive for Leisure and Entertainment (FER) which holds the franchise to operate on-line casino operations under partnership with SAGE, Inc..
Cement
manufacturers claim that the influx of cheap imported cement has increased
in market share from 45% last March to 55% as of July.
August 25, 2000 Friday
Pockets of positive corporate developments marginally kept the index higher on a generally mixed market sentiment. The index held its ground as followthrough investor interest went to PLDT and MERB while other heavyweights marginally moved lower on moderate trade activity.
The anticipation of the government’s release of 2Q GDP/GNP data next week kept trade activity relatively subdued. Value turnover reached Php764m with significant trade flows on select secondliner and speculative issues namely, BW, DGTL, UW and GEI which altogether accounted for 26.4% of total market turnover. .
Despite overnight gains of the Dow and Nasdaq, overall investor cautiousness prevailed with the broad market closing with 38 gainers and 34 decliners while index-linked issues had 9 gainers and likewise 9 decliners. Index-linked issues that gained were: PNB (up 5.2% at Php51.50), CMP (up 4.4% at Php0.24), LND (up 3.9% at Php0.54), and MPC (up 3.3% at Php0.63).
PLDT rose to a x-day record high at Php735 on renewed optimism that product launches and network ties for its e-commerce business thrust under its convergence focus will negate declining revenues of its traditional ILD/DLD base. Recent order flows reflect increased foreign and domestic institutional buying.
Meralco rose to a second consecutive share price gain (a 12day record high) as Chair E. Lopez confirmed that at least three (3) foreign investors are eagerly waiting to participate in the government’s plan to sell its 14% stake in Meralco by December this year.
BW declined to its 6month record low as investors seem to show disinterest towards the recently announced rights offering set in November this year.
Digitel (DGTL) fell 4.3% on possibly growing concern of lower ILD/DLD call volumes as it has not matched the rate cuts of other phone operators. Likewise, its competitor’s aggressiveness will greatly make it difficult for its soon-to-be launched mobile phone business. Today’s noticeable institutional selling are likely to be short-lived given its relatively low free float.
Uniwide Holdings (UW) closed to a 22week record high on rumors of an early completion of the approval of its rehabilitation program by its creditors. Order flows were largely from domestic brokers but indications of a “surprising “government institutional purchases and its technically poised share price recovery drove retail participants to chase prices higher.
Global Equities Inc. (GEI) gained anew (up 19.5%) on increased retail interest on likely value-anticipation given the company’s reorganization as an e-commerce firm (see our August 23 and 24 corporate update).
For next week, anticipate sharper price movements or greater volatility as key developments will ascertain the real price trend. On the macroeconomic front, the widely anticipated economic growth slowdown from the 2Q2000 GDP/GNP data release the next week will prompt reassessment of economic activities in 2H2000 amid the threatening global oil price hike, the legislated wage hike implementation, the transport fare hike and the country’s growing fiscal deficit. Modest fears on inflation data due to be released the following week will gradually be discounted as key focus will be on the country’s economic progress. Hopeful interest may be realized on the expected end of the Mindanao hostage crisis before President Estrada ends his stay in Mindanao
PRICE
SCAN: AC – gap down at 7.10-7.0
AHI – gap down at 0.86-0.85
BPC – gap down at 3.90-3.85
BW –intraday low and close at 3.10 is a 6month record low
EBC – gap down at 65.50-65.0
PCOR – gap down at 1.28-1.26
SPI – gap down at 8.80-8.60
FLI – gap up at 1.60-1.64
GEI – gap up at 0.46-0.47
MEG – gap up at 0.80-0.82
MPC – gap up at 0.61-0.62
PNB – gap up at 49.0-49.50
TEL – gap up at 715-735
RECENT DEVELOPMENTS
The approval of the PSE on the proposed warrant life extension on Omico Corporation (OM) is due September 6th – the tentative date for the next PSE Board Meeting.
SPI Technologies (SPI) will proceed with its Php215m stock rights offering. Notable institutional buying on the board have been initiated by select foreign financial groups. One or two additional call center contracts is likely to be clinched next month.
The Philippine National Bank (PNB) announced that the SEC-approved change in its par value (from Php100 to Php60) will take effect on Monday – August 28th.
Metrobank officials have confirmed that profit estimate for the year have been downgraded anew to flat from a 5%-10% income growth target for the year.
BPC’s telecom affiliate-Bayantel confirmed its firm optimism to operate its mobile phone operations by announcing a shortlist of suppliers (Nortel Networks, Lucent Technology, Siements, Alcatel and Ericsson).
Market talks have included PLDT’s holding firm – Mediaquest as a potential buyer for the government’s sale of Channel 13.
Active Alliance Inc. (AAI) will proceed with its initial public offering (IPO) in October. Preliminary IPO details are as follows:
Name
of Firm:
Active Alliance Inc.
Business:
Manufacture of printed circuit boards (PCB)
Year
Established: December 1999
Majority
Owner:
Lincoln Chan
Amount
to be raised: Php50m to Php80m
Use
of funds:
To finance manufacturing plant establishment, lease payment and
working capital
Number
of shares: 50m to 80m shares
Offer
Price:
Php1.0/share
Par
Value:
Php1.0/share
Lead
Underwriter: Security Bank
August 24, 2000 Thursday
Investor’s search for an impetus to chase prices remain unanswered. Trade activity was exceptionally concentrated on TEL, MBT and GLO while other issues were relatively slack. TEL and MBT cornered 37.7% and 7.5%, respectively of total market turnover which was marked by significant foreign buying activity.
Adding to domestic financial market concerns were the reported hysteria on US dollar placements on account of newly applied requisites by a few banks to stipulate a lock-up period on US dollar deposits and placements. Such situation resulted to a mild panic which pushed the peso-dollar rate at Php45.015/USD. If remain unchecked, such situation could further erode confidence to the financial system.
The index stayed mix as index-heavyweights reflected some rotational buying interest. Preferential entry went to defensive and undervalued stocks (TEL, MBT, GLO, ABSP, BPI) over property and conglomerates (AC, ALI, SMPH). But sell-off activity was relatively thin and price ranges were tight.
Decliners outnumbered gainers 39:25 across the board and 11:4 for index-linked issues. Marginal gains of index-heavyweights TEL, EBC, MERB and PNB were enough to keep the index sideways. Index-linked issues that declined were: CMP (down 11.5% at Php0.23), FLI (down 3.6% at Php1.60), PLTL (down 3.4% at Php0.85), and SMPH (down 1.9% at Php5.30).
Growing signals for an inevitable interest rate increase, given the marginal rise in Tbill rates on last Monday’s auction and similarly from the marginal rise in long-term bond rates was an excuse to sell interest rate sensitive property firms.
Retail investor focus the past days on EBC, EBCW, and GEI continued but unlike yesterday’s profit-taking mode, the share prices of the aforementioned issues recovered. EBC and EBCW inched higher as sellers held back in anticipation of a near announcement of either the resolution of the block sale to a partner or its erstwhile postponement. News reports of GEI’s internet business launch and its definitive business plans restored speculative play allowing its share price to gain 9.5% and recover from its 7% decline yesterday.
PRICE
SCAN: BPI – closing price of 68.50 is a 22day record high
TEL
– closing price of 715.0 is a 3.5week record high
AJO
– gap down at 1.32-1.30
SPI
– gap up at 8.50-8.70
LTDI
– gap down at 33.0-32.50
ATN
– gap down at 3.05-3.00
WPI
– gap down at 0.60-0.58
RECENT DEVELOPMENTS
The Philippine National Bank (PNB) confirmed news reports of BW ‘s petition for restructuring for its P600m loan which is partially secured.
World Bank – IMF officials has reiterated the need by government to pursue the privatization of NAPOCOR, a precondition for the release of the next dollar loan facility. The joint-legislative committee hearings on the omnibus power bill will begin anew in September which is programmed to be signed into law in the same month. Another hurdle on the Napocor’s privatization is a recent petition from Napocor employees on alleged labor code violations undertaken by Management in preparation of the privatization. Expect added interest to privatization beneficiaries namely, Meralco, First Philippine Holdings, Aboitiz Equity Ventures, and Omico Corporation.
Global Equities Inc. (GEI) announced the upcoming launch of a B2B portal (PhilBx) by its soon-to-be merged IT firm – SSI. PhilBx aims to bring together a network of banks, suppliers, small and medium firms, etc. on its portal. Initial companies targeted to participate includes Dole, SMC, and RFM)
NTC’s public hearing on service complaints were solely directed to Globe Telecoms which Globe’s legal counsel Roberto Salalima questioned. NTC’s Common Carrier Authorization Department questioned Globe’s inadequate capacity to service is huge subscriber base and its toll charges on select services (eg. carrier information service website access). The public hearing was not productive as Globe continually questioned NTC’s procedure in determining who to summon for the hearing since other telecom operators were not summoned despite similar complaints. Another hearing will be held next week.
August 23, 2000 Wednesday
Share prices marginally closed lower amid a growing belief that current developments does not justify a broad-based move to chase share prices further. The recent two-day trend decline of the benchmark index from a 14day trend rally and the notable lack of new developments stoked market confidence and strengthened expectations of further profit taking.
Market activity was highly concentrated on TEL, MBT and ION, which altogether accounted for 52.2% of total turnover. Today’s top 3 most active (TEL, MBT, and ION) closed higher on likely value-based accumulation. TEL is moving parallel with the Phisix (up 7.5%) from the uptrend since end-August but its huge 28% discount to adjusted book value puts the issue among the defensive stock list. MBT benefited from institutional buying since it has underperformed the index the past month (3.7% vs 7.5%). Ionics Inc. is exactly a unique case as its newfound stream of manufacturing contracts and strong profit growth prospect easily propelled the issue as the market favorite.
Overall cautiousness was apparent as decliners outnumbered gainers 47:22 across the board and 11:7 for index-linked issues. The Phisix stayed in negative territory dropping to a low 1484.96 or down 12.02pts around mid-trading session. Major index-linked issues that declined were: CMT (down 9.1% at Php0.30), EBC (down 5.2% at Php64.5), SMCB (down 2.8% at Php53.0), and MEG (down 2.4% at Php0.80).
Marginally higher Tbill rates last Monday’s auction also resulted to a higher 7yrTbond rate at 14.257% from 14.198%
Retail investor focus the previous days on EBC, EBCW, WEB, and GEI resulted to a bout of profit-taking today with only WEB closing unchanged.
PRICE
SCAN: ION – gap up at 14.0-14.25
SPI – gap up at 8.40-8.50
BW – intraday low at 3.85 is a 14week record low
RECENT DEVELOPMENTS
Globe Telecoms (GLO) is currently conducting a phone survey among subscribers to determine the actual service rating. The survey will be used for further service upgrades and for its defense on alleged disservice currently being investigated by NTC. The public hearing on consumer complaints on mobile operators is set tomorrow 2pm.
Global Bank (GBB) reported the Board’s approval for a Php2b stock rights offering at a price that will either be based on its book value or an average trading price for a designated period – whichever is higher. GBB shares are highly illiquid with last traded price at Php80/share. Adjusted book value is estimated to be higher than Php120/share (for further verification on the merged book value). GBB also announced the 100% sale of AB Card Corporation to parent-bank credit card subsidiary Unicard Corporation.
BPI announced the SEC’s approval for the increase in its capital stock from Php17.6b to Php29.6b and has set the record date of its 25% stock dividend on September 12 (exdate on September 6)
August 22, 2000 Tuesday
Vigilant stock picking turned mixed and kept the Phisix sideways. Trade interest based on value turnover had a momentum buy into AC, MBT, SMPH and ION while sellers trooped to BPI, TEL, MERB and EBC. No pertinent followthrough interest went to the warrants which was a big hit the past trading days. Regional markets and the forex exchange provided minor support with the HK’s Hang Seng up 0.62% at mid-day while the peso firmed to Php44.905/USD from yesterday’s close at Php44.96/USD.
Tbill rates were marginally higher: 364day at 11.265% from 11.253%, 182day at 10.265% at 10.181%, and 91day at 8.933% vs 8.929%.
The Phisix narrowly moved at +7.09pts / -2.78pts with the C-I and the Property sector index closing higher. Decliners outnumbered gainers 51:31 while index linked stocks had 13 losers and 9 gainers. Focus of market interest (most active stocks) were on BPI, TEL, MERB, AC and MBT which altogether accounted for 55.4%.
Retail
investor focus went to GEI, WEB and ION while notable sell-offs were on
SPI and EBC/EBCW.
GEI
gained 28.6% with “noted GEI forerunner broker” – Guild Securities inspiring
buyers as it led net buyers and accounted for 23% of total transaction.
ION had an ample foreign and domestic buying with Asiasec and Abacus leading
buyers with a commanding 68% of total transaction. SPI succumbed
to profit-taking after a 36% price surge this August from 7.0 to a high
at 9.50. SPI fell 6.7% to 8.40 with foreign brokers (BNP and WiCarr)
leading sellers and accounted for 50% of total turnover.
Index-linked price movers were: ION (up 3.7% at Php14.0), AC (up 2.9% at Php7.20), AEV (up 2.7% at Php1.54), and JFC (up 2.1% at Php12.25).
PRICE
SCAN: ABSP – gap down at 78.50-48.0
AHI– gap down at 0.93-0.91
ATN - gap down at 3.10-3.05
FER– gap down at 1.30-1.26
GEI– gap up at 0.35-0.37
GLO - gap down at 8.25-8.20
GLOW – gap down at 6.40-6.20
EBC – gap down at 70.0-68.0
EBCW – gap down at 4.90-4.50
MBT – gap up at 162.0-163.0
PNB – gap down at 49.0-48.50
SPI – gap down at 9.0-8.70
RECENT DEVELOPMENTS
Despite the opposition of the Department of Energy (DoE) and the leading oil retailers, Congress has set the date for congress deliberations creating the National Oil Exchange Corporation.
Bank of Commerce Chair A. Cojuangco reported that preparations for the reopening of Urban Bank by October 2000 is on-track.
Ionics
Inc. announced that it has deferred plans to expand into China by a year
in order to prioritize efforts to fulfill new orders, specifically from
Royal Philips.
August 21, 2000 Monday
Investor’s keen watch over trade activity as a gauge for market confidence prompted a profit-taking mode as value turnover relatively thinned. The delay in the Mindanao hostage crisis and a region-wide cautious approach ahead of the US FOMC meeting tomorrow held back market interest.
The Phisix narrowly moved higher on early trade to +3.75pts but gradually slid to an intraday low –14.74pts as trade activity was relatively slow. Sixteen (16) index-linked stocks closed lower while three (3) index-linked stocks closed higher, namely BPC, ION and LCB. Negative factors cited by clients for inactivity or caution includes the delay in the Mindanao hostage turnover, global expectations of further oil price hike, the lack of convincing bullish corporate developments, and a deeper reassessment of market ratings given the labor group’s petition for Php75/day wage hike and the country’s rising outstanding debt stock.
Focus of market interest (most active stocks) were on TEL, BPI, ALI, MERB and MBT which altogether accounted for 53.69%.
There was a block sale of 9.38m shares of JFC at Php19 by CL. JFC’s share price did not positively react despite the huge premium of the transaction cross price to its current board price.
A surprising entry to the most active lists includes URC. A cross transaction for 3.1m shares at its current board price of Php5.20 by Merril Lynch.
Index-linked price movers were: DMC (down 13% at Php0.4), CMP (down 3.7%% at Php0.76), EBC (down 3.5% at Php70.0), and FLI (down 3.4% at Php1.70).
Focus of retail investor interest were on EBC, EBCW, BW, BELW, MACW, WEB, and V. Retail investor interest on the warrants comes from a growing belief that the SEC’s approval of the life extension of WPIW and OMW is a good precedent. Select foreign buying were noticeable in TEL, GLO, and ION.
PRICE
SCAN: BELW – gap up on open at 0.115-0.120
EBC– gap down on open at 72.50-69.0
BKD– gap down on open at 2.40-2.34
EBCW – gap down on open at 5.20-5.0
LTDI – gap down on open at 34.0-33.0
WEB – gap down on open at 0.130-0.125
RECENT DEVELOPMENTS
SEC Chairperson Lilia R. Bautista announced the likely return of PSE’s self-regulatory (SRO) status and to defer the implementation of the broker-director policy until the end of the year.
Global oil analysts expect further rise in world crude oil price. A notable US-based oil research foundation forecast a rise in world crude price to US$37/barrel from its current price of US$32/barrel.
The
Committee on Privatization (CoP) approved the bid of Ayala Land Inc. (ALI)
for the 9.92ha property inside Ft. Bonifacio. The are is primarily
intended for mixed-use development and deemed most attractive since it
will have the greatest potential people traffic as it includes the Global
City’s transport and terminal complex adjacent to the exhibit center, a
convention center, a shopping mall and the central parking facility.
August 18, 2000 Friday
Shares rose on follow-through buying interest marked by increased market activity amid encouraging news of likely active market participation of government financial institutions and a significant breakthrough to end the Mindanao hostage crisis.
The Phisix closed on a 1month record high as gainers swamped decliners 73:18. Value turnover was relatively hefty at Php1.2b with a Php317m transaction cross on CYBR. The usual profit-taking mode experienced every Friday were subdued as index-linked stocks were mostly higher with 15 gainers, 6 decliners and 12 unchanged issues. Focus of trade (most active) were on CYBR, TEL, MERB, and EBCW which accounted for 56% of total market turnover. CYBR and TEL accounted for 26.98% and 16.98% of total market turnover, respectively.
Index-lined movers were CMP (up 17% at Php0.27), LC (up 7.4% at Php0.29), FDC (up 4.8% at Php1.30), and DMC (up 4.4% at Php0.47).
Surprisingly increased buying activity was noted on Philweb Inc. (WEB) whose turnover was more than three times its average turnover for the past month and was the 5th most active stock accounting for 3.8%. WEB closed 23% higher at Php0.13 – a month record high. Local investor preference also swooped into the warrants (WPIW and, BELW) given the encouraging rise of EBCW and the likely life extension to be granted on OMW.
Major gainers were: EBCW (up 92.6% at Php5.2), WPIW (up 44% at Php0.165), AJO (up 33% at Php1.46) and BELW (up 31.4% at Php0.115).
PRICE
SCAN: ABSP – gap up on open for the 2nd consecutive day at
48.0-49.0
FPH – gap up on open for the 2nd consecutive day at 20.25-20.50
ATN – gap up on open at 3.05-3.10
EBC – gap up on open at 72-73
FPH – gap up on open at 20.25-20.50
JFC – gap up on open at 11.75-12.0
PNB – gap up on open at 48.50-49.0
SMPH – gap up on open at 5.20-5.3
Anticipated
events/news developments next week: a) PSE’s approval on the
life extension on OMW, b) preliminary feelers from FBCDA on the bid proposals
of SMIC and MPC, c) BW’s financial data (FY1999 and 1H2000) release during
its stockholders meeting, d) SEC and PSE’s response on investor pressures
to get EBC to comment on the target sale to a foreign regional banking
institution, e) Globe and Smart’s response to the NTC and DTI’s recommendation
for the firms to restrain from getting new subscribers until capacity and
service delivery is improved, and f) the government’s release of the privatization
timetable for PNCC.
RECENT DEVELOPMENTS
Philweb Inc. (WEB) reportedly pooled a preferred group of stockbrokers with notably significant shareholdings for a company briefing recently. Highlights of the briefing was not readily available but rumors point to corporate updates showing an expanded Cybercafe network target, full marketing re-launch for individual and corporate accounts given the forthcoming delivery of internet ready IBM computer units under its installment program, and new partnerships for content delivery. Insider reports also indicate renewed briefing with CFSB for a $20-$30m investment in one of its program. WEB closed 23% higher at Php0.13.
Ionics Inc. (ION) is committed to bid for nearly a $500m contract with Israeli ECI Telecom. This is separate from a $150m contract secured with Israeli ECI Telecom announced the other day. Since Ionics has a 100% track record on getting reorders, foreign buying interest has been successfully generated anew as revenue flow for yr2002 becomes more certain. Company officials also hinted of the breakeven potential of non-profitable subsidiaries makes the locally listed shares relatively more cheaper than Ionic EMS which is listed in Singapore. Ionics will provide details in its upcoming corporate briefing next week.
August 17, 2000 Thursday
Outlook of increased market activity and news of the likely end of the hostage crisis were more than enough to lift the Phisix to positive territory throughout the trading session and close to a 20-day high. The country’s Finance go signal for the GSIS and SSS increased participation in market was welcomed with increased participation by local investors as it meant a buying support which will partly ease overall market fears. Considering the market’s lingering ecopolitical concerns, such buying support will theoretically limit price volatility specially on bearish trends. Likewise, increased trade activity or stock liquidity will slightly encourage foreign investor participation.
Today’s xpected release of local and foreign hostages in Mindanao by extremist forces failed according to latest news. Albeit a cliff-hanger at current stage, hopes are high for the near-end of the hostage crisis which will improve general perception on country’s peace and order situation.
Trade activity significantly increased to Php1.24b from Php785m yesterday. All sectors except for the mining sector gained as three (3) issues gained for every decliner. Index-linked stocks were broadly higher with 16 gainers, 2 decliners and 15 unchanged issues. Only JFC and LTDI registered a price decline.
Focus of trade (most active) were on EBC, TEL, MERB, and MBT which accounted for 69.1% of total market turnover. EBC and TEL accounted for 35.8% and 20.8%, respectively.
Index-lined movers were EBC (up 9.9% at Php72.0), FLI (up 6.% at Php1.76), DGTL (up 6% at Php0.71), BPC (up 3.9% at Php4.0), JGS (up 3.6% at Php2.90) and AC (up 2.9% at Php7.1).
Other
major movers were: OMW (up 33% at Php0.004) and EBCW (up 28.6% at Php2.7).
Surprising increased activity and price gain were on BPC, CHTR and ALI.
PRICE
SCAN: GLO – intraday high at 17.0 is a 6-month
high
SPI – gap up on open at 9.10-9.20; intraday high at 9.5 is a 10week record
high
EBC – gap up on open at 65.50-68.50; close at 72 is a 6month record high
EBCW – gap up on open at 2.10-2.20
FLI – gap up on open at 1.66-1.68
BPC – gap up on open at 3.85-3.90
GLOW – gap up on open at 3.85-3.90
MUSX – gap up on open at 5.0-5.10
FPH – gap up on open at 20.0-20.25
GEI – gap up on open at 0.30-0.31
TEL – gap up on open at 685-690
ABSP – gap up on open at 46.5-47.50
RECENT DEVELOPMENTS
The National Telecommunications Commission (NTC) is mulling imposing fines to Smart and Globe based on widespread consumer service failure. The Department of Trade and Industry (DTI) is considering imposing an advertising ban on Smart and Globe until services are improved.
Key
highlights of Globe Telecoms 2Q2000 investor briefing:
a)
strategic thrust moves towards profitability vs market growth – preferential
promotion goes to post-paid as this provides higher average revenue per
unit (ARPU); additional mobile subscribers are likely from the low-income
bracket which is distinctively low revenue and very vulnerable to economic
difficulties ; ARPU is therefore bias to decline until new services gain
competence; subscriber growth will also taper down
b)
Prepaid problem tagged as the 222/223 problem has been corrected
c)
2Q2000 expenses includes a Php272m write-off from receivables from Pacific
Gateway Exchange (PGE) which filed for insolvency in the US – such provision
is 100% and they are restricting further connections with PGE so there
will be no further write-offs in the succeeding quarters
d)
Data services to be promoted and enhanced with further tie-ups – to expand
its market and revenue base
e)
Reverse stock split rationale is based on the company’s forward looking
plans to keep price of preferred shares narrower to the common shares
f)
PDR issuance is targeted this year but still dependent on market conditions
g)
On NTC issues:
a) proposed extended life of prepaid cards – Globe still is opposing such
move and explaining the
cost side of maintaining prepaid subscribers;
b) move towards pulse charging – unlikely to be fulfilled since interconnection
charges should likewise be moved to pulse charging which will take considerable
time;
c) Islacom’s non-compliance on fixed line installation quota – still under
debate but Globe maintains its position that it was able to attain the
quota and will support further fixed line growth
h) Churn rate: increased to 1.3% in 2Q from 1.2% in 1Q for postpaid; while
prepaid increased to 1.4% in 2Q from 1.1% in 1Q
i) Capex of $1b – clarified as an 18-month estimate but dependent on subscriber
growth; $600m is definite for the next 6months
j) Competition outlook given new licenses granted to Bayantel and Digitel:
welcomed but consensus is concerning since the market has been highly penetrated
and it takes considerable time to develop products, market and systems.
SPI Technologies reportedly secured a $5m contruct for online content conversion project for Elseviere Science of Netherland. Company profit performance was not reported in yesterday’s briefing although indications show lower than 1Q2000 profits. Optimism on new service contracts are high as company officials indicate two(2) definite contracts before end-September, six (6) are ongoing discussions and about thirty (30) proposals are at hand and for preliminary review.
Steniel Manufacturing (STN) reported a 2Q2000 profit of Php14m, a considerable turnaround from a Php7m loss registered in 1Q2000. (Financial details remains to be reviewed)
August 16, 2000 Wednesday
Cautious mood of investors given indicative pressure on the peso and interest rates due to the wider than target budget deficit kept the index sideways. Economic outlook based on today’s reported 3rd consecutive decline in export growth and the headline news of the peso’s lingering weakness heightened the gloom scenario of the economy. The country’s export growth in July declined 6.6%, an indicative worrisome momentum from declines of 3.8% last May and 2.8% last April. Adding further to investor worries comes from an ongoing review for a wage hike.
Trade activity declined to Php785m from Php1.4bn yesterday given the absence of significant transaction crosses. Share prices were mixed with 36 gainers, 38 decliners and 45 unchanged stocks. Among index-linked issues, gainers outnumbered decliners 9:6 with 18 unchanged issues. Focus of trade (most active) were on BPI, TEL, GLO and MERB which accounted for 55.25% of total market turnover.
Investor interest were on GLO (up Php0.75 at Php16.50), ION (up Php0.50 at Php13.5), EBC (up Php1 at 65.5) and V(up Php0.02 at Php1.64). GLO gained investor favor on rumored steady rise in revenue and profit growth momentum in July and ahead of the stocks declassification and reverse stock split effective August 24 (but reduced in its trading price effective August 18th). ION gained with a 179% increase in its 2Q2000 profit at Php74m and on stronger profit outlook for 2H2000 and onwards due to higher order contracts. EBC’s share price uptrend continues as expectation for the block sale to a strategic regional partner rumored to be transacted before the end of the month is significantly higher (at least Php80) than its current share price. Vantage or V however gained on selective bargain-hunting and on speculation of I-Bank’s potential sale.
PLDT announced the continued partnership of ePLDT with Microsoft in building a local portal for free email. The Company also dismissed market rumors that it is eyeing to purchase Philcom. PLDT’s official statement cited no ongoing discussions with Philcom. PLDT lost Php10 at Php685.0
RECENT DEVELOPMENTS
EEI Corporation announced its first half earnings at Php70m
Major business dailies attributed the Php529m transaction cross on CYBR on the increased stake of Ramon Ang. Such development widely increased speculations that Ramon Ang’s investment is really for E. Cojuangco since the former is the right hand man of the latter.
August 15, 2000 Tuesday
Regional market gains (Dow up1.3% and Nasdaq up 1.6%) overwhelmed domestic concerns over budget concerns pushed the Phisix higher marked by all sectors closing higher. Selective trade interest continued: EBC (+6.6%)/EBCW(+10%) gained on optimism that the forthcoming 10% to 30% block sale to a strategic regional foreign partner will improve management, banking network and possibly a share price appreciation prior to the block transaction sale; GLO’s (+3.2%) improved profitability and other telco’s (such as PLDT) reduced earning resultingly prompted investors to reconsider a beneficiary shift; while BPI (+.8%) and AC (+1.5%) gained on value based bargain-hunting.
Trade activity significantly increased to Php1.412b from Php494.573m the previous trade day on account of huge cross transactions on CYBR and EBC which accounted for a combined 65% of total market value turnover.
Gainers outnumbered decliners 43:26 with 42 unchanged issues.
Pacemco Holdings Inc. (PHI), formerly Pacific Cement Company, informed the PSE that it bought into a technology company which is likely to be merged with Nextstage Inc. which is into smartcard business, and the development of web and mobile software solutions. (PHI was not traded today)
BPC reported a 6-month profit of Php55m. Until further details are released, such measly gain was largely anticipated to be attributed to its huge operating and debt-service costs of Bayantel. The profit loss of Bayantel was significant to wipe-out the profit contribution of its media/industrial/power affiliates which normally accounts for 65% of total earnings. (BPC was unchanged at Php3.85)
Other corporate earnings released : RLCB - 1H2000 profits at Php636.8m, ATI – 1H2000 profits at Php233m, DGTL – 1H2000 at Php2.342m, ELI – 1H2000 at Php101.1m, and EBC – 1H2000 at Php720.3m. (Comparative details and review will follow)
RECENT DEVELOPMENTS
MeetChina.Com, one of Ayala Corporation’s new investment, has announced the delay of its Nasdaq listing initially scheduled this September2000. (AC was up Php0.1 at Php6.90)
SPI
Technologies Inc. (SPI) is likely to report 2Q2000 profits that is lower
than recorded in 1Q200. Although a bit worrisome, SPI is set to announce
in its investor briefing tomorrow an expanded list of major contracts from
Europe and US. (SPI gained Php0.50 at Php8.90)
August 14, 2000 Monday
Profit-taking mode extended as investor focus turns mixed to bearish as not one of the late corporate earnings report released since Friday from Ayala Corporation, SM Prime, ABS-CBN and PCI Leasing offered some profit growth surprises. The market’s minor pullback is technically welcomed after setting a 13day record high last Friday.
Market fears included another round of an oil price hike this week. Key resource persons from the major oil retailers however denied any programmed oil price increase this week as the current global oil price does not warrant a hike.
Trade activity amounted to Php494.573m, a marginal increase from Php490.61m last Friday and approximately at par with last week’s average daily turnover at Php495m. Focus of trade activity (most active stocks) were on BPI, TEL, AC, ABSP, SMCB, SMC and SLC which altogether accounted for 55.99% of total market turnover. BPI and TEL were the top trade issues which accounted for 14.14% and 12.2%, respectively. It is the second consecutive trading session that BPI and TEL led the list of actively traded stocks. Although TEL is always among the top 5 actively traded stock, we are surprised over BPI’s increased trade activity on a consistently lower share price.
Most
of the sectors except the oil sector closed lower. Losers outnumbered
gainers 42:29 with 38 unchanged issues. Only 4 index-linked issues managed
to post gains, namely AC, JFC, ICT and CMP.
Major
index movers were LND (-16.1%), PNB (-6.1%), DGTL (-4.2%), PCOR (-3.1%)
and MPC (-3.03%).
Selective buying interest went to JFC, (up 4.3% at Php12), SPI (up 7.7% at Php8.4) and UW (up 6.7% at Php0.48). News reports citing legal foreign ownership on JFC based on the completed legislative guidelines of the recently approved retail trade law fueled domestic buying. On the other hand, SPI’s scheduled investor briefing on Wednesday August 16th fueled speculations of possible new corporate contract announcement. UW gained investor interest on optimism on the proposed rehabilitation program after the company announced that BPI signed its debt restructuring program.
San Miguel Corporation (SMC) denied any plans to purchase 70% of Coca-Cola Bottling Corporation of the Philippines Inc. (CCBPI) from CC-Amatil or even the CCA’s business in Indonesia. SMC clarified that there are not proposals to either CC-Amatil or CCBPI regarding such matter. (SMC and SMCB closed unchanged at Php50.50 and Php54.50, respectively)
Uniwide
Holdings Inc. (UW) announced to the PSE that BPI has inked its approval
for the debt restructuring package this morning which effectively brings
the creditors approval to five (5). Negotiations with other creditors are
ongoing but BPI’s approval is deemed likely to fast-track the approval
of the remaining creditors. (UW gained 6.7% at Php0.48)
August 11, 2000 Friday
With PLDT’s disappointing 2Q2000 corporate earnings behind, general investor sentiment relatively stabilized with minor optimism as the feared wave of sell-offs faded. Trade activity declined to Php490.61m from Php788.357m yesterday. Unlike the previous days, there were no significant transaction crosses.
Focus of trade activity (most active stocks) largely concentrated on TEL, BPI, SLC and SMPH which altogether accounted for 52.7% of total market turnover. Investor reaction after PLDT’s corporate briefing yesterday was unusually passive despite the disappointing results, and combined with the noticeably heavy buy postings on PLDT buoyed overall market enthusiasm. Such improved outlook partly supports the market’s hope that the worst is over and a new season of accelerating growth lies. Investor action on market timing are now keenly reassessing selective corporate plays where value has yet to be discounted. One such beneficiary is SMPH which gained Php0.30 to Php5.30 on rumors of stronger than expected 2Q2000 profits and a positive outlook towards winning its bid for the commercial site in Ft. Bonifacio.
The C-I and Property sector kept the Phisix up although only 6 index-linked issues posted gains. These were SMPH (up 6%), TEL (+1.4%), ALI (up 1.92%), JGS (up 1.8%), PNB (up 2.1%) and MERB (up 0.8%). The Phisix is now on a 13day record high.
There were no spectacular flyers today. Major index decliners were CMP (-8.5% at Php0.215), DMC (-4.6% at Php0.42), AEV (-3.9% at Php1.50) and MEG (-2.5%) at Php0.79. CMP declined on continued profit-taking and on growing realization that despite the debt restructuring deal, its recovery will take considerable time. Speculation on DMC’s newfound growth program was baseless as DMC has yet to announce new corporate programs to shave-off revenue declines given the property sector slump.
Next week’s global market outlook remains stable as nearly 80% of corporate earnings reports have been released and activity will be less intense until the FOMC meeting on August 22nd. Key US economic data release (US Consumer credit on Monday and July CPI on Friday) is expected to add credence of a soft economic landing which will restrict the FED to impose another rate hike.
RECENT DEVELOPMENTS
Metro Pacific Corporation (MPC) countered a corporate news release of SMIC which allegedly cited MPC’s inferior bid for the 8.5ha Ft. Bonifacio property.
RFM Corporation confirmed initial plans with SMC for a potential bid to acquire Purefoods Corporation. Ayala Corporation denied receiving any formal bid to purchase Purefoods. SMC also informed the PSE there is no definite agreement yet for the planned purchase of Purefoods.
PLDT Briefing Highlights: Aside from the financial reports for 2Q200, other important notes are as follows: a) Smart is likely to be in the black for 2H2000 which will result to a strong 2H2000 consolidated performance, b) PLTL will further book significant losses in 2H2000 which will include the cost of a retrenchment program estimated to reach Php1b., and c) higher call volumes failed to offset long distance rate cuts. Other issues: a) PLDT officials opted not to comment on the planned sale of First Pacific, b) the decision towards PLDT’s rights of first refusal on ETPI has yet to be finalized, and c) impact of its aggressive marketing and advertising campaign will gradually be felt in 4Q2000.
PRICE
SCAN: SPI – gap up at 7.60-7.80
UW – gap up at 0.44-0.45
PSB – gap up at 28-29.5
SMPH – gap up on open at 5.0-5.20
CMP – gap down on open at 0.235-0.225
V – gap down on open at 1.64/1.62; closed at 1.58
EVER – gap up at 0.0625-0.07
August 10, 2000 Thursday
Trade activity improved further with today’s value turnover at Php788.357m from Php649.352 yesterday. Investor preference towards a wait-and-see attitude prior to PLDT’s 2Q2000 earnings release finally eased as PLDT’s worst financial quarter turnout was well within market expectation and did not trigger a new wave of sell-off. Another significant factor to the market’s increased activity is a 4m share transaction cross on SMC which propelled SMC to account for 30% of total trade turnover.
Focus of trade activity (most active stocks) were on SMCB, BPI, TEL, MERB and EBC. Gainers outnumbered decliners 34:27 while there were 47 unchanged issues. Among index-linked issues, there were 15 gainers, 5 decliners and 3 unchanged issues. Major index-linked gainers were EBC (up 6.7% at Php63.50), AEV (up 5.5% at Php1.54), MPC (up 4.8% at Php0.66) and DMC (up 4.8% at Php0.44).
EBC continue to gain investor interest on expectations that the targeted sale of 10% to 30% stake of the Bank to a foreign partner is way above the current market price (rumored at least above Php80/share). EBC gained despite denial from Chinatrust Bank that it is the likely new partner of EBC. Chinatrust Philippine representative gave the denial while EBC officials remain mum on the development. Unconfirmed reports point to SSS and GSIS combined stake of 17% will be part of the block sale. EBC gained 6.7% to Php63.50.
RECENT DEVELOPMENTS
Ajonet (AJO) informed the PSE that it will invest in Handson Network Inc. – a California based content management solution provider. Handson is on a pre-operating stage with launch date targetted this September 2000. (Rated Speculative Buy)
Digital Telecommunications (Digitel) was granted the country’s 7th mobile phone operator license. (see August 9th review) DGTL gained Php0.02 at Php0.72. (rated Trading Buy)
PSBank reported net earnings of Php45m for 2Q2000, a 6.5% decline yoy. This translates to an improvement from 1Q2000 profit decline. PSB closed unchanged at Php28.0. (rated Long Term Buy)
PNB reportedly lost Php513m in 2Q2000 from a profit of Php4.03m in the same period the past year. This translates to a significant reduction in losses of Php933m in the first quarter. Such improvement draws support on PNB’s management claim of a likely marginal profit by end-2000. PNB closed lower at Php48. (Rated Trading Buy)
Piltel reported a net loss of Php1.52b in 2Q2000. This translates to a further increase from a net loss of Php1.2b in 1Q2000. Piltel’s losses is attributed to lower revenues and huge debt service cost from its outstanding debt of Php35b. (No trades were transacted on PLTL – last transacted price at Php0.89 but posted sellers at Php0.88). (Rated Avoid, GLO and PLDT is preferred)
San
Miguel Corporation (SMC) announced its key interest to purchase Swift Foods
Inc. and Purefoods. SMC Vice Chair Ramon Ang reportedly announced
that negotiations are ongoing but singled out Ayala Corp’s offer of Php10b
for Purefoods is quite pricey and its bid is somewhere near Php7b.
SMC is rated a BUY given its huge cash horde, above market growth tract,
and its buying frenzy for strategic businesses. SMC’s interest in
SFI and PFC is indeed within its business model and its marketing network
solution for the decade is deemed viable for these new food-related interests.
(SMC is rated BUY). For Ayala Corporation, the parent firm of PFC, the
sale is deemed positive: a) rumored sale price is high, b) added
cash flows enhances its interim value and investment capacity, and c) PFC
– albeit profitable, stable and an established brand is its only foray
in the food sector. (AC is a rated BUY – see August 8th review)
August 9, 2000 Wednesday
Trade activity significantly improved to Php649.352, 44% higher than yesterday’s total value turnover of Php457.741. Higher trade activity is attributed to: 1) a return to status quo notice from the PSE until guidelines on proprietary trade restrictions are released, and 2) buying interest on EBC (which accounted for approximately 27% of total turnover) on optimism for further share price gains given the target sale to a foreign partner.
The Phisix steadily gained to close at its high for the day on spillover market interest from the Dow’s record 7day upmove. Global markets will find relief on growing confidence that the US Fed will not raise key interest rates this August 22nd meeting as recent US data released reflected increased labor productivity on lower labor cost.
The peso was relatively stable at Php44.85/USD from yesterday’s close at Php44.875/USD.
All sectors registered gains which lifted the Phisix to a 10day record high. Focus of trade activity (most active stocks) were on EBC, BPI, MERB, TEL and SMCB which altogether accounted for 64% of total market turnover. Gainers swamped decliners 55:22 while there were 35 unchanged issues. Among index-linked issues, there were 19 gainers, 6 decliners and 8 unchanged issues. Major index-linked gainers were EBC (up Php8 to Php59.50), SMPH (up Php0.15 to Php5.10), TEL (up Php5.0 at Php695), SMCB (up Php1.0 at Php53.5) and BPC (up Php0.15 at Php3.85).
Major movers with relatively significant trade activity were: EBCW (up 24%), EBC (up 9.7%), GEI (up 15.5%), GEI (up 10%), WEB (up 10%), and V (up 9.7%). EBC and EBCW gained on strong buying activity on expectations that the targeted sale of 10% to 30% stake of the Bank to a foreign partner is way above the current market price. Rumors point to a likely sale above Php80/share. Bargain-hunting spilled to the small cap new economy issues such as GEI, WEB and V which were all heavily sold down for the past weeks.
PRICE
SCAN: ABSP – gap up at 47.50/48.00
WEB – broke a 6day consolidation at 0.11
MERB – gap up 61/61.50; set an 18day record high at 62.50
EBC – intraday high is a record 15week high
RECENT DEVELOPMENTS
BW released its agenda for its August 8 special stockholders meeting which includes: a) the approval of its FY1999 financial statements, b) the amendment of its article of incorporation to change its business name to Fairmont Holdings Inc. and its secondary business purpose of e-commerce business, c) the increase in capital to Php8billion and d) a move to mortgage the title of its Sheraton Marina property.
SM Prime Holdings Inc. (SMPH) reportedly announced its deliberate move to delay the opening of its Cebu Hotel given the current oversupply in hotel rooms.
APC
clarified that does not fully intend to sell its stake in Philcom but rather
they prefer to get a strategic partner.
August 8, 2000 Tuesday
The
alarming drop in trade activity yesterday further stressed the decline
in overall investor interest. Hints of lower key domestic interest
rates and the US market's overnight gain (Dow was up 0.92% and 2% for Nasdaq)
failed to stir
activity
as investor reluctance intensified in absence of market incentives.
Lower share prices and the steady decline in market turnover can critically
damage foreign institutional investor interest at the Philippine market
as effective liquidity decline beyond fund exposure standards.
Trade activity relatively improved by 49.5% to Php457.741m from a record setting low of Php306.239m yesterday. However, excluding the transaction cross on SMCB worth Php169m and Php4.3m on CHIB, net turnover remains alarmingly low.
Central
Bank's memorandum for banks on the revised formula for the reserve requirements
will expectedly free 1-3% of liquidity estimated around Php52b.
CB wants the banks to increase its loan exposure while effectively reducing
key
interest
rates.
Mixed results of the T-bill auction failed to be a benchmark of recovery for the equities market. The 91day tenors inched lower at 8.924% from 8.925%; the 182day low was unchanged at 10%, while the 364day tenor increased from 11.176% to 11.242%.
Despite relative regional currency firmness, the peso slightly declined anew to Php44.96/USD in today's morning trade activity from yesterday's close at Php44.845/USD.
Real trade activity was much lower since there was a Php30m cross transaction on PGMC at Php20/share. This effectively lower the trade turnover to Php276.239m, a 37% drop from Php436.96m last Friday. Profit-taking resulted to higher number of stock decliners at 46, gainers were 20 and 44 unchanged stocks.
Trade
focus (most active stocks) were again highly concentrated on SMCB, TEL,
BPC and MBT which altogether accounted for 65.5% of total market turnover.
SMCB and TEL accounted for 37.77% and 14.26% of the total market turnover.
Again, only 4 index-lined stocks managed to post gains, namely TEL,
EBC, LTDI, and
AEV.
Top index decliners were SMPH(-6.6%), CMP (-6.5%), BPC (-6.3%), ICT(-3.85%)
and MPC (-3.1%).
Several
business dailies highlighted the Belle Corporation's planned divestment
of non-core assets which includes the possible sale of Philcom. Such
news was not a surprise as this has long been announced under Belle's restructuring
program.
GSIS, SSS and SMIC both maintained one board seat representative.
(BEL was unchanged at Php0.97)
Ayala
Corporation (AC) disclosed its investment in MeetChina.com, a provider
of online door to door solution for buyers around the world to procure
products from China. Funding will be used to develop on-line negotiation
tools. Our initial scan show MeetChina.com has yet to operate and
AC's investment is unlikely for immediate benefit. MeetChina.com
is not listed but its programmed listing in HK or China will fuel windfall
gains in the future. (AC closed
unchanged
at Php6.60)
PRICE SCAN: ICT - posted an intraday record low Php0.99
August 7, 2000 Monday
Trade activity dropped to a record low of Php306.239m, as investor's herd characteristic found no leaders to follow and hopes faded for a follow-through buying activity from last week's indicative market rally.
News
of government efforts to curtail the country's ballooning deficit to lower
levels failed to stir interest as market watchers see the odds favoring
higher than target budget deficit numbers. The peso slightly dropped
to Php44.73/USD
in
today's morning trade activity from Friday's close at Php44.63/USD.
Real trade activity was much lower since there was a Php30m cross transaction on PGMC at Php20/share. This effectively lower the trade turnover to Php276.239m, a 37% drop from Php436.96m last Friday. Profit-taking resulted to higher number of stock decliners at 46, gainers were 20 and 44 unchanged stocks.
Trade focus (most active stocks) were heavily concentrated on SMCB, MERB, TEL, PGMC, and MBT which altogether accounted for 62.2% of total market turnover. SMCB and MERB accounted for 17.3% and 14.7% of the total market turnover. Only 4 index-lined stocks managed to post gains, namely ABS, TEL, SMCB and AEV. Top index decliners were CMT (-9.4%), CMP (-8%), FDC (-4.6%), MPC(-4.5%) and DGTL (-4.4%).
PSE announced the lifting of suspension of trade on MED.
Waterfront
Phils. Inc. (WPI) reported the following board resolution: 1) Mr.
W. T. Gatchalian was re-elected as director to serve until the next annual
meeting, 2) the next annual stockholders meeting will be on September 30,
2000
and
has set September 11,2000 as the record date for stockholders entitled
to vote, and the 3) approval of its 25% investment in Wellex Industries,
Inc. (WIN).
PRICE
SCAN: CMT - low at 0.29 is a 25-month record
DGTL - gap down at 0.66-0.68
August 4, 2000 Friday
The release of the country's July CPI at 4.2% fell within market expectation. Investors find inflation relatively benign to fuel a change in the country's fiscal policy or a move towards higher interest rates. Favorable CPI data, the impasse of 2Q corporate earnings disappointments and the notably less aggressive foreign-sell order flows fueled the technical bounce to extend further.
The peso added to optimism as it gained further to Php 44.59/USD fromyesterday's close at Php44.685/USD.
Trade activity increased to Php521.82m from yesterday's ex-MVC cross total trade turnover of Php436.96m. Gainers continued to outnumber losers 49:25 with 42 unchanged stocks. All sectors excluding finance and the mining sector posted gains.
Trade focus (most active stocks) were heavily concentrated on MERB, TEL, BPI, and SMPH which altogether accounted for 55.6% of total market turnover. MERB and TEL accounted for 17% and 15.7% of the market turnover. Only 3 index-lined stocks decline, namely TEL, JGS and PNB. Top index gainers were ALI, SMP and MER. Best gainers among index-linked stocks were CMP (+19%), MPC (+6.4%), FLI (+6.25%), ALI(+5.9%) and SMPH (+5.9%).
News
of a potential foreign investor entry in CMP Homes (CMP) after the
finalization of its restructuring program restored buying interest.
CMP closed at Php0.25 to register a 31.6% gain since the restructuring
deal was confirmed
yesterday
morning.
PSE announced the suspension of trade due to non-compliance of reportorial requirements on RPC, WHI, MON and MED. Lifting of suspension warning was granted to URDI, SCC and MRC given its compliance to requirements with the PSE.
PLDT and Benpres Corporation informed the PSE that the news article citing PLDT's bid to buy Bayantel is baseless. PLDT is not in discussion with the Lopez Group for the acquisition of Bayantel, while BPC reported that no inquiries have been received nor are any audit related to a probable sale is ongoing.
PRICE
SCAN: SMPH - on 3day upmove to set a 14day high at 5.40
AC - intraday high at 6.70 is an 11day high
CMP - set an 6week record high at 0.25
FLI - 3day upmove to an intraday high at 1.72 is a 9day record high
August 3, 2000
Thursday
Observed net buying from some big foreign brokers resulted to some follow through buying on hopes that bulk of the corporate earnings disappointments has been factored into the market. The notably less aggressive selling pressure from yesterday was taken as a short-term cue of the market's potential rebound. As we have indicated yesterday, lower trade turnover on a bearish trend partly excites investors as it may translate to the tailend of foreign selling.
IMF's
will for the National Government to tighten its budget deficit and retain
its fiscal program targets has yet to be absorbed by the market. Such pressure
from the IMF may be near-term bearish to the equity market as it will rekindle
a
rise
in key domestic rates given the need to source more funds domestically
to finance its deficit.
The peso was relatively firm as it improved from Php 44.79/USD yesterday to Php44.77/USD during the morning trade activity.
Trade activity was relatively higher at Php533.69m from Php413.38m yesterday. DBS transacted a cross on MVC for 178.8m shares at Php0.54 to lead most active stocks and accounted for 18.1% of total market trade turnover. Excluding MVC, trade activity reflected a marginal increase of 5.7% at Php436.96m. Gainers outnumber losers 60:25 with 34 unchanged stocks. All sectors excluding the oil sector posted gains. The closure of the Wildebeest (Sulu Sea) exploration sent share prices of select oil participants lower.
Trade focus (most active stocks excluding MVC) were ABSP, SMCB TEL, MERB, MBT, BPI, BW and AC. ABSP and SMCB accounted for 12.9% and 11.6% of the market's net turnover (ex-MVC). Among index-lined stocks, only SMC registered a decline while there were 26 gainers and 6 unchanged issues. Top percentage gainers among active index-linked stocks were CMP (+10.5%), DMC (+7.5%), MERB (+5.2%), SMPH (+5.2%) and MPC (+5.0%).
Creditors of CMP Homes (CMP) approved the proposed restructuring program for its Php7.8b debt. Preliminary reports indicate that Php3b of the debt will be converted to equity while the Php4.8b balance will be restructured in 7 yrs atan interest rate of 4.25% to 5.5%. (CMP gained Php0.02 to Php0.21)
Domestic speculation play were on CMP, MERB, SMPH, DMC, FLI, FDC and MPC.
PSE announced the change in par value of Centro Escolar University (CEU) from Php100 to Php1.0
Ionics Circuits Inc. changed its corporate name to Ionics Inc. but the trading symbol of ION will remain unchanged.
Waterfront Phils. Inc. (WPI) issued a clarifying note to the PSE citing news reports of its ongoing talks with a foreign gaming and hotel investor-partner are merely preliminary and exploratory. WPI gained Php0.03 to Php0.53.
PRICE
SCAN: MPC - opened with a gap up at 0.60/0.62
MERB - opened with a gap up at 57.50/58.50
MER - opened with a gap up at 57/57.50
BW - opened with a gap up at 4.20/4.40
TEL - opened with a gap up at 680/690
FLI - opened with a gap up at 1.54/1.56
CMP - opened with a gap up at 0.19/0.20
WPI - opened with a gap up at 0.50/0.53
August 2, 2000
Wednesday
Selective bargain-hunting enabled the Phisix to slightly recover. The peso's marginal gain (at Php44.73/USD in morning trade from Php44.86/USD) and regional market gains (Dow was up 0.81% and HSI up 1.69% by midday) partially eased selling pressures. The Phisix narrowly traded at its intraday range of -4.80pts/+3.19pts as selling momentum notably eased and triggered minor interest for investors as they continue to reassess the risk given the current attractive prices.
Trade
activity however dropped to Php413.38m from Php544.205m yesterday. Lower
turnover on such a bearish trend partly excites investors as it may translate
to the tailend of foreign selling. Investors are now keen to re-evaluate
the
investment
market in search for possible recovery signals. The marginal gain
of the Phisix is attributed to the recovery of the C-I and the property
sector which gained 0.14% and 0.16%, respectively. The number of
gainers significantly
increased,
narrowing its ratio against decliners to 32:36 with 51 unchanged stocks.
Trade
focus (most active stocks) were on TEL, BPI, EBC, BW, SMCB, MBT,
and ALI which altogether accounted for 54.7% of total market turnover.
TEL and BPI accounted for 13.5% and 9.1% of the market's net turnover.
Gainers (9)
outnumbered
losers (8) for index-linked stocks. Index-linked heavyweights that gained
were AC, SMPH, PNB, MBT, PCOR, FLI, and ION which partly reflects
minor foreign buying. Decliners were ALI, ABS, JGS, MER and LTDI
but trade activity (except for ALI) among the decliners were relatively
low. Top percentage gainers among active index-linked stocks were
DMC (+5.3%), PNB (+4.2%), FLI (+2.7%) and SMPH (+2.1%).
Net foreign selling were observed on TEL, BPI, EBC, and ALI. Selective foreign buying emerged in AC and SMCB. Huge sell postings in SMPH and PNB the past days were not evident today.
Domestic focus were on OM, OMW, BW, and ION.
The Listing Committee of the PSE announced its approval to grant Omico Corporation its request to extend the life of Omico warrant from August 17, 2000 to June 30, 2002 but subject to PSE Board and SEC's approval. OMW and OM gained 50% and 23%, respectively.
PRICE
SCAN: ALI - low at 4.95 was a 2month low
BPI - low at 60.0 is a new 22month low
AHI - gap down at 0.90; retested record low at 0.90 set 7/27
PNB - on a 3day high at 50.0 after posting a low at 41
OM - on an 11day high; closed the price gap at 0.0080
OMW - on a 19day high at 0.0042
August 1, 2000 Tuesday
Skittish
market with overhelming bearish sentiment continues to drive share prices
lower. The market shrugged-off the peso's mild recovery to Php44.72
during the morning trade session from Monday's close at Php44.835/USD.
Key
market
fears is the observed net selling of major foreign brokers which keeps
buyers sidelined until the downtrend pattern bottoms-out.
The sell-off trend on gradual rise in trade activity continued with value turnover at Php543m from net trade turnover (ex-cross transaction) of Php408.4m the previous day.
The
Phisix continued to test lower levels at its intraday range of +2.09pts
/-10.26pts. Decliners still outpaced gainers 53:18 with 47 unchanged stocks.
Trade focus (most active stocks) were on TEL, ABSP, MERB, EBC, MBT, JGS
and BPI.
TEL
accounted for 24.97% of total turnover. The market's overall weakness
reflects a selective positioning among blue-chip issues which resulted
to 6 gainers, 14 decliners and 13 unchanged stocks. Index-linked heavyweights
that
gained
were TEL, MPC, PNB, DGTL, LND and BEL. Decliners were MBT, SMPH, JGS, ABS,
MER, BPC and MERB. Top percentage decliners among index-linked stocks were
ICT (-5.4%), JGS (-5.2%), FLI (-2.6%) and CMP (-2.6%).
Net foreign selling were observed on FLI, BPC, SMPH, MERB, BPI, and ABSP.
PRICE
SCAN: BPI - low at 63.0 is a new 22month low
MERB - low at 57.0 is a 9week low
GEI - 15week low set at 0.29
JGS - gap down at 2.85/2.90; low at 2.75 is a 14month low
BW - low at 4.05 is a 10week low
SGI - low at 0.90 is a one year low
FLI - gap down on open at 1.54/1.52; low at 1.48 is a 7week low
LATE
NEWS: 7 Year Tnote yield at 14.25% from 14.0% last July 11th