Listed companies going into IT-related businesses

First were the so-called "Erap stocks." Then the gaming stocks took over. Now, internet-related stocks are getting into the act. But will they click?

Aiming to cash in on the popularity and tremendous potential of the internet, a number of publicly-listed firms are restructuring their businesses to include ventures in information technology (IT).

Among those that have reportedly jumped on the internet bandwagon are imperial Resources and South Seas Natural Resources, two rarely traded stocks in the mining and oil sectors.

Acoje Holdings Inc., an oil exploration company that became an investment holding firm in early 1996, also said it intends to "go into other investments that will be focused on high technology firms, or those engaging or planning to engage into product/service offerings using the internet as their major business platform.

Even BW Resources Corp., the most active stock and the best performer at the Philippine Stock Exchange in 1999, disclosed it was in advanced discussions with an American technology company to access an Internet-based gaming system.

SPI Technologies, among the few "stand-up" stocks, or those principally engaged in IT-related businesses like Music Corp. and Ionics Circuits, have set up a joint venture with California-based integrated Telecom LLC for a call center which will service the outsourced customer relationship management programs of overseas clients through a variety of media such as phone and e-mail.

These do not include companies whose diverse business line also include IT-related ventures such Globe Telecom, PLDT and ABS-CBN.

But despite the Internet's huge draw and the prospects of duplicating the performance of the Nasdaq or technology-based stocks in the US, most market analysts believe the Philippine market is still in the infancy stage for these high-tech issues, since just over one percent of the population has direct access to the worldwide web.

PCCI Securities assistant vice president and research head Gonzalo Bongolan said the stock market is likely to trek a modest recovery this year, anchored on the solid or blue chip stocks such as PLDT, Meralco and San Miguel.

"The potential is there (for Internet stocks) but the market is not yet at the level where these companies can expect significant returns. The sectors to watch out for are still the utilities, telecoms, infrastructure and food beverage," he said.

All Asia Asset Management Inc. portfolio manager Albert Chua agreed, estimating that the Phisix would hover within the 1,850 to 2,100 range -- just about the same as last year, since there are no major growth drivers that could fasttrack the market's recovery.