"The market remains in consolidation as it traded in a narrow range between 2,075 and 2,085," BPI Securities said in its online weekly market report.
Last week, the Phisix fell 2.5 percent or 53 points to 2,138.70, triggered by heavy selling on Philippine Long Distance Telephone Co. (PLDT), which touched a low of P1,675 after reaching its all time high the previous week. The mixed reviews on the country’s credit rating by Moody’s and Standard & Poor’s weighed on market sentiment.
"Unless the Phisix rebounds back above the 2,090 neckline, the break down may mark a change in the main index’s intermediate uptrend. Still, we believe that the index should hold up as the selling was a bit overdone," AB Capital Securities said.
PLDT lost P105 after a foreign research house downgraded its rating on the company and Globe Telecoms applied for a substantial cut in access charges on local and international calls. PLDT traded as low as P1,680 but recovered after it addressed some of the market concerns most especially on the issue of the possible dilution of earnings due to the 8.2 million preferred shares that can be converted into common shares.
AB Capital Securities said Globe’s request can be interpreted as a start of a price war that triggered fears of lower industry profitability. "The move, which is more beneficial for Globe, comes on the heels of declining mobile subscriber base in the second half of last year. PLDT for its part has already rejected the plea of Globe, noting that it has a bigger traffic than its rival. While NTC does not have sole authority to dictate access charges, pressure may set in from public clamor to bring down rates to more manageable levels," AB Capital Securities said.
Globe likewise closed P5 down as its 2005 net profit was nine percent lower at P10.3 billion.
The Lopez group’s First Philippine Holdings Corp. lost P3 while its First Generation Corp. slipped three percent or P1.50 on its first trading day. ABS-CBN likewise suffered a decline in its share prices, shedding P1.25, mainly due to the stampede that killed over 70 people on the anniversary of a television program that gives away cash prizes.
Philex Mining A lost P0.14 after the company denied that there will be a declassification of its shares. Stock portal 2tradeasia.com said support is seen at 2,050-2,060 while resistance is at 2,100-2,150.
"We are inclined the view the recent weakness as part of a much-awaited technical breather, following the market’s rise early this year. Any lull or weakness should be taken in a positive light, as these provide windows to position in stocks expected to ride with improved economic growth outlook for 2006," 2tradeasia.com said.