|
|
Tuesday, February 07, 2006
Shares decline 1.7 % as PLDT falls on downgrade (2:00 p.m.)
MANILA -- Philippine shares declined for a second session Tuesday, weighed down by losses in blue chip Philippine Long Distance Telephone Co. after it was downgraded by broker Morgan Stanley.
The benchmark 30-company Philippine Stock Exchange Index fell 35.75 points, or 1.7 percent, to 2,097.38, after shedding 0.3 percent Monday.
PLDT was the most actively traded stock with a loss of 3 percent to P1,790 on heavy volume of 418,400 shares traded.
Traders traced the sell-off in PLDT to a Morgan Stanley report downgrading the stock to an "equal-weight" from an "overweight" rating after enjoying a strong rally during the past two years.
The report said that while the fundamentals of the country's largest telecommunications group by subscribers and assets remain sound, its upside is now limited by slowing mobile phone growth, competition posed by voice-over Internet protocol, and the potential four percent to five percent earnings dilution arising from the conversion of preferred shares into common stocks between this year and next.
Traders said the PLDT sell off triggered a bandwagon effect in the market, with other blue chips taking their cue from the stock's decline.
Among them, PLDT rival Globe Telecom fell 1.3 percent to P750, Ayala Land dropped 2.3 percent to P10.75, SM Prime shed 2.4 percent to P8.10, and Manila Water lost 3.1 percent to P6.20.
"PLDT's loss was likely triggered by the Morgan Stanley report. It provided investors with an excuse to take profit following recent gains," said Citiseconline investment analyst Mark Alan Canizares. (AP) |
|
|
|
