Shares close flat after seven-day rally, lack of fresh leads
By Rocel Felix
Thomson Financial
First Posted 13:03:00 05/16/2008
MANILA, Philippines – (UPDATE) Shares finished little changed on Friday after investors took profit following a seven-day rally and in the absence of strong domestic leads as the quarter drew to a close.
The market also largely ignored Wall Street's gains overnight on better-than-expected economic data and a pullback in oil prices.
Manila's 30-company composite index inched up 1.69 points or 0.1 percent to close at 2,879.95, after moving between 2,872.97 and 2,887.29. The index gained 3.6 percent from the previous week.
The broader all-share index edged up 0.84 point or 0.1 percent to 1,774.25.
Turnover was higher at P3.3 billion, against Thursday's P2.8 billion.
"With earnings reports almost over, there were no major catalysts that would have sustained the previous rallies," said Jomar Lacson, research director at Campos, Lanuza and Co.
"The range of corporate earnings so far is uninspiring. It reflects investors' pessimism on the growth prospects of companies. There is distrust despite some good results. Investors know that the impact of inflation will be better reflected in the second quarter."
The market also digested reports that the government has approved an increase in the daily minimum wage of private sector workers to help them cope with rising food and energy prices.
"Wage hike expectations are acceptable and the increase shouldn't result into too much spiraling in the prices of basic commodities," said Conrado Bate, president of online brokerage Citiseconline.
Index leader Philippine Long Distance Telephone Co. dropped 0.2 percent to P2,685.00.
Conglomerate Ayala Corp. recovered from previous declines to rise 3.76 percent to P345.00.
Shares of another conglomerate, Benpres Holdings Corp., fell 1.9 percent to P2.55 after its first-quarter net profit slid 91 percent from the year before to P60 million ($1.4 million), reflecting the big drop in earnings of unit First Philippine Holdings Corp. (FPHC).
Power and infrastructure conglomerate FPHC reported on Thursday a 79-percent drop in first-quarter net profit due to higher finance costs and foreign exchange losses.
Benpres said its results also reflected what it described as a difficult year for unit ABS-CBN Broadcasting Corp. The media group announced on Thursday a 14-percent decline in net profit as the increase in expenses outpaced revenue growth.
Southeast Asia's largest food and beverage conglomerate, San Miguel Corp., started out strong but reversed early gains. San Miguel's A shares, limited to local investors, closed steady at P44.00 after hitting a high of P45.00 in early trade. Its B shares, with no ownership limits, fell 1.1 percent to P46.00 after hitting a high of P46.50.
San Miguel reported Thursday that its net profit almost quadrupled to P11 billion ($257 million) in the first quarter, boosted by one-time gains on the sale of assets.
Excluding one-time gains, recurring net profit more than doubled to P4.1 billion. Consolidated revenue grew 11 percent to P39.2 billion.
Among miners, sector leader Philex Mining Corp. gained 3.0 percent to P6.80, lifted by gains in the prices of base and precious metals.
Base metal prices rose on the London Metal Exchange on Wednesday as the earthquake in China increased concerns about supply. Aluminium gained 2.5 percent to close at a three-week high while copper rose 2.3 percent.
Gold prices rallied following strong physical buying in Asia. The most-active June Comex gold contract rose $13.40 or 1.6 percent to $879.90 an ounce.
"The market will continue to trade in a tight range next week. We will probably see more consolidation as investors wait for confirmation that the impact of high commodity prices have bottomed out in earnings. It's too early for investors to jump into the market and start buying; the risks are just a bit too high to get into," said Lacson.
($1 = P42.74)
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