PSEi slides on gloomy PLDT profit outlook

THE LOCAL stock barometer fell sharply on Monday as investors dumped shares of index heavyweight PLDT due to gloomy prospects for the years ahead.

Reversing early session gains, the Philippine Stock Exchange index shed 100.26 points or 1.48 percent to close at 6,671.04 as telecom giant PLDT slid by nearly 18 percent.

The PSEi retested the 6,800 mark in early trade but dealers said investors were later on spooked by pronouncements from PLDT management that it would take the company three years to recover.

“The outlook is not good,” said Eagle Equities president Joseph Roxas, when asked to explain PLDT’s sharp decline, noting that investors had factored in prospects of a three-year recovery period.

PLDT chair Manuel V Pangilinan had told a press briefing on Monday that it would take three years “before we make a complete turn,” adding that the digital shift was a “long and difficult” process. This was even as 2015 earnings results were in line with consensus.

The steep decline of PLDT – the day’s most actively traded stock – dragged down the services index by 8.35 percent. The financial, holding firm and mining/oil counters likewise slipped.

Rival telecom firm Globe Telecom was also down by 2.37 percent as investors anticipated tougher competition in the telecom business with the forthcoming entry of a new player, San Miguel Corp.

On the other hand, the property counter gained by 1.84 percent while the industrial counter also modestly firmed up.

Conglomerates SMIC and JG Summit also both slipped while MPI, Jollibee and AEV all fell by over 1 percent.

On the other hand, the property bucked the day’s downturn with the gains eked out by Megaworld (+3.15 percent) and ALI (+2.34 percent).

URC, GTCAP and EDC were all up by over 1 percent while SM Prime and AC also slightly gained.

Despite the PSEi’s slide, there were slightly more advancers (90) than decliners (88) in the overall market. Value turnover amounted to P8.5 billion.

Elsewhere in the region, stock markets were mostly upbeat at the beginning in the aftermath of the G20 Summit in Beijing but turned cautious afterwards due to an extended stock market rout in China and the decline in oil prices.