PSEi perked up by telco asset deal

THE LOCAL stock barometer firmed up on Monday on the back of selective buying mostly triggered by a telecommunication asset buyout deal that reinforces duopoly in the local market.

The Philippine Stock Exchange index gained 52.66 points or 0.71 percent to close at 7,464.34, led by index stocks PLDT, Globe and SMC which benefited from SMC’s decision to sell all its telecom assets to the two top players.

The deal drove PLDT and Globe higher by 9.13 percent and 5.8 percent, respectively, as it eliminated prospects of strong third player making inroads into the local market. The seller SMC also surged by 5.58 percent as it will receive around P52.8 billion in equity alongside the transfer of all obligations.

Apart from this telco deal, PLDT also benefited from a separate deal to sell 25 percent of its stake in Beacon Electric – the First Pacific group’s holding firm for Meralco shares – to sister firm MPIC.

JG Summit, a strategic investor in PLDT, also gained 0.54 percent while MPIC gained 1 percent.

Outside of the PSEi, SMC’s telco arm Liberty slid by 19.56 percent as the market mulled the impact of the asset sale. Based on the deal value at the Vega holding firm level, 80 percent will go to Liberty equivalent to about P41.6 billion. But since Liberty has preferred shares in top of common shares, the market turned jittery on how much the net effect will be on the valuation of each share.

By counter, services advanced by 4.61 percent, leading the PSEi higher. The holding firms ended modestly higher while the financial, industrial, mining/oil and property counters all slipped.

Total value turnover for the day amounted to P15.38 billion. Despite the PSEi’s gain, market breadth was negative as there were 104 decliners which outnumbered 85 advancers while 45 stocks were unchanged.

AEV and FGEN also rose by over 2 percent.

On the other hand, URC, SMIC and BDO all declined by over 1 percent while AC, ALI, Meralco, SM Prime and EDC likewise declined.