The benchmark Philippine Stock Exchange index (PSEi) is flashing warning signs of an extended correction while investors brace for the market impact of PLDT Inc.’s unprecedented disclosure of up to P48 billion in “budget overruns” that went undetected for several years.
The latter raises questions over internal controls and auditing processes at the county’s largest integrated telecommunications giant, which is part of the PSEi.
“Likely, institutional shareholders will not take this at face value,” a market analyst, who requested anonymity, told the Inquirer.
“It’s a blue chip stock. If it can happen to a blue chip, it can also happen to other companies. It can cause some trust issues,” the analyst added.
A second analyst called for management changes at PLDT if the budget overruns were the result of questionable transactions.
PLDT chair Manuel V. Pangilinan told the Inquirer that top executives, including heads of finance, have been suspended while the investigation was ongoing.
PLDT said it would reorganize its management structure and would make the necessary announcements once these were finalized.
Jonathan Ravelas, a veteran stock market analyst, warned that a breakdown below 6,500 would see the PSEi moving toward the support levels of 6,200 to 6,000. INQ