Wednesday, June 20, 2001

June 20, 2001


Yesterday, we commented how the market may salvage the remnants of its past rally by either staying flat, or by gaining a bit. True enough, it stayed flat, registering a 0.72-point gain, but more importantly maintaining its upward momentum based on its charts. We had feared the index would test the 1430 support level should there have been continued selling pressure. Today's performance showed a balance in terms of market breadth, with gainers slightly outpacing losers.

But the headline figure doesn't really reflect the excitement in the market right now. True to the classic fund rotation theory, there is now renewed speculation in third liners, with talks of backdoor listings once again circulating. Mining issues that tickled punters' fancy today were LC, which rose by as much as 21% but ending just 5.41% higher than yesterday's close. The company's "B" shares fared much better, as it closed 15.79% higher to P0.22. A number of betters likewise trained their eyes on Philex Mining, as the issue rose by 11.11% to P0.4.

The distinction of being the best performer among the more fundamentally sound stocks however, belongs to CBC which raced to a 14.81% to close at P4.65. Since the issue's volatile breakout in early May when it was rumored that SMC may purchase CBC from RFM, the issue has gained an aggregate of 69%. The news has thus powered the issue to a three-year high and makes it among the best performers in the bourse.

We cannot fail to mention PLDT however with its heavy weighting in the index. After all, in the recent weeks, the issue's performance has been mirrored by the index. In the past days, the issue has been rather steady, trading in range, like today when it gained P10 to P725. TEL was also the most actively traded issue for the day.

Meanwhile, the company denied that it was open to selling a stake in Smart Communications, after a news item reported that it has been discussing such with Nippon Telegraph and Telephone Corp.

ICT, a victim of a classic sell on news syndrome, continued to show signs of weakness today, even as it gained 1.82% to P2.8. However, before closing up, it tested a P2.6 intra-day low, perhaps giving a hint of the issue's direction in the days to come.

In a similar boat is BPC, which managed to gain 3.49% to P1.78 today, even as it tested an intra-day low of P1.72.

Meanwhile, Equitable Bank announced that withdrawals reached P35bn at the height of the Estrada impeachment trial. The bank said however, that it had paid back about P15bn of that amount. The rest will be paid within the year. Nonetheless, EBC said that the cost of the loan will weigh down the bank's bottom line for the year. It also said that it plans to sell its bad loans, which amount to about P21.8bn, to generate cash. EBC lost a peso to P39.


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