June 21, 2001

PLAYTIME

It seems the fund rotation cycle becomes more exciting as the money flows into the second and third-liners. Despite the relatively flat index movement (a 5.28-point drop), individual issues provided some worthwhile volatility. Softdrink maker Cosmos Bottling Corp (CBC) really shook up the market, following up its 15% gain yesterday with another 14%. The result is a three-year high for the issue at P5.3. The issue is now just a couple of fluctuations bellow its all-time high of P5.8. If we are to believe the news however that SMC, with the great monopolizer at the helm, will gobble up CBC to a tune of P8/share or even higher, then the rally may be far from over. Then again, the news hasn't really come up in recent days, but with RFM's 22.06% rise today to P1.66, we would keep rethinking the old news.

Despite the double action of the Concepcion stocks, the speculative awardee for the day is undoubtedly ISM, which took a 33.33% flight to P0.06. While still a far cry from its over 230% trek in the 1996-1997 period, the issue is for all intents and purposes back in vogue. Still with no profit to speak of, the company is rumored to be the backdoor vehicle of Shell Petroleum. To recall, both Shell and Caltex are mandated by law to list this year. The two, however have deferred their respective IPOs, citing poor market conditions.

The Ayala companies merited some buying interest today, with ALI registering a 3.7% gain to P5.6 and BPI gaining a peso to P75.50. Notable too were the net buying positions of foreign funds on the two issues, aggregating about P40mn.

EBC, which has been jinxed after being linked to ex-President Estrada's illegal operations, reported an NPL ratio of around 18%-19%, a bit above the industry average of 16%. The bank expects that further provisions will drag down the bank's income for the year. The bank stated that the priority is to have a clean balance sheet (not a cleaned out deposit base) by next year. EBC today dropped 5.13% and closed at P37. It also 'dropped' as director, GSIS head Winston Garcia who has been having policy differences with other directors. The issue is down 37.3% for the year.

In other stock developments, bellwether PLDT slid back by P10 to P715, ICT continued its descent to P2.65, oil refiner PCOR took a breather to P2.2, while beverage company LTDI stood still at P27.

The index seems to have lost momentum either way. And with the way funds have been flowing into smaller cap issues, we may not expect much movement from the main index tomorrow. This is not to say the market will be devoid of excitement. Playtime continues.