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Stock
prices declined yesterday for the second day this week,
sending the benchmark to its lowest in almost 20 months,
on concern that rising inflation will cut earnings and
increase costs.
Philippine Long Distance Telephone Co., also known as
PLDT, paced the slide among the nation’s biggest stocks,
on reports that higher fuel and food prices will slow
its earnings growth this year.
“PLDT’s
profit warning shows it will be tough for some companies
to reach their earnings goal,” said Allan Yu, who helps
manage the equivalent of about $3.4 billion at
Metropolitan Bank & Trust Co.
The
Philippine Stock Exchange Index dropped 2.5 percent to
2,579.28 at the close of trading, the lowest since
October 2006. The measure has tumbled 33 percent since
its 3,873.50-record close on October 8.
PLDT,
the nation’s largest phone company, declined 4.1 percent
to P2,335, its biggest loss since January 22. The stock
fell to its lowest close since August 17 following a
report that this year’s so called “core profit” will
grow 5.1 percent, less than half the 11 percent made in
2007.
Ayala
Corp., which has investments in banks, telephone and
property, fell 4.9 percent to P290, its lowest since
August 23. Ayala was the second-biggest drag in the
benchmark today after PLDT.
“The
looming slowdown and the threat of rising inflation is
making investors cut back on stocks,’’ said Alex Pomento,
strategist at the Macquarie Group Ltd.
Energy
stocks such as Manila Electric Co. (Meralco), the
largest local power retailer, declined 8.3 percent to
P50, its lowest close since January 2, 2007, on concern
a government directive to cut power rates will hurt
profit. First Philippine Holdings Corp., which holds 33
percent of Meralco and owns the nation’s biggest
nonstate power producer, decreased 8.6 percent to
P26.50, the lowest since October 27, 2004.
First
Gen Corp., a unit of First Holdings and power supplier
of Meralco, fell 3.2 percent to P30, its lowest since
March 19. Benpres Holdings Corp., owner of First
Holdings, dropped 16 centavos, or 9.6 percent, to P1.50,
its lowest since November 8, 2006.
The
government wants power companies, including Meralco, to
pay the value-added tax levied on electricity lost to
pilfering and transmission leakage. It also wants to cut
the system losses that utilities can recover from
consumers.
Filinvest Land Inc., the nation’s No. 5 builder by
value, declined 7 centavos, or 8.2 percent, to 78
centavos, its lowest close since January 13, 2005. The
stock had its biggest fall in four months on speculation
that a continued decline in the company’s market value
will further turn away investors. The builder has lost
43 percent in market value this year.
“The
company’s market capitalization is becoming smaller and
those investors who are wary that this will make the
stock less liquid are staying away,’’ Macquarie’s
Pomento said. (Bloomberg) |
