Index ends in negative territory on cautious trading

Stocks wavered in the negative region for most of the trading session although two huge blocks of ABS-CBN’s PDRs crossed shortly before the market’s closing ignited a mild recovery to pare down losses.

The 30-company Phisix slid a mere 0.37 percent or 5.42 points to 1,465.10 while the broader All-Shares index lost just 0.69 point or 0.09 percent to 732.75.

Trades were mixed, with gainers just slightly ahead of losers, 27 to 26, while a larger number of issues, at 41, were unchanged, reflecting the tentative stance of most investors as the politically-charged impeachment process against President Estrada takes shape at the Senate.

The day’s highlight was another couple of block sales of broadcast giant’s ABS-CBN’s Philippine Deposit Receipts or PDRs, which are instruments traded separately but can eventually be converted into ABS-CBN common shares.

ABS-CBN PDRs were issued through ABS-CBN Holdings Corp., a 50-50 owned corporate vehicle between parent firms Benpres Holdings and Lopez Inc., last Oct. 7, 1999 as an instrument to raise additional capital from foreign investors by giving them indirect ownership in the media giant, where foreign ownership is legally restricted.

Under the terms of purchase, each PDR grants the holders, upon payment of the exercise price and subject to certain other conditions, to delivery of one ABS-CBN common share.

Deals in ABS-CBN PDR yesterday amounted to P1.75 billion, representing a sizable 70.3 percent of total market transactions worth P2.492 billion. Last Friday, the PDRs accounted for nearly half, or P1.23 billion of aggregate turnover.

Two blocks of 16.714 million PDRs were separately crossed by Jardine Fleming Exchange and PCCI Securities and Brokers Corp. at P47.50, the same price as Friday’s. Both brokers were also responsible for the cross sales of the previous session.

In a prior disclosure to the Philippine Stock Exchange, Benpres Holdings’ corporate information officer Catherine Lopez-Uy said the sales represented the disposal of 25.5-million ABS-CBN PDRs by Benpres Holdings to an unidentified financial investor to gain an equivalent 3.27-percent ownership of the flagship media unit of the Lopez family.

"This transaction is in line with the Company’s stance in taking precautionary measures for debt servicing at the Benpres level and in recognition of the uncertain state of the economy today," she added.

Earlier, reported negotiations between ABS-CBN and telecom giant PLDT over the possible merger of their landline and cable TV units have triggered speculations of a buy-in by PLDT into ABS-CBN in exchange for shares in Bayantel, the Lopez group’s landline telephone arm.