Index edges up as investors go bargain-hunting

Shares advanced marginally yesterday as investors bought Philippine Long Distance Telephone Co. (PLDT) and other heavyweights.

But investors were reluctant to build positions decisively, channeling their funds instead into buying into the initial public offering by broadcaster GMA Network Inc.

The benchmark 30-company Philippine Stock Exchange Index rose 5.12 points, or 0.1 percent, at 3,734.80, after losing 1.5 percent over the last two days.

“The market is basically in consolidation mode, with most of the flows going into the ongoing shares offerings,” said Summit Securities President Harry Liu, referring to the share sales of GMA Network Inc., Philippine National Bank and Vista Land & Lifescapes Inc.

The initial public offerings have sapped the market’s liquidity and investors were focused on bargain-hunting in stocks that led the market’s recent decline, traders said.

Jose Vistan, research head at AB Capital Securities, said: “The liquidity drain resulting from a series of stock offerings this month made investors hesitant to trade.” He said domestic political concerns and the fact that the market has not corrected substantially after hitting new highs recently had also discouraged investors from making decisive moves. Vistan said some investors were worried about what might happen after a court trying former President Joseph Estrada on corruption charges delivers its verdict in the next few weeks. Estrada still has a large following among the general public.

Among them, PLDT climbed 0.18 percent to P2,705 following the 0.8 percent rise in the company’s American depository receipts. PLDT’s rival Globe Telecom Inc. surged 1.9 percent to P1,370, and conglomerate Ayala Corp. rose 0.9 percent to P565.

Investors were cautious ahead of President  Arroyo’s annual address to Congress Monday, and will likely take their cue from first-half budget deficit data, expected after the market closes, traders said.

Shares in Ayala Corp, the country’s biggest conglomerate, rose P5 or 0.9 percent to P565. Manila Electric Co. (Meralco) gave up its early gains, with the A-shares closing flat at P103 and its B-shares retreating P1 or 0.9 percent to P103. Meralco stock had advanced in early trading after First Philippine Holdings announced that it had entered into a deal to buy another 6.6 percent of the power distributor for P8.3 billion. Shares in First Philippine Holdings rose 50 centavos or 0.6 percent to P89.— AP