NEWS of telecommunications firm DITO Telecommunity Corp. passing its first technical audit, its interconnection agreements and its plan to start commercial operations on March 8 in Mindanao and the Visayas, led market players to take profits on the DITO CME Holdings Corp. stock with some loading positions in the last trading day last week.

A total of 535.77 million shares of DITO CME shares worth P8.90 billion were traded on Feb. 22-24 and 26, making it the most traded stock that week, data from the Philippine Stock Exchange showed. Financial markets were closed on Feb. 25 in observance of the 35th anniversary of the EDSA People Power Revolution.

The Dennis A. Uy-led firm closed at P16.14 apiece, down by 10% from the Feb. 19 finish of P17.94 each. Since the first trading day of the year, the stock has grown by 24%.

“DITO’s movement for the past few days was influenced by reports regarding the interconnection deal… and as market participants digested the news that the company is set for its commercial launch on [March 8],” Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan told BusinessWorld in a Viber message.

“[T]ogether with the broader market, the stock experienced a lot of volatility [last] week, given that the overall sentiment remains uncertain amid the ongoing assessment of investors on the COVID-19 (coronavirus disease 2019) vaccine rollout, as well as inflation concerns across the globe,” he added.

Meanwhile, AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said via e-mail the sentiment is “mainly driven by the excitement on the progress” of DITO Telecommunity.

“The company successfully passed its technical audit by the National Telecommunications Commission (NTC). They also announced that they would have their commercial launch on March 8… Investors are very excited and it is clearly showing in the price movement. This is despite the fact that several insiders have been unloading shares recently,” he said.

Asked how DITO CME’s stock movements differ from that of the other stocks actively traded last week, Mr. Mangun said its performance is “incomparable,” calling its traded volume and volatility as “unique.”

“The stock trades 5-10 times the next most traded issue. It also saw wild swings in price movement, something you wouldn’t see in a stock that trades large amounts. It continues to stand out compared to its sector peers,” he added.

In an online briefing, DITO Chief Administrative Officer Adel A. Tamano said the company’s commercial rollout will be done in phases, starting in 17 cities and municipalities in Mindanao and the Visayas. Mr. Tamano expects DITO services to be available nationwide by June.

On Monday, the NTC declared DITO compliant with its requirement to cover 37.03% of the country’s population and provide a minimum average broadband speed of 27 megabits per second (Mbps) in its first year of service.

The telco has a commitment to achieve 55 Mbps and 85% coverage during its second to fifth year of commercial operations. The next technical audit will be held in July.

According to its officials, DITO recently signed interconnection agreements with PLDT, Inc. and Globe Telecom, Inc. The infrastructure for both interconnections is expected to be finished within the month.

Latest financial statements show DITO CME’s attributable net income for the first nine months of 2020 at P69.95 million, 38.7% more than the P50.42 million in the same period in 2019.

AAA Southeast Equities’ Mr. Mangun expects the DITO CME’s stock price to rise in the coming weeks as it approaches its technical launch. “Investors will be very interested in its performance as a telco provider once they start rolling out,” he said.

Mr. Mangun placed the stock’s first support and first resistance levels at P14.4 and P19, respectively.

“[The support] level needs to hold if the price will continue higher. This remains a buying opportunity as long as it stays above this level,” he said.

“First resistance is at its all-time high of P19.00. Breaking above this level will be very bullish for the stock,” he added.

For Timson Securities’ Mr. Pangan: “[T]raders may watch closely if it stays above its nearest support at P14.00. Otherwise, its immediate resistance may be pegged at P19.00.” — Ana Olivia A. Tirona