PLDT Inc. shares fell last week following a United States court’s approval of its $3-million lawsuit settlement.
The telecommunications company ranked 12th in value turnover, with P1.02 billion worth of 815,890 shares traded from Sept. 16 to 20, data from the Philippine Stock Exchange showed.
PLDT shares closed at P1,450 on Friday, down from P1,462 on Sept. 13. Year to date, the stock had increased by 13.4%.
Claire T. Alviar, a research associate at Philstocks Financial, Inc., said that PLDT’s trading last week was impacted by its settlement of a class-action lawsuit with investors.
“We view the settlement of this case as a positive development for PLDT, as the unresolved issue may have caused hesitation among investors who likely prefer a resolution before committing to invest,” Ms. Alviar said in an e-mail.
She noted that PLDT’s stock declined week on week, slightly recovering later but still failing to post overall gains.
“The recent settlement news may have clarified some uncertainty regarding potential litigation risks, leading some to connect the case decision with the possibility of adding PLDT to their portfolios,” Alexandra G. Yatco, equity analyst at Regina Capital Development Corp., said in a Viber message.
Prior to the settlement, the company discovered in 2022 a P48-billion discrepancy or about 12.7% in its P379-billion capital expenditure in the past four years since 2019.
This prompted a US shareholder to file a securities class-action lawsuit against PLDT, accusing the firm of violations of Federal Securities Law, citing its disclosures that indicated a budget overrun of P48 billion during the period.
Moreover, Ms. Yatco noted that PLDT became one of the most actively traded stocks last week after the US Federal Reserve’s policy rate cut.
“Since lower rates benefit capital-intensive sectors such as the telecommunications segment, traders may have been encouraged to invest in their outlook on PLDT’s profitability,” she said.
In a Reuters report, the US Federal Reserve cut interest rates by half of a percentage point, kicking off what is expected to be a steady easing of monetary policy with a larger-than-usual reduction in borrowing costs that followed growing unease about the health of the job market.
In the second quarter, PLDT reported a 9% year-on-year decrease in its attributable net income to P8.59 billion from P9.44 billion. Meanwhile, its consolidated revenue rose by 3.3% to P53.36 billion from P51.68 billion.
For the first half of the year, its attributable net income decreased by 0.2% to P18.41 billion from P18.45 billion while consolidated revenues for the period increased by 3.4% to P107.58 billion from P104.04 billion.
Ms. Alviar anticipates year-on-year improvement in the bottom line for the second half, potentially driving full-year earnings growth to at least single digits.
“As of writing, PLDT’s support and resistance are at the 1,430 and 1,490 levels, respectively. After several consecutive days of closing with red candles, the stock is attempting to climb as buying pressure aims to surpass selling pressure, further narrowing the gap. A sideways shuffle is estimated for the upcoming days, as traders continue to monitor PLDT’s profitability.” Ms. Yatco said.
“PLDT’s primary trend (long term) remains in an uptrend, though it is currently experiencing a correction. It is at the support level of P1,440-1,450 range, with the second support pegged at P1,375. The current resistance stands at P1,550. If it fails to stay above the P1,440, we’re expecting a trend reversal, from uptrend to sideways movement,” Ms. Alviar said. — Charles Worren E. Laureta
