MANILA - The share price of Philippine Long Distance Telephone Co. (PLDT) dropped significantly this week as investors dumped the stock due in part to the controversy over a previous deal between its parent First Pacific Co. Ltd. and businessman Alfonso Yuchengco.
PLDT shares ended at P2,325 apiece Friday, down 3.3% from their close of P2,405 Monday, the day Sen. Panfilo Lacson revealed in a privilege speech that Yuchengco was forced into selling his stake in the telecommunications firm back in 1998. The company's shares fell as much as 4.3% to 2,300 during the week.
Lacson alleged that former president Joseph Estrada used the police to harass and threaten Yuchengco to sign conveyance of his stake in Philippine Telecommunications Investment Corp., equivalent to over 2 million PLDT shares, in favor of Hong Kong's First Pacific. Yuchengco has corroborated the senator's claim.
In an interview with ANC's Business Nightly, analyst Francisco Liboro of PCCI Securities said investors, particularly foreign ones, were worried about legal repercussions that may arise from the issue.
"This raises uncertainty levels that foreign fund managers really don't like. So they take their profits," Liboro said.
"Again, it's politics. The politics in itself makes everything uncertain. We don't know what will happen if the ownership issue is brought to the court," he added.
Jun Calaycay of Accord Capital Equities Inc. echoed Liboro's views, saying that "those who were not able to make sense of it all would rather just dump the stock."
However, he said that the controversy would not have a sustained impact on PLDT over the long term.
"It's really a political issue. Investors are just taking a wait-and-see attitude until the issue dies down. In the long term, the basis for investing in PLDT will always be its fundamentals. Regardless of ownership, PLDT will have the same market, the same products," noted Calaycay.
While they expect investors to remain cautious about PLDT, both Liboro and Calaycay said the telecom stock may post a rebound soon after receiving heavy beating this week.