Investors remained cautious about PLDT Inc.’s shares following the record plunge this week after the Philippines’ largest phone company by revenue said it found 48 billion pesos ($867 million) in unaccounted spending.
(Bloomberg) — Investors remained cautious about PLDT Inc.’s shares following the record plunge this week after the Philippines’ largest phone company by revenue said it found 48 billion pesos ($867 million) in unaccounted spending.
The company, through an internal audit, discovered a budget overrun from 2019 through 2022 for its network expansion, it said on Friday. The amount could be as high as 130 billion pesos, according to a Philippine Daily Inquirer report. The company will hold an investor briefing on Wednesday.
“PLDT will continue to be punished until investors are satisfied the problem has been addressed,” said Astro del Castillo, managing director at First Grade Holdings. Even then, it would take time for PLDT to rebuild investor trust, he added.
The episode underscores serious corporate governance concerns for a company that counts a large base of foreign investors but has the second-lowest percentage of independent directors among the 30 firms in the benchmark Philippine Stock Exchange Index.
Here are three charts showing how shareholders fled the stock:
Volumes for PLDT spiked in the ten minutes before stock trading ended on Friday, with more than 100,000 shares changing hands. The bourse and the securities commission have said they are looking into this surge for possible violations given that it happened just an hour before PLDT’s statement highlighting the discovery.
PLDT’s record 19% tumble on Monday in Manila was driven by foreigners who exited the stock at the fastest pace ever, according to Bloomberg data. Together, they pulled out more than 696 million pesos from the stock — nearly 70% of total foreign outflow from the entire market that day. PLDT’s collapse also pushed the benchmark Philippine Stock Exchange Index down 1.3%.
The setback for PLDT allowed rival Globe Telecom Inc., a venture of Ayala Corp. and Singapore Telecommunications Ltd., to become the country’s most valuable telecoms firm. Globe added more than 15 billion pesos in market cap since Friday even as PLDT shed more than 60 billion pesos.
–With assistance from Jeffrey Hernandez.
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