Metro Manila — Poor market sentiment due to spiking COVID-19 cases spilled over to DITO CME Holdings Corp., with its share price dropping by 8.79% despite the third telco player’s commercial launch on Monday, analysts said.
Analysts told CNN Philippines DITO CME’s trading was affected by a downward bias for the market, caused by the rising number of new COVID-19 infections. The Department of Health on Monday recorded another 3,356 people who contracted the coronavirus—the fourth day in a row that the number of new patients surpassed 3,000.
The benchmark Philippine Stock Exchange index dropped by 1.81% or 124.45 points to close at 6,756.92, while the wider All Shares fell by 1.90% to finish at 4,079.40 on Monday.
Local sectors also bled, with financials, and mining and oil taking the strongest drop of above 3%.
DITO CME, the holding company of Davao-based businessman Dennis Uy for his communications media and entertainment businesses, saw its shares plunged by 8.79% to ₱1.34 each on Monday.
“Today’s sell-off on DITO’s shares can be attributed to the general market sentiment which is clouded by COVID-19 worries amid the recent resurgence of cases,” Philstocks Financial Inc. senior research analyst Japhet Tantiangco said in a mobile message.
This was echoed by Claire Alviar, Philstocks Financial Inc. research associate, stressing this may negatively affect DITO Telecommunity since its offering is limited to mobile services.
DITO Telecommunity, backed by Uy and China Telecommunications, officially launched its mobile services to select areas in Visayas and Mindanao.
“The rising daily COVID-19 cases have worried investors of another stringent lockdown measures. During the strict lockdown, the demand for mobile data has declined while the demand for home broadband has increased given the work-from-home setups, online classes, and limited movement of people,” Alviar said.
Christopher San Pedro, an equity analyst at Unicapital Securities, said if the trend in the COVID-19 situation continues, it will further ramp up volatility in the local stock market.
“Expect further volatility on the downside if the rising cases out-weighs the vaccine roll out in the short term,” San Pedro said.
Investors ‘already priced in’ DITO Telecommunity launch
Anna Corenne Agravio, an equity analyst at Regina Capital Development Corporation, said investors shrugged off the development, with the “majority sold down DITO on the day of the official launch.”
“The success of the technical audit and the commercial launch has already been priced in,” Tantiangco also said.
According to Tantiangco, investors are now on the lookout for development on DITO Telecommunity’s venture to compete against the incumbents.
“This may include the pace – how fast would DITO Telecommunity be able to expand its operations throughout the country. It may also include competitiveness – how would DITO be able to stand on par with Globe and PLDT,” he added.