Philippine stocks rose on Wednesday, led by dominant phone firm PLDT on hopes it might still merge its mobile unit, Smart Communications Inc, and 45 percent owned Piltel.
The main index closed up 8.39 points, or 0.55 percent, at 1,526.94 points amid cautious trade as investors awaited the results of a May 10 presidential election.
Philippine Long Distance Telephone Co (PLDT), a quarter owned by Hong Kong's First Pacific Co Ltd, jumped 1.47 percent, or 15 pesos, to 1,090 pesos.
Pilipino Telephone Corp (Piltel), the country's third-largest mobile phone firm, was unchanged at 1.72 pesos.
"Players are buying selectively as they await the results of the elections," said AB Capital economic analyst Jose Vistan.
"PLDT is the most active but I don't think it's because of the Smart deal. The stock is still not fully valued. Based on the projected 18 billion peso net income for 2004, its share price should be somewhere at 1,300 pesos or better".
On Tuesday, Smart said it had failed to convince creditors of affiliate Piltel to back a 20.5 billion peso ($368 million) takeover offer.
But Smart said the level of creditor support needed to proceed with a plan to swap its debt for Piltel's, was high, and the deal could still go ahead.
Creditors needed to agree to swap at least 75 percent of Piltel's debt for Smart debt for the deal to go through. At the May 31 offer deadline, Smart had received offers for 68.4 percent of Piltel's debts.
"The transaction may yet pull through, considering that the acceptance by 68.4 percent of Piltel creditors is not far from the 75 percent and this gives them greater probability of recovery on Piltel debt owed to them," said RCBC Securities research head Chelsea Dipasupil.
"We recommend a trading buy on weakness on Piltel".
But traders said market turnover was thin at 321.68 million pesos ($5.78 million) as investors were cautious over the slow pace of the official vote tally.
Gainers narrowly beat losers 23 to 22, and there were 41 stocks unchanged.
B shares of San Miguel Corp, Southeast Asia's largest food and beverage company, rose on news it had obtained a licence to manufacture its own beer brand in Thailand.
San Miguel-B, which is open to foreigners, rose 50 centavos to 69 pesos.
Analysts expect the market to drift sideways in the coming sessions, with immediate support at 1,500 and resistance at 1,535 to 1,550.