Investment sentiment may turn sour for East West Banking Corp.’s shares in the near term following reports about the missing cash deposited in the bank, according to analysts.
“The recent reports that have circulated may affect the company’s stock price over the short-term, as investors may feel concerned over the bank’s image in the coming months,” Timson Securities Inc. trader Darren T. Pangan told the BusinessMirror.
The Gotianun-led bank confirmed late Thursday that “a branch manager of ours has gone missing together with the deposits of her two customers with whom she had been transacting for years.”
While EastWest did not disclose the amount due to confidentiality, the bank said it was “not significant.” However, ACT-CIS Party-list representative Niña Taduran claimed in a radio interview that an EastWest branch lost money worth hundreds of millions of pesos owned by two depositors.
EastWest’s stock movement “may be influenced by further developments in the investigation,” Pangan said.
The listed bank said it had already reached out to the affected customers and informed them about the
ongoing internal probe.
“[We] will credit back to their account the amount taken,” EastWest added. The next trading day after the news broke out, the bank’s shares slid 0.19 percent, or 2 centavos, to close at P10.34 each amid the 0.48-percent drop for the benchmark index. The stocks traded as high as P10.38 and as low as P10.14 that day.
The bank’s volume turnover in the previous week’s last trading day reached 949,100, which was lower than 1.55 million the day before. Value turnover, meanwhile, dropped by around 39 percent to P9.78 million on Friday from nearly P16 million on the previous day.
While the recent narrative appeared to have affected the bank’s share performance last week, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said it was “not conclusive” because the market was also reacting to other developments as well.
“The index has been drifting sideways so this also influenced the bank’s price in the market,” he explained, noting the recent events surrounding the new Covid-19 strain.
For this week, Limlingan pegged EastWest shares’ support at P10.30 and resistance at 50-day moving average around P10.82. Pangan, meanwhile, placed the nearest support level at P10 and next support in P9.40 to P9.50 mark.