SHARES of listed ABS-CBN Corp. surged a day after a fifth bill seeking to grant the media giant a 25-year franchise was filed in the House of Representatives.
On Wednesday, ABS-CBN Corp. shares rose 27.47% or P1.39 to P6.45 apiece. The company’s shares traded as high as P7.46 per share intraday.
ABS-CBN Holdings Corp. Philippine Deposit Receipts likewise climbed by 33.33% or P1.50 to P6 per share. It reached an intraday high of P6.75 apiece.
In a stock exchange disclosure, ABS-CBN Holdings said it has “no undisclosed information” that could have triggered the surge in share price.
China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message that the price surge in ABS-CBN shares showed the market’s reaction to the filing of the House bill.
He said the trading of ABS-CBN stocks is currently speculative amid uncertainties, with a sustained rise dependent on the bill’s progress.
“At this point, trading is mostly speculative as there is a lot of uncertainty around the fate of the proposed measure,” Mr. Colet noted.
“The next several weeks and months might see opportunistic speculation in the stock as some investors bet that this bill has a serious chance given current political dynamics. Whether this becomes a sustainable rally depends on positive developments in the legislative process,” he added.
On Tuesday, Albay Rep. Jose Ma. Clemente S. Salceda filed House Bill No. 11252, over four years after lawmakers denied ABS-CBN’s initial franchise renewal application.
In May 2020, ABS-CBN was forced to stop broadcast operations after the allies of former President Rodrigo R. Duterte in Congress denied the media company’s franchise renewal application, citing franchise violations such as tax issues.
“It’s definitely a reaction to the bill filed by Mr. Salceda to reinstate ABS-CBN’s franchise, and we’ll likely continue to see the market pricing in the prospect of the company getting a congressional franchise again,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.
“The caveat here is that we need to see the bill progress, unlike the three other bills pending at the committee level,” he added.
Meanwhile, COL Financial Group, Inc. Chief Equity Strategist April Lynn Lee-Tan said in a Viber message that the franchise renewal would provide a boost to ABS-CBN’s revenue.
“It would be good if ABS-CBN gets its franchise renewed as it got bulk of the revenue from advertisements, historically,” she said.
For the first nine months of 2024, ABS-CBN saw a 22% decline in its consolidated net loss to P2.59 billion, led by the lower net loss in its content production and distribution segment.
ABS-CBN recorded a 10.4% drop in consolidated revenue for the period to P12.12 billion due to lower cable TV and broadband revenues.
In a separate statement, ABS-CBN expressed gratitude to Mr. Salceda.
“While we were not aware of Mr. Salceda’s filing of a bill to grant a broadcast franchise to ABS-CBN…, we are deeply grateful for his support and belief in ABS-CBN’s contributions and mission to serve the Filipino public,” the media company said.
“We would also like to express our sincerest thanks to Reps. Gabriel H. Bordado, Jr., Arlene D. Brosas, France L. Castro, Raoul Danniel A. Manuel, Johnny T. Pimentel, and Rufus B. Rodriguez, who have previously filed similar bills,” it added. — Revin Mikhael D. Ochave