ABS-CBN shares halted from trading pending information on business plan
MANILA, Philippines — Trading of shares in embattled ABS-CBN Corp. was indefinitely suspended on Monday to give time to the network to inform investors how a denial of a new broadcasting franchise would impact the company’s business going forward.
In a notice, the Philippine Stock Exchange said the local bourse would allow shares of ABS-CBN and ABS-CBN Holdings Corp., the firm’s holding company, to resume trading a day after information on its corporate plans is submitted.
“The Exchange is mandated to ensure that the investing public has access to full, fair, timely and accurate information where such information may reasonably be expected to materially affect the market activity and the price of its securities,” PSE said.
“Pursuant to the foregoing basic principle and disclosure standard, the Exchange required the Company to submit a full disclosure on the impact of the non-renewal of its legislative franchise on the business, financial condition and operations of the Company, as well as its prospects and business plan moving forward,” it added.
Last Friday, ABS-CBN shares closed 2.64% down at P14.78 apiece, while those of ABS-CBN Holdings dropped a faster 7.9% at P13 each.
Stock trading last Friday ended with investors still awaiting the decision of the House legislative franchise committee on ABS-CBN’s application for a fresh 25-year franchise to broadcast free TV and radio channels.
The network’s old license expired last May 4, and the Duterte government, departing from tradition observed on other franchises, shut down the Lopez-led network a day after, a first since the Marcos dictatorship.
The closure was sealed last Friday after lawmakers allied with President Rodrigo Duterte, who had threatened to close the network in his public speeches, “killed” ABS-CBN’s franchise bill at the committee level with a vote of 70-11, with one abstention. A Social Weather Stations survey later on showed 3 out 4 Filipinos favored the granting of franchise.
ABS-CBN's closure is seen to benefit its rival, GMA Network Inc. On Monday, GMA Network shares are trading strongly, up 1.29 points or 21.4% at P7.32 apiece as of 9:55 a.m. GMA Holdings Inc. shares, meanwhile, rose 8.13% to trade at P5.85 each as of 9:54 a.m.
“We are deeply hurt that the Committee on Legislative Franchises has denied the franchise application of ABS-CBN,” Carlo Katigbak, company president and chief executive, said in a statement shortly after the franchise was denied.
“We believe that we have been rendering service that is meaningful and valuable to the Filipino public,” Katigbak added.
Over at the PSE on Monday, the benchmark index opened at 6,187.78, down 9.6 points or 0.15% from Friday’s closing of 6,197.38. The drop is worsening as of 9:38 a.m. when PSEi traded 0.46% down to 6,168.78.
“PSEi at 6,197.38 highlights the market is having difficulty sustaining the rally but strong support exists at 6,000 levels. Expect continued consolidation within the 6,000-6,500 levels in the near-term,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc., in a market commentary before the Monday trading opened.
“But be on the lookout for a break below the 6,000 levels as it could call for a test of the 5,500/5,800 levels. Watch this space,” he added.
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