On a roll, ABS-CBN shares nearly gain back losses from franchise denial
MANILA, Philippines — Shares in ABS-CBN Corp. rallied to the limit anew on Wednesday, helping recoup most losses for the past three months and ending the day at levels not seen since lawmakers sealed the network’s shutdown last July.
ABS-CBN stocks hit the daily ceiling surge of 50% to close at P13.50 each as investors cheered for the second day the Lopez-led network’s return to free television scheduled on Saturday through A2Z channel 11.
“The strong performance is due to confirmation that it was able to do block time deal with Zoe TV,” April Lee Tan, research head at COL Financial, said in a text message.
That deal, announced Tuesday, prompted investors to bet on the network’s financial future and bring its share price to the highest level since July 10 when stocks closed at P14.78.
At the time, the House of Representatives franchise committee just denied ABS-CBN of a fresh 25-year franchise, prompting the local bourse to suspend the network for 2 weeks and allow it to explain plans going forward and shareholders to digest the news.
In terms of market capitalization, ABS-CBN as a company is now worth P11.58 billion compared with an all-time low of under P6 billion.
“What I can say is that the deal will help ABS buoy its revenue to some extent, as the return of the company to free TV entails advertisers being attracted yet again to secure commercial slots with the network,” Arielle Santos, equity analyst at Regina Capital, said in a text message.
What’s more, optimism on ABS-CBN’s deal with the network founded by Eddie Villanueva spread to other Lopez-led firms. ABS-CBN Holdings Corp., the network’s holding firm, likewise reached the surge limit to finish at P13.1 apiece. The media conglomerate’s parent, Lopez Holdings Corp., also joined the rally to climb 21% and close at P3.02 per share.
These listed shares bucked a broader decline in the main benchmark by 0.72% to close at 5,867.88.
With advertising revenues accounting for 39% of earnings in the first half, clearly investors have every reason to celebrate ABS-CBN’s return on free TV. In a statement on Thursday, the network announced flagship shows like “It’s Showtime,” “ASAP Natin ‘To” and “FPJ’s Ang Probinsyano” will pilot in A2Z next week.
Since getting shutdown by government last May, ABS-CBN has committed to shifting resources to digital, but despite movement restrictions working to its favor, the decision has yet to bear fruit financially. While investors are positive for now, Tan said they would also keep a close watch on developments.
“Hard to say if (ABS-CBN) is out of the woods since the number of shows it can air is still limited. Also, the reach is still uncertain because it's analog,” she said.
“So it will be hard to command the same advertising rates it used to command before. But it’s definitely a step in the right direction,” she added.
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