Many MB readers have noticed that Globe [GLO 2948.00 13.38%] has been on an absolute rampage in recent weeks. GLO started August at P1860/share, and closed yesterday at P2948/share; that’s a 58% gain in just 19 trading days. To put that into perspective, the increase in GLO’s stock price added over P100 billion to GLO’s market cap, which is about the market cap of Alliance Global [AGI 10.18 1.55%]...like the whole thing.
The increase is also happening alongside a massive uptick in GLO’s daily trading volume. Before the pump, GLO was trading about P80 million worth per day, on average, while during the pump it wasn’t unusual to see the stock trade between P200 and P500 million worth in a single day. In the last two days, the stock traded over P1.5 billion per day.
Those are big numbers, but they aren’t entirely special to GLO. Other members of the MB Connectivity Index are experiencing a similar, though less spectacular, pump, like SMART [TEL 1449.00 7.73%], Converge [CNVRG 31.00 4.38%], and, yes, even DITO CME [DITO 8.96 9.54%]. Both TEL and DITO bagged nice 2-day 15% gains, but the other real winner here is CNVRG, which has also been on a massive 30-day surge. CNVRG is up 36% since early August.
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Lots of people wondering what this is all about, and there are no definitive (or satisfying) answers. Some point to the (relatively old) news that Mynt, the parent company of GCash, is “in no hurry to IPO” and is looking to double its current $2 billion valuations. That makes GLO’s 40% stake worth about $800 million, which is serious money, but people are gawking at GCash’s explosive metrics and wondering whether GLO might be sitting on a potential IPO monster in 2022 or later. Naturally, investors took this as a strong signal for TEL’s own fintech investment, Paymaya, which has been growing its userbase at a similar rate to that of GCash. But, you might ask, how does that impact DITO, since DITO has no dog in the fintech fight to inspire investors to dream big? This is where it gets more interesting.
Two days ago, around the time of the pump for DITO and TEL, news broke that there have been very serious lobbying to have telcos removed from the list of companies that are public utilities under the constitution. This would remove the 40% hard cap on foreign investment in telco stocks. Proponents of the change argue that the Philippines lags behind its neighbors significantly in many key mobile connectivity metrics (which is definitely true), and insist that allowing additional foreign investment would bring down costs and improve services to users (that part is not necessarily true, and depends more on which companies invest here and other “minor” details like that).
So, we don’t have great answers as to why each of these stocks may be pumping right now, but at least now you’ll have a better idea of “Today’s Special” speculation on the matter! As always, do your research! FOMO kills.
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