GMA Network shares sizzled on Monday after the House Legislative Franchises Committee junked the application for a new broadcasting franchise from rival ABS-CBN Corp. In effect, prompted the Philippine Stock Exchange (PSE) to suspend trading on the latter’s shares.
The shares advanced by 10.28 percent to close on Monday at P6.65 per share. It was giving a market capitalization of P20.27 billion.
The shares hit a high P8.50, up 41 percent in intraday trade from Friday’s P6.03, on expectations that their share of advertising placement will inevitably balloon now that their long-standing competitor has gone off the air.
Market Value
It was the day’s second most actively traded company in the thinly traded stock market on Monday. It was with about P498.4 million worth of GMA network 7 shares changing hands.
ABS-CBN is at only P12.7 billion on the stock market.
ABS-CBN shares were at P14.78 each as of last Friday’s closing compared with a 52-week high of P24.85.
“For ABS-CBN, I think it’s normal to temporarily suspend to give shareholders enough time to consult with brokers on what to do with their shares,’’ said Luis Gerardo Limlingan, managing director at Regina Capital Development Corp.
“On GMA 7, it’s the perception of increased ratings and therefore ad placements,” he added.
Big Windfall for GMA 7
“Theoretically, GMA 7 can double its rates,” said veteran stockbroker Joseph Roxas, chairman of Eagle Equities Inc.
However, Roxas said, given the impact of reduced competition on the broadcasting business.
Trading on Philippine depositary receipts from ABS-CBN was also suspended.
The PSE said the suspension would be lifted one trading day after the dissemination is full disclosure to the investing public.
Follow and join us on Youtube, Instagram, Facebook, and Twitter to be part of the trader community in Asia