Shares in media giant ABS-CBN Corp. soared on Tuesday as investors cheered the filing of a franchise bill at the Senate, boosting early hopes of a return to free TV and radio for the Kapamilya network.
Price of ABS-CBN stocks gained 17.5% from previous day to close at P13.70 each, the highest level since July 10 last year when the Lopez-led network was denied a fresh franchise by Congress.
At the time, House legislators denied the network a franchise after trading hours put the stock price at P14.78 apiece.
The company bucked a bearish sentiment at the main index, which shed 0.88% after investors booked profits after the local bourse ended 2020 and started 2021 on a high note.
“The sudden rally is a knee-jerk reaction from the news about the bill filed to renew ABS-CBN’s legislative franchise,” Anna Corenne Agravio, equity analyst at Regina Capital, said in a text message when sought for comment.
Citing the network’s wide audience reach, Sotto on Monday filed Senate Bill 1967 seeking to renew ABS-CBN’s broadcast license that expired last May 4 for another 25 years.
While the upper chamber cannot tackle or pass the measure without the Lower House doing it first, Sotto’s move prompted Batangas Rep. Vilma Santos-Recto to pledge on filing a counterpart bill at the House of Representatives.
It was at the lower chamber where allies of President Rodrigo Duterte delayed and then ultimately denied ABS-CBN’s pleading for a fresh license to air, triggering the network’s first shutdown since the Marcos dictatorship. Prior to that, Duterte had repeatedly attacked ABS-CBN for its coverage of his administration.
Since then, over 5,000 ABS-CBN employees were laid off in a cost-cutting program targeted at ensuring the network stay financially afloat. The network had since shifted mostly to digital platform before striking a block-time deal with Zoe TV last October that allowed it to air some programs in select areas in the archipelago.
That news of a partnership, at the time, also triggered a massive stock rally of 50% in October 7 to P13.50. Since then, ABS-CBN’s shares had been trading smoothly until Tuesday’s spike.
From these latest stock gains however, Regina Capital’s Agravio said it would take sustained legislative support for a franchise could keep the momentum for ABS-CBN.
“At this point, it looks like any fundamental development regarding the bill and/or further support from Senate could sustain the stock’s rally, although any significant breakout is hinged on whether or not the bill gets approved,” she said.
https://www.philstar.com/business/2021/01/05/2068378/abs-cbn-shares-claw-back-losses-sottos-fresh-franchise-bill
