Metro Manila (CNN Philippines, July 10) – ABS-CBN shares slipped Friday ahead of the expected voting at the House of Representatives on the network’s bid for a fresh franchise.
The stock price slid 2.64 percent to ₱14.78, coming from Thursday’s ₱15.18 finish.
The stock price weakened throughout the day, starting already 0.53 percent weaker at the opening bell before a continued slide the rest of the day.
Over 90 lawmakers are expected to decide on the fate of the embattled broadcast network after wrapping up a series of hearings for its franchise application, which expired May 4. The voting, which is expected Friday afternoon, will start the process of granting or denying a new franchise that will allow the media giant to operate for another 25 years.
ABS-CBN shares, trading under the symbol ABS, have not recovered since May 5’s ₱17.50 close. It was the last trading day prior to the cease and desist order issued by the National Telecommunications Commission telling the network to stop its TV and radio broadcasts. Trading had to be suspended for more than a week before it resumed, but has been on a slump since.
Shares touched a one-year high on Feb. 27 at ₱23.50 apiece, which was around the time when the House asked NTC to grant a provisional authority so the network can operate beyond franchise expiry. It was also the time when President Rodrigo Duterte accepted the apology offered by ABS-CBN top executive Carlo Katigbak for the airing of a smear ad against him during the 2016 campaign season.
The ad, funded by members of the opposition, exposed Duterte’s supposedly undesirable qualities. Still, he won that elections.
A market analyst said this downtrend is a natural reaction.
“Until there is no clear picture that eventually ABS-CBN will be granted a franchise, most investors will be risk-averse given the red flags on the franchise issue, regulatory issue and political issue. Basically it’s politics,” Astro del Castillo, managing director of First Grade Finance Inc., said in an interview.
Del Castillo noted that the share prices will likely see a boost next week if the committee votes in favor of ABS-CBN, but could tank if no votes win. He added that while ABS-CBN still had other businesses to run, its “bread and butter” is the media operations.
On the flipside, its main competitor GMA Network, Inc. is enjoying a lift in share prices, closing 5.6 percent stronger at ₱6.03. Shares skyrocketed to a peak of ₱7.15 on May 6, the day after ABS-CBN’s channels went black.
Critics say the Kapamilya network has committed numerous violations which should disqualify them from a fresh franchise. Meanwhile, those supporting ABS-CBN said the network’s closure would render its 11,000 workers jobless as well as further curtail press freedom under the hands of politicians.
Global research firm Fitch Solutions said in a Wednesday report that the shutdown of ABS-CBN, as well as that of its digital TV transmissions like cable provider Sky Direct, reveal how the local telecommunications sector is “highly politicized” and would turn more foreign investors away.
The Philippine Stock Exchange index closed the week 0.08 percent higher at 6,197.38.
READ: Duterte to ABS-CBN: Next year, you’re out
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