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ABS-CBN shares hit surge limit as investors cheer rumored deal with Zoe TV
Employees and supporters light candles at the gate of the the ABS-CBN compound in Quezon City on May 5, 2020.
The STAR/Miguel de Guzman

ABS-CBN shares hit surge limit as investors cheer rumored deal with Zoe TV

Ian Nicolas Cigaral (Philstar.com) - October 5, 2020 - 4:21pm

MANILA, Philippines — Shares in ABS-CBN Corp. sizzled on Monday amid rumors that the embattled media company signed a deal with another network to facilitate the return of some programs on free television, following a government shutdown.

ABS-CBN’s stocks hit the ceiling price of 50% before closing at P10.6 each, up by 43.9% during the first trading day of the week. Shares in ABS-CBN Holdings Corp., the network’s holding firm, also reached its maximum price for the day before ending at P9.97 apiece, surging by 41.62%.

The top broadcaster’s performance bucked a bearish sentiment at the main index, which retreated from the 6,000-mark at the opening and declined 1.01% to close 5,936.95 on Monday. 

“I think that today’s rally can be due to the word on the street saying that ABS had secured a blocktime deal with Zoe TV,” Arielle Santos, equity analyst at Regina Capital brokerage, said in a text message.

Astro del Castillo, managing director at First Grade Holdings Inc., said an access to free TV for the Lopez-led network would mean “attracting back loyal viewers and with them, advertisers” that would benefit the company.

Following the rally on Monday however, investors would be looking for more concrete plans on a reported block-time deal between Sky Cable Corp., an affiliate of ABS-CBN, and Zoe TV, the free TV channel of Jesus Is Lord Church led and founded by Eddie Villanueva. 

Block-timing, or the purchase of air time in a channel that holds a legislative franchise, is a standard practice in the local broadcasting industry. “It’s a light at the end of the tunnel for them, but once a deal is announced, investors would be looking for more,” Del Castillo said in a phone interview.

“From what I know, Zoe TV has very limited reach and that can result into some profit taking,” he added.

For Regina Capital’s Santos, it is still premature to say if Monday’s rally of ABS-CBN shares can be sustained. “The uptick can be disrupted, of course, if ABS denies the deal with Zoe TV,” she said. ABS-CBN officials could not be immediately reached for comment.

“Looking at the chart, RSI (relative strength index) is already on the overbought signals. Meaning to say, profit taking may initiate soon enough. What can make this sustainable, would be an affirmation coming from the company itself,” Santos said.

Since getting denied a fresh 25-year franchise by President Rodrigo Duterte’s allies in Congress last July, ABS-CBN has struggled to shift its business to digital platforms, recording P3.93 billion in losses in the first half and cutting down over 5,000 jobs as of September. Top officials had also resigned.

Amid bearish offshore sentiment, the broader Philippine Stock Exchange index (PSEi) went down on account of reports of US President Donald Trump contracting coronavirus disease-2019. Foreigners were net sellers of local stocks amounting to P1.09 billion.

“The PSEi closed lower with investors speculating on the health of the POTUS (President of the United States) and weaker jobs data raise data raised concerns on the fiscal stimulus need to restart the economy,” Luis Limlingan, managing director at Regina Capital, said in a market commentary.

ABS-CBN CORP. ZOE BROADCASTING NETWORK
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