The post-election wild ride with some spicy scares
The PSE [link] opened its first day of trading since Monday’s Presidential election down significantly.
Within 5 minutes of the open, the PSE was down over 200 points (3.1%) to 6,547, and there was an eerie mix of excitement and panic through all of the forums at what was happening.
Some feared that foreigners would mass-sell and exit the market (there was P1 billion of net foreign selling, but it wasn’t really that noteworthy).
Some gleefully watched and speculated on the “crony stocks” horse-race between Prime Media Holdings [PRIM 2.00 38.89%], owned by Imelda Marcos’s nephew, Ferdinand Martin Romualdez, PhilWeb [WEB 4.06 30.97%], owned Irene Marcos’s husband, Greggy Araneta, Araneta Properties [ARA 1.70 30.77%], also owned by Greggy Araneta, plus DITO CME [DITO 5.40 8.00%] and Chelsea [C 1.59 6.71%], which are both owned by Dennis Uy.
Still, from those frightening first few minutes, the market quickly recovered over 100 points in the next hour, to reach back up to 6,667 just before the lunch break.
After the break, the market kind of floated sideways, then heaved up just at the end to close at 6,720. Down a relatively pedestrian 39 points (0.60%) that did not, by itself, tell the story of the whole day that came before it!
MB BOTTOM-LINE
To me, the greatest “signals” from this day were from the media sub-sector.
The early moments of trading were absolutely dominated by the complete face-plant of nearly all non-PRIM media stocks, like ABS-CBN [ABS 10.40 19.38%], GMA [GMA7 11.18 11.97%], Manila Broadcasting Company [MBC 7.54 22.27%].
It’s pretty obvious why ABS might tank, as the Marcos/Duterte tandem is unlikely to be very sympathetic to the Lopez Family’s interest in returning to broadcasting. ABS is faced with an even longer winter of scrambling to monetize its catalog of intellectual property in whatever way it can, while trying to retain its talent and hold its breath for the time when it might be able to work with some spectrum of its own again.
Those times do not appear to be close at hand. It’s less obvious, though, why GMA7 and MBC would also flash-crash, but my thinking is that the market is anticipating the rise of the Marcos-related PRIM, the continued metastasization of Apollo Quiboloy’s Sonshine Media Network International (SMNI), and the inevitable onslaught of Manny Villar’s media empire through his Advanced Media Broadcasting System (AMBS) company that took over ABS’s old spectrum at the start of the year.
My judgment on whether these developments are good or bad for the country don’t really matter, but it’s pretty clear that the market thinks that this election means that there will be a considerable change in the preferred players in the domestic media ecosystem. A pack of obscure and poorly-known new favorites.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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