–ANGELICA BALLESTEROS, The Manila Times
MANILA, June 17, 2019: SHARES of ABS-CBN Corp. slumped to a new 52-week low last week following news that a bill aimed at renewing its legislative franchise did not make it through the 17th Congress.
The listed media conglomerate’s stock price hit its lowest price of P16.80 last Friday before paring losses to end at P16.90.
The Lopez-led firm’s stock declined by 8.45 percent week-on-week from its P18.46 finish on June 7 and by 16 percent since the start of the year.
“ABS-CBN was heavily battered [in] the latter part of the week due to the” House of Representatives’ inaction on the franchise-renewal measure, Philstocks Financial Inc. research associate Japhet Louis Tantiangco explained.
“The selloff was accompanied by a spike in the volume of transactions, showing…those investors really feared the possible nonrenewal of the franchise,” he said.
On June 12, a newspaper report said the lower legislature froze House Bill 4349, which sought to renew ABS-CBN’s franchise — set to expire on March 20, 2020 — by another 25 years. This means the company would not be able to operate should lawmakers in the 18th Congress fail to pass it.
The broadcasting giant was said to be a critic of President Rodrigo Duterte, who has repeatedly threatened to block its franchise renewal since 2017.
Looking ahead, Tantiangco still expressed optimism that ABS-CBN’s might bounce back this year despite posting a 40-percent decline in its net income for full-year 2018 on account of weak advertising sales.
The company saw its net profit jump by 97 percent to P808.4 million in the first three months of 2019 from P410.6 million in the same period last year, with advertising income increasing by 24 percent partly due to political advertisement placements.
“[This] showed that the midterm elections would help in the firm’s financial performance for the year,” Tantiangco said.
On the flip side, he also said company’s stock price was expected to keep tracking a downward trajectory as investors are seen to continue pricing in the franchise renewal freeze.
“It could make a turnaround if it could still [get its franchise renewed]. But for that we’ll have to see if it makes progress in the
congress,” he added, saying “time is ticking for ABS-CBN.”
ABS-CBN produces a variety of entertainment programs in multiple genres and news programs that are aired on free-to-air television. It is also a radio broadcaster, operating 19 radio stations throughout key cities in the Philippines, and provides news and entertainment programming for nine channels on cable TV.
ABS-CBN also owns cinema and music production and distribution outfits in the country and brings its content to worldwide audiences through cable, satellite, online and mobile.###