GMA shares jump 10% as ABS-CBN denied of franchise
Shares of GMA even soared by over 40% intraday, hitting a new 52-week high of P8.50. Volume reached over 69.3 million.
GMA gained almost P2.1 billion in market capitalization.
The price of GMA Holdings, where foreigners can invest in Philippine Depositary Receipts, went up as high as P6.30 from the P5.32 last Friday, July 10, but lost 0.2% at closing.
While shares of the Kapuso network rallied, the Philippine Stock Exchange (PSE) suspended the trading of ABS-CBN shares.
Under the PSE's disclosure rules, ABS-CBN has to submit a detailed report on the impact of the non-renewal of its legislative franchise on the business, financial condition, and operations.
The embattled network also has to disclose its prospects and business plans moving forward for the interests of the investing public.
The suspension will be lifted one trading day after dissemination of the full disclosure. (READ: Big majority of Filipinos think Congress should grant ABS-CBN a franchise)
Last Friday, ABS-CBN shares stood at P14.78 apiece, 2.6% lower than the closing price on Thursday, July 9.
The benchmark PSE index fell 0.4% to 6,172, with only the industrial, services, and mining and oil subindices gaining value.
"Local shares closed lower on refreshed pandemic fears, and with investors looking ahead to the US earnings season," said Luis Limlingan of Regina Capital. (READ: Coronavirus crash: Pandemic pushes stock market down in Duterte's 4th year)
The network shutdown has cost ABS-CBN over P2 billion in revenue losses, making it difficult for the company to service its debts, based on its earlier disclosure to the local bourse.
Over 11,000 employees are affected by the non-renewal, while advertising and production companies are indirectly hit.
The Philippine Competition Commission earlier warned in a Senate hearing that with ABS-CBN off the air, Filipino consumers would have less options for news and entertainment.
Moreover, GMA may get 55% of the total market share due to the ABS-CBN shutdown. – Rappler.com