GLOBE TELECOM, Inc.’s shares rose last week after it sold assets to Phil-Tower Consortium, Inc. (PhilTower) and announced its partnership with Lynk Global, Inc.
Data from the Philippine Stock Exchange (PSE) showed a total of 535,785 Globe shares worth P1.1 billion exchanged hands from June 24 to 28, making the telecommunications company the seventh most actively traded stock last week.
Shares closed at P2,100 apiece last Friday, up 8.9% from P1,928 a week ago.
Year to date, the stock jumped 22.1% from the P1,720 finish on the last trading day of 2023.
Analysts attribute the week-on-week growth to positive developments surrounding the telecommunications company.
On Tuesday, Globe announced its partnership with Lynk, a global satellite company, to assess satellite-direct-to-phone communications in underserved areas in the Philippines.
Pilot areas for the program are Zambales, Pangasinan, Siargao, and Leyte. The program will make use of Lynk’s low-Earth-orbit (LEO) satellite constellation to deliver short messages and emergency alerts in areas without traditional network coverage.
The collaboration will last one year or until June 2025 with the goal to enhance connectivity in the country.
The partnership pushed Globe stocks up, reflecting investor optimism about the satellite-direct-to-phone services, Jervin De Celis, equity trader at Timson Securities, Inc., said in an e-mail interview.
“The market perceived this initiative as a strategic move to enhance connectivity in remote areas, which could drive future revenue growth,” he added.
“The potential for improved connectivity in underserved areas represents a growth opportunity for [Globe], potentially increasing its subscriber base and revenue,” Arielle Anne D. Santos, equity analyst at Regina Capital Development Corp., likewise said in a separate e-mail.
Meanwhile, Globe sold 48 towers worth P710 million to PhilTower, bringing the total disposition of assets to 1,148 out of 1,350 towers, Globe said in a statement on Monday.
Globe said that the transaction will yield funds for raising capital and improving balance sheet health.
“This transaction enhanced [Globe’s] liquidity and financial health, boosting investor confidence and contributing to stock price appreciation. The move aligns with the telecom industry trend of divesting infrastructure to focus on core operations and partnerships,” Ms. Santos said.
Ms. Santos added that foreign investors and a reassessment of Globe’s valuation further pushed shares upward.
“Foreign investors were net buyers of at least 190 million pesos worth of Globe’s shares, indicating strong confidence in the company’s strategic direction,” Mr. De Celis likewise said.
Globe’s first-quarter revenue reached P45.31 billion, inching up 0.6% from P45.03 billion in the first quarter of 2023.
On the other hand, the company’s attributable net income went down 6.1% to P6.81 billion from P7.25 billion in the same period last year.
“Following [Globe’s first quarter 2024] results, market sentiment has further improved, supported by significant upward revisions in target prices by brokerage firms. This reassessment underscores growing confidence in [Globe’s] strategic initiatives and growth prospects, fueling heightened investor interest and driving its stock price higher,” Ms. Santos said.
Mr. De Celis sees Globe’s second quarter revenue to reach P46.99 billion, while full-year revenue may reach P172.4 billion.
Ms. Santos expects the stock to continue moving upward this week.
“It will likely remain range-bound with some pullbacks from time to time, as the [relative strength index] is already in the overbought region. This suggests that while investor sentiment is currently strong, some profit-taking and short-term corrections are expected as the stock consolidates its recent gains,” she added.
“Since the stock has just broken out of its five-week consolidation period, the stock may experience a pullback early [this] week for a potential profit taking move from market players,” Mr. De Celis likewise said.
He placed Globe’s short-term support at P2,020 and resistance at around P2,230 should it continue its uptrend movement.
Ms. Santos placed her support at P2,014 and resistance at P2,160. — Karis Kasarinlan Paolo D. Mendoza
