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Fourth telco hopes, company partnership boost NOW stock

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OUTLIER

By Jobo E. Hernandez, Researcher

THE MARKET saw renewed interest in NOW Corp. in hopes of the company being named the country’s fourth telco player as well as its partnership with Vietnam’s Viettel Business Solutions Corp. to offer information and communications technology (ICT) products and services in the Philippines.

A total of 422.608 million NOW shares worth P1.997-billion were traded from Oct. 5 to 9, making it the fourth most actively traded stock last week, data from the Philippine Stock Exchange showed.

NOW finished at P4.77 apiece last Friday, up 28.2% from its P3.72 close on Oct. 2. For the year, shares in the company have gone up by 90.8%.

Darren T. Pangan, trader at Timson Securities, Inc., said NOW’s stock price movement and volume activity had been heavily influenced by reports in late September that the National Telecommunications Commission (NTC) extended a company affliliate’s provisional authority to install, operate, and maintain a nationwide mobile telecommunications system.

“Since then, the stock experienced volatility as it ascended to its current price,” he said in a Viber message.

“[The partnership with Viettel] may have boosted investor sentiment towards the stock as well,” he added.

In an e-mail, Regina Capital Development Corp. Equity Analyst Anna Corenne M. Agravio noted telecommunications firms being among the most actively traded last week.

For NOW, this could have been driven by market speculation ahead of the final pricing of Converge ICT Solutions, Inc., she said, referring to another telco firm set to debut in the local bourse this month.

In a disclosure to the stock exchange on Oct. 2, NOW said it had signed a memorandum of agreement with Viettel “to develop market opportunities in the Philippines,” adding the Vietnam-based technology firm wants to export ICT products and services to the Philippines.

Among Viettel’s notable ICT applications include its Study E-learning Social Network, and its Smart Cities project. It also has a citation for being the best mobile payment in Asia, according to NOW.

The two firms will be exploring opportunities in digital transformation consulting services, artificial intelligence, data analytics, and cybersecurity.

Meanwhile, NOW affiliate NOW Telecom Co., Inc. said the NTC had “extended” its provisional authority to install, operate, and maintain a nationwide mobile telecommunications system.

The extension is not specific to 3G mobile communications technology but can extend to 4G and 5G technologies, the company said.

In the NTC order, the extension comes with conditions, which include the infusion of additional capital of at least P1.9 billion based on the company’s first two years’ capital expenditure of P6.3 billion as submitted and approved by the Securities and Exchange Commission

“Market volatility surrounding the telcos started to simmer down towards the tail end of [last] week. Because of this, NOW’s share price may start to normalize coming into [this] week,” Regina Capital’s Ms. Agravio said.

“The market’s prospects for NOW Corp. are largely dependent on whether or not it will officially be the country’s fourth telco,” she added.

Ms. Agravio placed the stock’s support and resistance at P4.10 and P5.00, respectively.

Timson Securities’ Mr. Pangan pegged an “immediate support” of P4.00 and “nearest resistance” at P5.00.

“We’ll have to observe in the coming days if the stock moves in a sideways direction between these support and resistance areas, or if it breaks out of P5.00, which makes P6.39 the next resistance level,” he said.

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