RENEWED movement restrictions as the country sees a spike in new coronavirus infections derailed market sentiment last week that affected local stocks including Globe Telecom, Inc.
Analysts point to the surging coronavirus disease 2019 (COVID-19) cases as what dragged the stocks to fall across the market on the first trading week of the year, including Globe Telecom, Inc.
Data from the Philippine Stock Exchange (PSE) showed 164,780 Globe shares worth P537.70 million were traded from Jan. 3 to 7. The PSE canceled trading on Jan. 4 due to technical problems in the bourse’s trading engine.
Shares in the Ayala-led telecommunications company ended the year down by 1.6% to P3,270 apiece on Friday from its P3,322 finish on Dec. 31, 2021. Compared with the first trading day on Jan. 3, Globe shares inched down by 0.2%.
Regina Capital Development Corp. Equity Analyst Anna Corenne M. Agravio said that investors are “slightly anxious” with the possibility of putting Metro Manila in a higher alert level.
“Therefore, there weren’t any significant movements in GLO’s share price as the market was taking a wait-and-see stance,” she said in an e-mail interview, referring to the ticker symbol of Globe.
In a separate e-mail interview, Philippine National Bank (PNB) Senior Equity Research Analyst Jonathan J. Latuja shared the same sentiment, adding that the anticipation of renewed lockdowns “may dampen the country’s reopening momentum.”
“I believe this anxiety is observed across all segments and not just the telco sector or Globe,” he added.
New cases of the coronavirus disease 2019 started increasing on the last days of 2021 as the more transmissible Omicron variant started to spread in the country.
Metro Manila and other areas are currently under Alert Level 3 until Jan. 15 to curb the spike of new COVID-19 infections. More movement restrictions and lower operating capacity up to 30% for some commercial establishments were put in place.
Total COVID-19 cases in the country reached 2.97 million after recording 28,707 new infections on Jan. 9. Active cases stood at 128,114.
Meanwhile, Globe said on last Thursday that COVID-19 experimental drug molnupiravir is now available to prescribe via its HealthNow app.
HealthNow app — developed by Ayala Healthcare Holdings, Inc. (AC Health) and Globe’s 917Ventures — is a mobile application that helps patients consult with a doctor virtually and offers delivery of medicines and scheduling appointments while at home.
The antiviral pill has been approved by the Food and Drug Administration in December as treatment for mild to moderate COVID-19 cases, and may only be given to patients 18 years old and above with “risk factors for developing severe illness” such as senior citizens and those with comorbidities.
“This move likely gives investors the impression that GLO is indeed a defensive stock amid the pandemic, confirming what the market has thought since the beginning. Therefore, some would likely rotate their funds out of other blue chips and into GLO,” Ms. Agravio said, referring to Globe’s stock symbol.
For Mr. Latuja, this initiative showcases Globe’s good corporate governance, but he sees no significant impact on its stock price.
He expects the telco to net P5 billion in the final three months of 2021, driven by sustained growth in fixed data revenues.
“At its current price, we think Globe is already trading at a premium compared to its peers,” Mr. Latuja said. “This might provide scope for investors to sell the stock if earnings expectations are not met.”
Ms. Agravio, meanwhile, sees Globe’s top line sustaining a single-digit growth, while the bottom line in the fourth quarter could have increased by “at least high single digits” amid sustained demand for data-related services.
Globe revenues rose by 2.5% year on year to P125.61 billion in the nine months to September. Its attributable net income likewise increased by 12.8% to P17.90 billion during the same period.
For this week, Ms. Agravio placed Globe’s support and resistance levels at P3,200 and P3,600, respectively. — Bernadette Therese M. Gadon
