By Abigail Marie P. Yraola
AYALA-LED Globe Telecom, Inc. was among the actively traded stocks last week with analysts attributing the firm’s latest price stock movements to developments in building up its fifth-generation (5G) footprint.
Data from the Philippine Stock Exchange (PSE) showed a total of 753,265 Globe shares worth P2.42 billion traded from Oct. 4 to 8, making it the fourth most actively traded in the local bourse during the week.
Globe shares finished at P3,088 apiece on Friday, up by 1.25% from a week ago.
Year to date, the stock’s price has climbed 53.02%.
“Globe’s recent developments with its 5G technology has most likely put it in the radar of foreign and local funds alike. The potential growth for this particular service has likely affected Globe’s valuation…,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in an e-mail interview.
“The market has been steadily buying into telco stocks on the back of the sustained demand for data-related services amid the pandemic the past few months. This still has not changed despite the high share price volatility observed this week,” Mr. Limlingan added.
Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce shared a similar assessment: “Globe’s price movement could have been attributed to the company saying that it is accelerating its 5G initiatives to increase adoption rates in the Philippines…,” Mr. Arce said in a separate e-mail.
“5G connectivity is seen as the great equalizer since it will make businesses, big and small, more efficient. It also allows Filipinos to access information, do transactions, learn and enrich their digital lifestyle at faster speeds.”
In a statement last Monday, Globe said it was focused on expanding the 5G adoption in the Philippines to increase its competitiveness among its regional peers. With around 860,000 of its customers on 5G devices as of July, the firm expects “sustained double-digit growth in the next few years.”
Earlier, Globe said it would soon be bringing its standalone 5G technology to its customers. The technology is seen to become the standard for connectivity across a wide range of industry sectors.
Last week’s trading session started with Globe’s closing share price down by 1.64% from its Oct. 1 close before posting day-to-day gains of 3.8% and 9.51% on Tuesday and Wednesday, respectively. The rest of the week saw market players take profit in the stock as its share price dipped by 4.99% and 4.69% on Thursday and Friday.
Latest financial data show Globe’s second-quarter attributable net income increased by 16% to P5.68 billion from P4.9 billion in the same period last year due to sustained growth in its home broadband business.
This brought the firm’s first-half net income to P12.98 billion, 13% higher than the P11.48 billion posted a year ago.
“Earnings will likely grow by the high single-digits this year, commensurate to the healthy growth in service revenues,” Regina Capital’s Mr. Limlingan said.
For Globalinks’ Mr. Arce: “Globe’s [third-quarter] revenues and net income are expected to reach P42.19 billion and P6.25 billion, respectively,” he said.
“For 2021, net income is projected to reach P23.56 billion, driven by mobile and home broadband data owing to the increase of digital activities among Filipinos. For 2022, however, net income is estimated to reach P22.86 billion, as revenues are forecast to grow slower in the next 3 years,” he added.
Mr. Arce pegged the stock’s primary and secondary support price levels at P2,950 and P2,900, respectively, while its primary and secondary resistance price levels at P3,100 and P3,200.
Meanwhile, Mr. Limlingan placed the support and resistance levels at P2,740 and P3,500, respectively.