Weak market sentiment drags down shares in Globe Telecom

GLOBE Telecom, Inc.’s share price inched down last week amid weak market sentiment, with news about its popular e-wallet unit GCash’s planned public debut by year-end failing to lift the stock.

Data from the Philippine Stock Exchange (PSE) show P1.02 billion worth of 580,600 Globe shares were traded from June 13 to 16. Local financial markets were closed on June 12 for the Independence Day holiday.

The Ayala-led telecommunication company closed at P1,710 apiece on Friday, 4.2% lower than its P1,785 per share finish on June 9. Since the start of the year, the stock has declined by 21.6%.

“Over the past few days, we observed foreign investors selling off the stock, potentially due to fund managers adjusting their portfolios,” Mark Crismon V. Santarina, head of Electronic Trading at Globalinks Securities and Stocks, Inc., said in a Viber message.

He also noted that the Philippine stock market, including Globe’s stock, is currently undervalued.

Last week, Globe has announced plans for GCash to go public via an initial public offering (IPO) of its shares. G-XChange, Inc., the operator of the e-wallet, is owned by Globe subsidiary Globe Fintech Innovations, Inc., or Mynt.

In a chance interview with reporters on Wednesday, G-XChange President and Chief Executive Officer Oscar A. Reyes, Jr. said the company has “a lot of things that we need to do, especially from a regulatory standpoint.”

Earlier this month, Bloomberg reported that Globe’s top official expects GCash to be IPO-ready by the end of the year.

Despite the news of a potential GCash IPO, Globe’s stock performance last week was dragged by overall market sentiment, said Ryan Vincent L. Parlade, an equity analyst at The First Resources Management and Securities Corp., in an e-mail.

Currently, GCash is available in France, Germany, Japan, Australia, Italy, the United States, the United Kingdom, and Canada, with plans to expand in the Middle East. Users overseas can access the e-wallet using an international subscriber identity module or SIM card.

Mr. Santarina believes that a GCash IPO “is likely to occur when market conditions improve.”

In the first quarter, Globe’s gross service revenues inched up by 2.1% to P39.98 billion from P39.11 billion in the previous year.

Its attributable net income was nearly halved to P7.25 billion from P13.65 billion. Its consolidated bottom was likewise trimmed by almost half to P7.27 billion in the first three months from P13.66 billion a year ago.

Mr. Parlade expects Globe’s revenue to grow and hit P188.90 billion this year, “considering its upbeat performance during the first quarter and solid contributions from its business units despite the global economic headwinds.”

“We think that the stock may find its support in the P1,700.00 level followed by the P1,600.00 level. On the other hand, we are placing our resistance levels at P1,800.00 to P1,900.00 levels,” Mr. Parlade said.

Meanwhile, Mr. Santarina said Globe’s stock price might continue its downward trend in the short term. “However, with the overall improvement in market sentiments globally, we can anticipate foreign inflows into the local market,” he said.

“This influx of foreign investment may attract buyers for Globe stock, potentially reversing its downward trajectory,” he added.

Mr. Santarina pegged the support and resistance levels at P1,707.00 per share and P1838.00 per share, respectively. — T. C. S. Migriño