GLOBE Telecom, Inc.’s shares rose last week amid GCash’s prospects of listing overseas and innovations in its own digital network.
Globe was the sixth most actively traded stock last week, with a total of 586,630 shares amassing a total value of P1.40billion traded from Sept. 30 to Oct. 4, data from the Philippine Stock Exchange showed.
Globe stock closed at P2,400 apiece on Friday, up by 6.3% from P2,258 finish last Sept. 27. The stock climbed by 39.5% since its P1,720 close last Dec. 29, 2023.
Globe’s stock price has risen in recent months due to increased investor interest stemming from its growth drivers such as mobile data, GCash, and prepaid fiber, said Stephen Gabriel Y. Oliveros, research associate at China Bank Securities Corp., in an e-mail.
Last week, Globe saw success in its tests with global satellite company Lynk Global’s low-earth orbit satellites. The company was able to transmit text messages in a trial run at a dead spot in San Marcelino, Zambales.
The Ayala-led telecommunications company has invested P265 billion to expand its network to geographically isolated and disadvantaged areas over the past three years. The company also spent an additional P236 billion in operational expenses during the same period to enhance its network capabilities.
Its partnership with Lynk catalyzed Globe stock price growth within the week of the partnership’s announcement, last June.
“This development should bode well for the company as this could further improve network experience for Globe’s subscribers. This should also allow Globe to better reach underserved markets, ultimately propping up revenue prospects over the coming quarters,” Mr. Oliveros said.
Last Wednesday, GCash was reported considering an overseas listing amid delays in its local initial public offering plans. Listing abroad could attract a wider investor base and potentially higher valuations.
Globe Fintech Innovations, Inc. (Mynt), parent company of GCash, secured new investments last August from Ayala Corp. and Mitsubishi UFJ Financial Group. The deal has propelled Mynt’s valuation to $5 billion.
Globe Fintech Innovations operates the mobile payment and remittance service through its subsidiary G-Xchange, Inc. Globe’s digital network functions as a transport channel for the service.
Globe owns 36% ownership interest in Mynt.
Mr. Oliveros said that the rise can also be attributed to “expectations of better cost dynamics as Globe continues to deleverage and reduce capital expenditures (capex).”
Globe invested P28.3 billion in capital expenditure (capex) during the first half of the year, representing a 25% decrease compared to the same period in 2023.
The bulk of its first-half capital expenditures were directed toward data infrastructure. The investment was made to ensure customers maintain continuous access to its digital services.
“Recall telcos have ramped up their capex spend from 2020-2023 to upgrade their networks in light of increased demand for fiber internet, which consequently raised profitability concerns from investors given its impact on costs and debt levels,” Mr. Olivares added.
Globe’s revenues were flat at P89.63 billion in the first semester. Its attributable net income, meanwhile, inched up by 1.6% year on year to P14.55 billion in the first six months of the year.
Mr. Oliveros expects Globe’s core net income to reach P21.5 billion by the end of the year.
He pegged his support and resistance for next week at P2,340 and P2,480, respectively. — P.O.A. Montalvo
Globe shares rise after GCash prospects, improved network
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