What’s happening to ABS CBN right now interests many investors and the speculation continues. The latest update about this television media is that it’s heading to a 10-year low after President Rodrigo Duterte persisted to continue his attacks on the company. The president is accusing the firm as bias and encouraging owners to sell their shares before March, which is the end of its franchise. This has been going on for a while now. What do you think the company will do to address this? Will the stock recover?
Catch me in my live training events! (quick plug)
The heart of why I do these seminars is I want to build a generation of Filipinos with the right foundation in stock investing. I want to bring smart investing to every Filipino around the world! If you would like to know more about how you could time the market check out the training below.
ABS CBN shares have dropped by 6.3% during the first trading day in 2020. This is already the lowest since March 2009. In 2019, the company ended up with a 21% loss compared with a 4.7% gain in the local benchmark index for the year. One major event that made a great impact on this is the announcement of the president that the media company’s franchise renewal is not sure yet. This was aired on December 30. Earlier this year, he threatened to obstruct the 25-year franchise renewal of the company. The contract is nearing to expire and the public doesn’t know what will happen on the renewal.
The media company has not given its statement regarding this issue yet. Meanwhile, the president also accused the Philippine Daily Inquirer an unfair reporting which that company denied immediately. It can also be noted that there are still pending actions involving Manila Water Co. and Maynilad Water Services. President Duterte said that these companies are corrupt and threatened to sue their owners. He then disclosed that there is a plan to take over the water utilities here in the Philippines.
President Duterte gave the threat to file economic sabotage cases against the two large water companies—Maynilad and Manila Water because of the supposed onerous provisions that are included in their contracts with the government. The revised version of the contracts for these two firms is targeted to be finished before December ends. With the revised contract, the government said that it is giving the two firms an opportunity to renegotiate the terms of their agreement. The fundamentals of the Manila Water are fine but considering this issue, the fate of its share price and the company are unstable because of the developments of the concession agreement talks. This issue changed the picture.