Now Corp.’s shares surge by 9.22 percent

 

Despite finishing among decliners last Friday, the shares of Now Corp. still recorded a  week-on-week growth.

Now’s shares up by 9.22 percent to close at P3.20 apiece today, Monday, September 28. 

The company’s shares surged after it announced last September 21 that its subsidiary, Now Telecom Company Inc., was granted an extension of its provisional authority to install, operate and maintain a nationwide mobile telecommunications system by the National Telecommunications Commission (NTC).

AAA Equities head of research Christopher Mangun said Now’s recent announcement boosted its shares greatly but sentiment was dampened after the statement of former Department of Information and Communications Technology (DICT) chief Eliseo Rio.

“There was a lot of excitement from investors after headlines reported the granting of a fourth telco, as there are currently only four companies that have the provision to operate mobile network frequencies [but] statements from former DICT chief brigadier general Rio have dampened the sentiment, which caused a selloff toward the end of last week,” Mangun explained.

Rio said last Monday that he has not heard of any pronouncements from DICT and NTC that Now Telecom is the country’s fourth telco.

Now released another statement last September 22 saying it stands by its statement about Now Telecom being the fourth telecommunications player of the country.

Diversified Securities Inc. trader Aniceto Pangan also attributed the climb of Now’s shares to the provincial permit extension to operate as the “fourth telco.”

“With its ability to operate as [the] fourth telco, it gained confidence among the telco sector’s user to capture a major share of the market’s users,” Pangan said.

Pangan said Now’s shares may continue its volatility depending on the prevailing market sentiment.

“As it corrected substantially after moving up, we expect Now to continue its volatility depending [on] the prevailing market sentiment,” he noted.

Mangun, meanwhile, sees the firm’s shares trading sideways with a negative bias as investors take on a “more cautious stance.”

Both Mangun and Pangan said investors’ sentiment toward the stock would be boosted should it meet the conditions that come with the provisional authority.

“The provisional authority comes with requirements. First is the infusion of an additional capital of P1.9 billion and capital expenditure of P6.3 billion for the next two years. If the company can meet these terms, investors will gain confidence that the company is serious in becoming a major player in the telco space,” Mangun said.

The provisional authority also requires Now Telecom to accelerate the installation of broadband data service in the suburban and rural areas.

Pangan likewise said that Now Telecom should be able to show that it could capitalize as required within the provisional term for the company to gain investors’ confidence.

Source: Peso Economics