Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc. rallied in Manila trading, after San Miguel Corp. (SMC) and Telstra Corp. ended talks on joint investment in a new mobile network in the Philippines.
PLDT and Globe, the Philippines’s two established phone companies, gained on expectations
the collapse of Telstra and San Miguel’s planned joint venture will weaken San Miguel’s ability to compete for wireless users.
Fitch Ratings Inc. said this will support the credit strength of PLDT and Globe in the short term.
San Miguel built a phone network with Telstra’s help to challenge PLDT, the former telephone monopoly, and Globe, the nation’s only other wireless carrier.
PLDT surged 12 percent, the most since 2011, at the close in Manila trading. Globe rallied 7.9 percent, the sharpest gain since June 2013.
San Miguel’s venture Liberty Telecoms Holdings Inc. plunged 16 percent on volume that rose more than six times the three-month full-day average. Telstra shares gained 2.3 percent.
PLDT and Globe have raised capital spending to boost their digital network capacity before San Miguel’s entry. They have also asked the government to reallocate the 700- megahertz spectrum, which has been largely assigned to companies related to San Miguel. Ang last November said PLDT and Globe have more than enough frequencies between them, and all they need is to improve what they have.
“The announcement is definitely feeding the positive sentiment on PLDT and Globe. These stocks have underperformed in the past few months because of cloud over the industry by the threat of a third player entering the market,” said Rafael Palma Gil, trader at Rizal Commercial Banking Corp.