NEWS from Globe Telecom, Inc.’s fintech unit, attracting fresh funding through an acquisition from a New York-based investment company, was the guiding force behind the former’s trading operation last week.
Data from the Philippine Stock Exchange shows a total of 461,060 Globe shares worth P957.73 million exchanged hands from 11 to 15 January, rendering it the 13th most actively traded stock last week.
The share price of the Ayala-led telecommunications company closed on Friday at P2.100, up by four per cent from a week earlier. Year to date, the stock has grown by 4.1 percent.
“The extension of the Fintech arm of Globe has hit the headlines as it has attracted fresh money to further support the development of digital payment and financial services. The Fintech market is hugely upside down and Globe is taking advantage of it,” Mercantile Securities Corp. Analyst Jeff Radley C. See said this in a Viber post.
Globe revealed on January 8 that Mynt (Globe Fintech Developments, Inc.)—the Fintech branch of Globe and the mobile wallet provider GCash—has received over $175 million in fresh funding from the investment company Bow Wave Capital Management.
Fresh capital expenditure, through a limited partnership fund operated by Bow Wave, is said to further promote the development of financial inclusion and the digitization of payments and financial services in the region.
In addition, the fresh capital of Bow Wave and its current owners was collected in several tranches, with the post-money value of the final tranches hitting close to $1 billion.
Bow Wave’s investment in Mynt would transform into a “minority ownership stake” in Mynt, Globe said, without further disclosure of the conditions of the investment.
“The capital infusion is raising GCash’s value by close to $1 billion, which has allowed investors to bet about what Globe’s current valuation would be in the light of this recent growth,” said Jonathan J. Latuja, Senior Equity Research Analyst at the Philippine National Bank (PNB).
Mynt is controlled by Globe, its parent company Ayala Corp., and Ant Financial, a subsidiary of Jack Ma’s Alibaba Business.
News sources noted that the sale took Bow Wave’s share of Mynt to 14 per cent. On the other side, the shares of Globe and Ant Financial in Mynt were each diluted to 40 per cent from 46 per cent. The share of Ayala Corp. was also decreased from 8 percent to 6 percent.
Globe saw the attributable net profits dropping by 10.15 per cent to P15.89 billion in the first nine months of 2020 relative to P17.68 billion in the previous year. Service and non-service sales for the duration contributed to P119.59 billion, 3.1 per cent less than a year ago.
Mr. Latuja’s GNP predicted Globe’s sales to rise by 4.2 per cent year on year, led primarily by a 28 per cent growth in its fixed service business.
Mr. Latuja reports that Globe’s discounted cash flow goal price is P2,200 a share.
For Mercantile Shares, Mr. See: “Globe may step sideways with an uptrend bias [this] week as it pierces through its initial resistance to P2,100. The help range is between P2,050 and P2,000, whereas the resistance ranges are between P2,140 and P2,200.”