Investors cheer possible Meralco franchise renewal

Strong investor confidence lifted the stocks of Manila Electric Co.(Meralco) after the House of Representatives passed on second reading the bill extending the company's franchise for another 25 years, according to analysts.

- BRIX LELIS

Meralco's share price maintained its momentum, rising by 1.34 percent to close at P455 apiece yesterday.

Analysts interviewed by The STAR attributed the positive investor sentiment to the latest development in Meralco's legislative franchise renewal.

House Bill 10926, which seeks to extend Meralco's operation, was approved by a voice vote last Tuesday.

Once enacted into law, the power distribution giant is expected to provide electric service to its franchise coverage until 2053.

"An approval will ensure the continuation and stability, which can lead to increased investor confidence," AB Capital Securities Inc. vice president Jovis Vistan said.

Cristina Ulang, head of research at First Metro Investment Corp., said the possible franchise renewal is a "strong vote of confidence on the Meralco brand." The current franchise of Meralco is set to expire in 2028.