Shares of Jollibee Foods Corp. surged the most in over four years on Thursday after the Philippines’ top restaurant operator secured the bourse’s approval to remove a 40% cap on foreign ownership of the company.
The stock jumped as much as 8.9%, its largest intraday rise since October 2020. It led gainers among large-cap Philippine stocks and outpaced the benchmark index.
The fastfood chain, known for dishes like fried chicken and sweet spaghetti, said the Philippine Stock Exchange has approved its request which is in line with changes in its articles of incorporation that removes its ability to own, acquire or mortgage land.
“Nothing like that,” Cossette Palomar, assistant vice president for investor relations of Jollibee, said in a mobile-phone message, when asked if the move means a foreign entity entering the company in a big way is imminent. The Philippine Constitution only allows up to 40% foreign ownership of private land.
Analysts said the amendment will allow more foreign participation in Jollibee, which outsells McDonald’s Corp. and Yum! Brands Inc.’s KFC in the Philippines.
“This could make the stock more attractive for foreign funds who were previously concerned about the ownership limit,” Francis Subido, said senior analyst at Philippine National Bank. It also positions the company for future inclusion with investment indices like MSCI, which consider foreign ownership as a factor, he added.
Foreigners could boost demand for Jollibee’s shares and lift the stock price moving forward, said Japhet Tantiangco, analyst at Philstocks Financial Inc.
In May last year, the company’s board amended its articles of incorporation, removing the ability to directly own real properties, but still retaining the ability to invest in property firms.
Apart from expanding its Jollibee brand outlets, the company has made acquisitions in recent years. It took over South Korea’s Compose Coffee for $340 million in July, following investments in a Taiwan milk tea brand in 2021 and the $350 million purchase of Los Angeles-based Coffee Bean and Tea Leaf in 2019.
