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Ayala Land gets lift after hiking stake in Laguna park

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Outlier

By Marissa Mae M. Ramos
Researcher

INVESTORS SNAPPED up Ayala Land, Inc. (ALI) shares last week following the disclosure of the developer’s plans to consolidate its interest in Prime Orion Philippines, Inc. (POPI) through Laguna Technopark, Inc. (LTI).

The property arm of the Ayala group was the second most actively traded stock in terms of value turnover. A total of P1.601 billion worth of 35.559 million shares were exchanged in the trading floor from Feb. 4-8, according to data from the Philippine Stock Exchange (PSE).

ALI’s share price closed at P45 apiece on Friday, 0.11% higher than its share price of P44.95 when the market closed the previous week.

Year to date, ALI’s share price rose by 8.96% from P41.30 on the first trading day of 2019.

“Ayala Land had been actively traded in the past week due to the news about its acquisition of shares in Laguna Technopark, Inc. (LTI) equivalent to 20% equity interest (previously owned by Mitsubishi Corp.) with a value of P800 million…” said Cristopher Adrian T. San Pedro, certified securities representative at Unicapital Securities, Inc.




ALI said it will then exchange the 20% equity interest in LTI for additional shares of stock in POPI consisting of 323.89 million common shares.

“This will strengthen POPI’s vision to be the leading real estate logistics and industrial estate developer and operator in the Philippines,” ALI said in the disclosure.

Charlene Ericka P. Reyes, officer-in-charge of trading and research at First Resources Management and Securities Corp., said the property giant sees the “strong potential” of POPI, which is expected to “complement ALI’s business strategies and may soon be one of the core contributors in the company’s income.”

“Meanwhile, I think the scheduled earnings release of the company is also much awaited by investors which contributed as well to the sentiment towards Ayala Land,” she added.

ALI first acquired Prime Orion in 2015 with an initial stake of 51.36%. In March 2018, the former increased its direct ownership of the latter to 63.9%.

Prime Orion is involved in real estate and property development. Aside from LTI, companies under Prime Orion include: Tutuban Properties, Inc., Ecozone Power Management, Inc., LCI Commercial Ventures, Inc., Orion Land, Inc., Orion Property Development, Inc., and FLT Prime Insurance Corp.

“Looking at the charts, the stock remains bullish with support at P42.85 and resistance at P45.75 with the possibility of testing P46.00 and P47.50 if it stays above P44.00 in the short term,” Mr. San Pedro said.

First Resources’ Ms. Reyes said she sees P44.40 as the first support level, and P43.20 as the next support level. “On the other hand, our first level resistance is at P45.70 [and] the next resistance is at P46.50,” she added.

ALI reported its net income attributable to parent climbed 17% to P20.78 billion in the January to September period, as gross revenues went up 21% to P119.68 billion.

“[Ayala Land] remains to have a solid recurring income base despite the threat of inflation and high interest rates last year,” Unicap’s Mr. San Pedro said.

In the medium to long term, he cited “influx of local and foreign residents for its residential and office space rentals, inflation and interest rate expectations, and the dollar-peso exchange rate” as key factors that might affect ALI’s performance at the bourse.