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Better net earnings boost Ayala-led BPI’s share price

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By Lourdes O. Pilar
Researcher

AYALA-LED Bank of the Philippine Islands (BPI) was among the most actively traded stock last week as investors take cue from the lender’s good third-quarter earnings.

A total of P1.292 billion worth of 13.715 million shares were traded from Oct. 14–18, data from the Philippine Stock Exchange (PSE) showed. For the week, BPI was the fourth-most actively traded.

Shares closed at P95.1 apiece on Friday, up 0.11% from the previous day and 2.31% week on week from the P92.95 finish on Oct. 11. For the year, the stock gained 1.17%.

“BPI was one of the firsts to make public their [third-quarter] and [nine-month to September] results, setting a positive tone to the earnings cycle. This could be one reason,” said Philstocks Financial, Inc. Research Head Justino B. Calaycay, Jr. in an e-mail.

In a separate email, Unicapital Securities, Inc. technical analyst Jeff Radley C. See noted BPI’s “outstanding” results in the third quarter.




“The company continued its upward trajectory, posting a 38.6% increase in their net income for the third quarter,” Mr. See said.

“BPI continues to exceed our expectation as the company continues to surpass its financials,” he added.

In a disclosure to the PSE, BPI reported an P8.29-billion net income in the July to August period, up 38.6% from its profit in the comparable year-ago period. This brought the bank’s bottom line for the first nine months to P22.03 billion, a 29.5% gain from the P17.01 billion observed the previous year.

Total revenues for the nine-month period increased by 24.8% to P71 billion, buoyed by the 19.8% year-on-year jump in net interest income to P48.66 billion.

Operating expenses stood at P37.09 billion in the nine-month period, rising by 15.6% year-on-year.

BPI’s cost-to-income ratio, which is the measure of the operating costs relative to operating income, stood at 52.2% at end-September, down from 56.4% in the same period last year. A lower cost-to-income ratio suggests a firm is being run more efficiently.

Philstocks’ Mr. Calaycay said that despite the fourth quarter being a boon for banking shares historically, interest in the BPI stock “may be tempered going forward as the limited funds going around the market at the moment looks to other entities reporting for the same period.”

For Unicapital’s Mr. See: “The stock is currently trading at the resistance area between P94–P95 per share.”

“It might continue to trend up further due to the momentum. Next stop would be between P100 to P101,” he said.

Mr. See placed the stock’s support levels at P93 and P90. Meanwhile, resistance levels are pegged at P100, P105, and P113.









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