By Lourdes O. Pilar
Researcher
IMPROVED investor sentiment made Ayala Corp. one of the most actively traded stock in the exchange last week after President Rodrigo R. Duterte’s apology to the Zobel brothers earlier this month.
Ayala Corp. was the fourth most actively traded stock with a total of 1.860 million shares worth P1.282 billion having exchanged hands on the trading floor during the trading week from May 11 to 15, data from the Philippine Stock Exchange showed.
Shares in Ayala Corp. closed at P670 apiece on Friday, down 4.8% on a week-on-week basis. Since the start of the year, the stock has fallen 13%.
“The upbeat momentum [last] week was driven by improved investor sentiment supported by President Rodrigo R. Duterte’s public apology after months of tirades over the company’s water concession agreement with the government,” Charlene Ericka P. Reyes, officer-in-charge of trading and research at First Resources Management and Securities Corp., said in an e-mail.
Earlier this month, Mr. Duterte apologized to the Zobel brothers and the group of Manuel V. Pangilinan for the “hurting words” he said against their companies in recent months. The apology was prompted by the businessmen’s assistance during the coronavirus disease 2019 (COVID-19) crisis.
Ayala Corp. Chairman Jaime Augusto Zobel de Ayala was among the first businessmen who responded to Mr. Duterte’s call to ease the plight of workers during the crisis.
Late last year, Mr. Duterte threatened to file economic sabotage cases against east zone concessionaire Manila Water Co., Inc., in which the Ayalas hold a 51.4% stake, and Maynilad Water Services Inc., the company led by Mr. Pangilinan’s holding firm which serves Metro Manila’s west zone and nearby provinces.
“I think among the conglomerates Ayala Corp. was the least affected with the drop in their annual and quarterly report,” said Jeff Radley C. See, analyst at Mercantile Securities Corp., in a separate e-mail.
The oldest conglomerate in the country’s net income attributable to owners of the parent company fell by 17% to P6.66 billion during the first three months of 2020 from P8.03 billion in the same period reported a year ago as the COVID-19 pandemic pulled down its property, banking and industrial business segments.
“Looking forward, the company will be regaining its momentum once operation will be back to normal starting end of second quarter. The move by Ayala Corp. to focus on other companies such as hospital and energy was a good move since those industries are the ones resilient to this pandemic,” Mr. See said.
“What we expect with Ayala Corp. is to map out a new normal direction to survive for now due to the volatile situation caused by COVID-19,” Summit Securities, Inc. President Harry G. Liu said in a Viber message.
First Resources’ Ms. Reyes, meanwhile, expects weaker earnings for the second quarter attributed to a longer enhanced community quarantine implementation.
“With the diversified business of Ayala Corp., the coronavirus pandemic is expected to drag its earnings performance with (1) decreased rental income and lower foot traffic from its malls, and hotels; (2) decreased recurring income from its office business segment; (3) lower residential sales and delayed project launches this year; and (4) large loan loss provisions for its banking segment tempering its bottom line,” Ms. Reyes said.
This week, Ms. Reyes gave Ayala Corp. an immediate support level at P660 followed by the next-level support at P600 with an immediate resistance at P709, followed by a resistance at P762.
For Mr. See, he pegged the stock’s support levels at P675, P600, and P507, while resistance levels are at P705, P750, and P856.
Summit Securities’ Mr. Liu placed Ayala Corp.’s support between P550 and P600 and resistance between P700 and P750.
