PROFIT taking drove much of Ayala Land, Inc.’s stock activity last week.
Ayala Land was the third most actively traded stock last week with P2.47-billion worth of 67.37 million shares having exchanged hands on the trading floor during the week from June 14 to 18, data from the Philippine Stock Exchange (PSE) showed.
Ayala Land shares closed at P36 apiece on Friday, down 6% from the June 11 close of P38.3 per share. Year to date, the stock has gone down by 14.3%.
“Ayala Land declined as selling pressure picked up due to profit taking. It has gained 23% in the last four consecutive weeks, said AAA Southeast Equities, Inc. Head of Research Christopher John A. Mangun in an e-mail.
Regina Capital Development Corp. Equity Analyst Anna Corenne M. Agravio shared a similar assessment: “Ayala Land’s fundamentals are solid despite the pandemic-related shocks to profit, so the recent selldown was likely caused by a technical correction. Naturally, a lot of investors would secure their profits after continuous week-on-week gains,” she said in a separate e-mail.
Ms. Agravio noted news of property firms’ plans of listing of their REITs (real estate investment trust) did little to affect Ayala Land’s share price as the property subindex was sold down during the latter half of last week.
REITs allow investors to earn dividends from specific revenue-generating properties of developers. There are currently five real estate firms that look to tap REITs for raising funds, with two having already been listed in the PSE — Ayala Land’s AREIT, Inc. and DoubleDragon Properties Corp.’s DDMP REIT, Inc.
Last week saw Megaworld Corp. announce putting 10 of its office, retail, and hotel assets into a REIT that looks to sell up to P27.3-billion worth of shares in an initial public offering.
A week earlier, Ayala Land has executed the deed of exchange for the property-for-share swap transaction with AREIT, Inc. The transaction will issue Ayala Land and its subsidiaries, Westview Commercial Ventures Corp. and Glensworth Development, Inc., 483,254,375 primary common shares of AREIT at P32 apiece in exchange for Ayala Land’s properties valued at P15.46 billion altogether. The shares will be sourced from AREIT’s authorized capital stock, which it seeks to raise to P29.5 billion from P11.74 billion, pending approval from the Securities and Exchange Commission.
The transaction will expand AREIT’s portfolio to 549,000 square meters (sq.m.) from 344,000 sq.m., as its deposited property value will also increase to P52 billion from P37 billion. This will also bump up Ayala Land’s ownership in AREIT to 66% from 50.1%.
The properties in the property-for-share swap include the following: Vertis North Commercial Development, Evotech Buildings 1 and 2, Bacolod Capitol Corporate Center, Ayala Northpoint Technohub, and office condominium units at BPI-Philam Life Buildings in Makati and Alabang.
The week of the announcement saw Ayala Land’s share price go up 5.22% on a week-on-week basis to P38.3 on June 11. It later fell by 6% to P36 per share last Friday from the previous week with most market players choosing to take profits on the stock.
Latest financial statements show Ayala Land’s attributable net income went down by 36% year on year to P2.8 billion in the first quarter, as revenues slipped by 13% to P24.6 billion.
Property development revenues fell 6% to P16.2 billion, while commercial leasing revenues slumped by 41% to P5.1 billion as operations of malls, hotels and resorts remain restricted. Residential sales reservations jumped 15% to P28.5 billion, as Ayala Land reported robust local demand.
“The biggest drag on Ayala Land is the lack of mall traffic. The easing of restrictions will definitely be positive for their retail leasing operations,” AAA Southeast Equities’ Mr. Mangun said.
For Regina Capital’s Ms. Agravio, Ayala Land is moving towards a “V-shaped” recovery.
“While its malls will still be under a lot of pressure, given the mobility restrictions related to the pandemic, its property development revenues are expected to recover more quickly. Sales reservations and launches were already up in [first quarter] on a year-on-year basis,” she said.
Ms. Agravio placed Ayala Land’s support and resistance levels at P35 and P38.3 per share, respectively.
Meanwhile, AAA Southeast Equities’ Mr. Mangun pegged the stock’s primary and secondary support price levels at P35.7 and P33.8, respectively, while its primary and secondary resistance price levels are at P38.35 and P42. — N.M.A. Bo
