AYALA CORP. shares dipped due to bearish market sentiment as investors continue to monitor the Russia-Ukraine conflict and its impact on surging oil prices.

Data from the Philippine Stock Exchange showed a total of 2.83 million Ayala Corp. shares worth P2.21 billion exchanged hands from March 14 to 18, making it the seventh most actively traded in the stock market last week.

Shares in the conglomerate finished at P788.00 apiece on Friday, down by 1.6% week on week. Year to date, the stock’s price fell by 5.4%.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan attributed the week’s performance to volatility due to investors closely monitoring geopolitical tensions and their impact on global oil prices, inflation, and the country’s economic growth.

“AC’s share price movement during the week was more of a reflection of investor sentiment amid said geopolitical tensions rather than something specific to just the company itself,” he said in an e-mail interview, referring to the company’s ticker symbol.

But a lot of investors turned to the stock during the week as its recent earnings report prompted a relatively wider trading range, Mr. Limlingan said.

“The earnings report also reinforced investors’ belief that AC is a fundamentally sound company that has strong potential for growth in the future,” he said.

Market players had a bearish market sentiment in the beginning of the week caused by inflation fears amid the surging oil prices, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in an e-mail.

“I believe these are what pulled AC’s share price down by [last] week’s start. There has been some bargain hunting in the next two days. However, by the end of the trading week, bearish general market sentiment resurfaced amid the lack of significant progress in the Russia-Ukraine talks. This pulled AC to a negative close for the week.”

He said that the conglomerate’s net income did surge but one-off gains played a significant role in this.

In a disclosure last March 11, Ayala Corp. reported a 62% growth in net profit to P27.8 billion last year, primarily driven by higher earnings from its businesses such as banking, property, telecommunications, and energy, along with one-time gains.

Its core net income, which excludes one-off gains, decreased by a tenth to P23.5 billion, brought by Bank of the Philippine Islands’ narrower net interest income, Globe Telecom, Inc.’s higher depreciation expenses, and reduced stake in AC Energy Corp.

In the final three months of last year, its bottom line rose 46% year on year to P23.5 billion.

In late February, Russia invaded Ukraine, sending shockwaves to world markets. Russia is the second largest producer of crude oil after Saudi Arabia.

The conflict sent international benchmark Brent crude surging past $100 per barrel, a level not seen since 2014.

Recent reports say there is progress in the talks between Ukraine and Russia.

President Volodymyr Zelensky of Ukraine said their negotiations have become more realistic since the war began three weeks ago, Reuters reported.

Russian President Vladimir Putin, on the other hand, said they are willing to discuss a neutral status with Ukraine.

This year, Mr. Tantiangco projects Ayala Corp.’s bottom line to increase by 10%.

“We’re expecting robust financial performance from its segments, (with the reopening the economy) primarily from its property, banking, telecommunications, and energy segment.”

Mr. Limlingan expects Ayala Corp.’s earnings this year to range from P28 billion to P35 billion, with the first quarter ranging between P7 billion and P8.75 billion.

“Any updates regarding its operations during the reopening of the economy and whether or not it is already back to pre-pandemic levels could make an impact on its share price, as this is what investors are looking for right now,” Mr. Limlingan said.

He placed the stock’s support at P750.00 this week, while its resistance at P825.00 and P850.00.

For Mr. Tantiangco, a recovery in Ayala Corp.’s core net income in the first quarter of 2022 may entice investors to look into the company.

“In the short run, improvements in the general market condition could entice market players to look into AC. This includes positive developments in our current narratives such as progress in the Russia-Ukraine talks, and a waning of inflation concerns.”

He placed Ayala Corp.’s support to range P690.00 to P710.00 while its resistance between P800.00 and P820.00. — Abigail Marie P. Yraola with Reuters