AYALA-LED ACEN Corp. shares rose last week after announcements of US asset acquisition and Morgan Stanley Capital International (MSCI) rebalancing.
Data from the Philippine Stock Exchange (PSE) showed a total of 313.75 million ACEN shares worth P1.58 billion were traded from May 13 to 17.
Shares closed at P4.9 apiece last Friday, up 8.6% from its P4.51 close on May 10.
Year to date, the stock rose by 11.9%.
In a disclosure on Monday, the listed energy company announced the approval of its acquisition of a 165.6-megawatt wind energy project in Shackelford County, Texas, USA.
The acquisition is still subject to the finalization of commercial terms, fulfillment of agreed-upon conditions, and execution of definitive documentation.
Arielle Anne D. Santos, equity analyst at Regina Capital Development Corp., said in an e-mail that the disclosure affected ACEN’s stock performance, as the acquisition aligns with the company’s goal to establish itself in international markets and expand into the renewable energy sector.
“The market reacted positively to this news, reflecting investor confidence in the company’s growth trajectory and its ability to execute large-scale, high-potential projects,” she added.
Jervin De Celis, equity trader at Timson Securities, Inc., said in a separate e-mail that the impact of the announcement might be seen in the stock’s future price movement. He added that the acquisition could lead to ACEN’s strengthened presence in the US renewable energy sector, a prospect that could be attractive to investors.
The transaction will be made by UPC Power Solutions LLC, the US joint venture company of ACEN USA LCC, along with PivotGen and UPC Wind and Solar Investments, LLC.
Meanwhile, it was announced that ACEN is one of 233 additions in MSCI’s Small Cap Index, an index designed to measure the performance of small-cap stocks. This rebalancing is set to be implemented on May 31, 2024.
The MSCI rebalancing played a crucial role in ACEN’s stock performance, Ms. Santos said.
“The inclusion or exclusion of a stock in the MSCI index can significantly impact investor sentiment, as it directly affects the stock’s exposure to global investment funds tracking the index. Investors typically position themselves in stocks slated for inclusion prior to the implementation date, anticipating further price appreciation upon inclusion,” she said.
“Inclusion in the index generally brings positive attention and attracts investments from foreign investors. Being added to the index typically sends the stock price of a company higher,” Mr. De Celis likewise said.
Foreign investors have been interested in ACEN shares as of late, possibly because of the earnings announced made by the company earlier in the month, he said.
In the first quarter of the year, the company’s attributable net income grew by 34.3% to P2.72 billion from P2.03 billion in the same period the previous year.
Ms. Santos said they expect increase in profitability in the second quarter brought by new high revenue projects and strategic acquisitions.
“ACEN’s focus on renewable energy is likely to yield strong financial results given the growing demand and favorable regulatory environment for green energy initiatives,” she added.
Early this week, she expects the stock price to decline as the stock remains in the “overbought region.”
Ms. Santos placed her support level at P4.56 and resistance at P5.28.
Mr. De Celis sees support in the P4.60-P5.00 range and resistance in the P5.20-P5.30 range. — Karis Kasarinlan Paolo D. Mendoza
