Outlier

AYALA Land, Inc. (ALI) was the most actively traded stock last week as investors continued to take cues from the developer’s “good” second-quarter earnings, and the launch of its P16.1-billion office-for-sale project in Quezon City.

A total of P2.37 billion worth of 48.57 million shares were traded from Aug. 19-23, data from the Philippine Stock Exchange (PSE) showed.

Shares closed at P48.90 apiece on Friday, down P0.25 or 0.51% from the previous day and 0.71% week on week from the P49.25 finish on Aug. 16. For the year, the stock gained 18.40%.

“We think that one key factor in this is the good earnings result of [ALI] posting growth on all of its business segments such as real estate, retail mall space and the office leasing,” Philstocks Financial, Inc. Client Engagement Officer and Research Associate Piper Chaucer E. Tan said in an e-mail.

For the second quarter, ALI’s net income attributable to equity holders grew 11.6% to P7.834 billion, bringing the first half figure to P15.157 billion, up 12% year on year.

“[I]n terms of valuation, [Ayala Land] is cheaper and that is also a factor based on its earnings results,” Mr. Tan said, adding that while there was net foreign selling on the stock, local investors took advantage.

For Unicapital Securities, Inc. technical analyst Cristopher Adrian T. San Pedro, the launch of One Vertis Plaza in Quezon City contributed to the stock’s movement. The project is Ayala Land Premier’s (ALP) first office-for-sale project.

“The news generated positive investor sentiment as it contributed to the bounce of the stock from the low of P46.30 per share (Aug. 13) to as high as P48.45 per share (Aug. 16),” he said.

ALP said last Aug. 16 that it has already sold 65% of the 43-storey office tower, or about P10.6 billion. The average selling price of each square meter (sq.m.) has risen 20% to P352,000 by August, from its launch price of P269,000 per sq.m. in June 2018. With office spaces ranging from 101 to 325 sq.m., each unit costs about P28 million to P114 million.

Construction for One Vertis Plaza is now ongoing, with target completion by the second quarter of 2024.

“[ALI is expected] to deliver such projects coming from its very aggressive landbanking and expansion in the National Capital Region (NCR) and increasing its footprint in areas outside NCR, and this may add to the increasing office portfolio for ALI,” Mr. Tan said.

However, the overall property market sentiment is weakening as China intensifies its crackdown on cross-border gambling of its citizens.

“The POGO (Phlippine offshore gaming operators) crackdown is hurting the overall investor sentiment on the property sector,” Mr. San Pedro said.

The Philippine Amusement and Gaming Corp. (PAGCOR) suspended acceptance of applications for offshore gaming licenses pending a review of the operations of POGOs. China’s foreign ministry spokesman Geng Shuang said the country hoped that the Philippines “will go further and ban all online gambling.”

But for Mr. Tan, however, this development had little to no impact on ALI.

“One thing that we noticed [is] that despite the news on POGO crackdown, there is really much no effect on [ALI] due to the fact [that ALI] is limiting its exposure to POGOs even before the boom of this industry to just 10% of its office leasing portfolio.”

For this year, Mr. San Pedro expects ALI’s net income to reach P34 billion driven by robust growth in its commercial leasing segment. He identified three risks to this outlook, namely the increase in mortgage rates, project delays that might “hurt the stream of residential revenues,” and “government regulatory constraints.”

Meanwhile, Mr. Tan gave a lower full-year net income forecast at P33.2 billion. He sees the stock’s primary and secondary support at P47.5 and P46, respectively, and resistance at P51.7-P52 level and the secondary resistance at P53.85.

Mr. San Pedro said ALI stock is expected to consolidate between P46.00 and P49.50 levels “with a bearish bias as long as it stays below P50.00 in the short term.”

“There is also a risk of a bearish head and shoulder pattern which could trigger the stock to test the next support levels at P44 and P45,” he said. — Christine Joyce S. Castañeda

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