Ayala share price rises as investors pick bargains

AYALA CORP.’S stock price gained last week as investors bargain-hunted after four consecutive weeks of net selling from foreign market participants.

Data from the Philippine Stock Exchange (PSE) showed a total of P697.57 million worth of 1.17 million shares were traded from Aug. 22 to 25, making it the sixth most actively traded stock last week.

Ayala’s share price went up by 1.4% week on week to P598 apiece last Friday. For the year, however, the stock dropped by 14%.

“[Ayala’s] share price went up for the week due to bargain-hunting activities after the stock declined week-on-week for the past four consecutive weeks,” RCBC Securities, Inc. Equity Research Analyst John Renz S. Alvarado said in an e-mail note.

Globalinks Securities and Stocks, Inc. Senior Trader Mark V. Santarina said in a Viber message that he saw foreign selling from foreign investors of Ayala’s stock for the past few weeks that pushed its stock price downward. The decline led to investors capitalizing last week after the selling activity lost its momentum.

“Another potential factor influencing this price movement is the recent announcement regarding the collaboration between Ayala Corp., 917Ventures, and Gogoro Network. This partnership focuses on the development of two-wheeled EV swapping technology, which has likely contributed to market dynamics,” he added.

Mr. Alvarado said the news of Ayala’s sale to MT Technologies GmbH (MT) of its stake in AC Industrial Technology Holdings, Inc. had no significant impact on market players from buying the stock as the unit’s contribution to the group’s net asset value was “minimal.”

“Furthermore, the expected loss from the sale has a minimal impact (less than 1%) on its 2023 earnings,” Mr. Alvarado added.

Additionally, analysts said Ayala’s wide range of businesses reporting positive earnings secured the holding company’s growth trajectory for the year, but downside pressures persisted as its stock price was still affected by the broader market sentiment.

Ayala’s consolidated revenues rose by 19% to P85.27 billion in the second quarter, bringing its top line in the first half growing by 19.3% to P164.24 billion.

However, its attributable income in the April-to-June quarter dipped by 3.2% to P8.19 billion from P8.46 billion in the same period last year.

In the first semester, net income attributable to the owners of the parent company inched up by 13.2% to P18.41 billion from P16.27 billion a year ago.

Mr. Santarina estimated the stock to earn P13 billion on its third-quarter net income.

For the week, RCBC’s Mr. Alvarado gave his support and resistance levels at P575 and P635, respectively.

Globalinks’ Mr. Santarina placed his support and resistance levels at P575 and P629, respectively, anticipating a rebound for the stock this week.

“However, the persistence of foreign selling might result in further sideways trading for the stock. Another concerning factor is the subdued trading activity across the market,” he said. — Bernadette Therese M. Gadon