Vaccine news, regulatory approval of energy JV deal lift Ayala stocks

AYALA CORP. was among the most actively traded stocks last week, with traders and investors taking their cue from news of the country’s first supply agreement for a potential vaccine for the coronavirus disease 2019 (COVID-19) that lifted market sentiment as well as the Philippine Competition Commission’s (PCC) approval of the joint venture (JV) between Ayala-led subsidiary AC Energy Philippines, Inc. and the Philippine energy unit of Japan-based Marubeni Corp. that is looking to build a diesel-fired plant in Rizal province.

Data from the Philippine Stock Exchange showed a total of P1.46 billion worth of 1.73 million Ayala Corp. shares being exchanged between Dec. 1 and 4, making it the seventh most actively traded stock during the period.

Shares in the conglomerate closed P864.5 apiece last Friday, up five percent from a week ago. Year to date, the stock has gained 12.3%.

“Vaccines were the top news for the past two weeks that helped the market recover, especially Ayala Corp.,” Mercantile Securities Corp. Analyst Jeff Radley C. See said in an e-mail.

Mr. See also pointed to the PCC’s recent approval of the joint development of a diesel-fired plant in Rizal province between Ayala subsidiary AC Energy Philippines and Marubeni subsidiary Axia Power Holdings Philippines Corp., which he said encouraged investors to take positions on the stock last week.

RCBC Securities, Inc. Equity Analyst Daphne T. Yang noted in a separate email that the stock recovered after being sold down since Nov. 18.

“The stock fell from P865.50 to P823.50 over seven days, so bargain-hunting followed,” Ms. Yang said.

In a tripartite agreement between the government, the private sector, and the UK-based drugmaker AstraZeneca Plc last month, the Philippines secured around 2.6 million doses of COVID-19 vaccine with a ₱600-million donation from over 30 companies in the country. It is also in talks with other drugmakers.

The procured vaccines will be deployed by the Department of Health and administered to government frontline workers and private-sector employees. Two doses of the vaccine are expected to cost around P500 or $10.

Meanwhile, AC Energy told the bourse on Wednesday that the PCC approved the joint venture with Marubeni through Axia Power Holdings Philippines for a diesel-fired plant in Rizal, saying it will not substantially affect competition in the industry.

The company signed in July a shareholders’ deal with Axia, which will buy half of both shares and economic rights in Ingrid Power Holdings, Inc., the Ayala unit’s corporate vehicle for the 150-megawatt Ingrid diesel-fueled power plant project in Pililla, Rizal.

The plant is expected to supply peaking and reserve power to the Luzon grid by the first quarter of 2021.

“[Ayala Corp.] has been focusing more on its energy arm. They had been expanding its portfolio and increasing its exposure to renewable energy. Hopefully, we can see improvement on their financials next year,” Mercantile Securities’ Mr. See said.

Ayala logged a 58.9% decline in its attributable net income in the third quarter of the year to P3.42 billion from P8.32 billion in the same period last year. The decline was attributed to the double-digit drops in incomes from its core businesses, such as its property, banking, and telco segments.

For the coming weeks, Mr. See said Ayala stocks may move in a range between P800 and P880 apiece. — Marissa Mae M. Ramos