Negative market sentiment drags down AC Energy stock

AC ENERGY Corp. (ACEN) was the sixth most actively traded stock last week, with analysts attributing the movement to overall negative market sentiment as coronavirus cases rise, offsetting positive developments on the stock such as news of a Singapore firm’s investment into the company.

Data from the Philippine Stock Exchange (PSE) showed a total of 205.86 million shares worth P1.41 billion being traded from March 8 to 12.

ACEN shares closed at P7.1 on Friday, down 0.6% from P7.14 a week ago. Year to date, the stock’s share price has gone down by 30.4%.

“ACEN’S movement [last] week was affected by the broader market’s downward move [last] week, as investors felt cautious over the surging COVID-19 (coronavirus disease 2019) cases in the country, as well as the inflation concerns being experienced across the globe,” Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan said in a Viber message.

“Sentiment was weak, but bargain hunters managed to pick up ACEN shares towards the latter part of the week,” he added.

New COVID-19 cases per day have increased by an average of 3,000 last week — a trend not observed since September. On Saturday, new cases reached 5,000 based on figures released by the Department of Health.

Last week saw the stock’s closing price go down for the first two trading days before rebounding to the next three days.

Meanwhile, the PSE index (PSEi) closed at 6,728.55 last Friday, 152.82 points or 2.2% lower on a week-on-week basis.

In a separate Viber message, UPCC Securities Corp. Equities Trader Aristotle D. Reyes, Jr. noted company-specific developments such as the release of its earnings report and the details on the investment of an affiliate of Singapore firm GIC Pte. Ltd. for a 17.5% ownership stake in the Ayala-led firm.

“[M]ost investors already know about it, so it did not affect the price that much,” he said.

In a regulatory filing last Wednesday, ACEN said that Arran Investment Pte. Ltd. would be subscribing to four billion primary shares through a private placement at P2.97 apiece, totaling P11.88 billion.

The deal is subject to pre-closing conditions, namely: ACEN’s completion of its stock rights offering of 2.27 billion shares at P2.37 apiece; and the issuance by the Treasurer of the Commonwealth of Australia — or his delegate — of a notice of no objection under the Foreign Acquisitions and Takeovers Act 1975 with respect to Arran and the AC Energy and Infrastructure Corp. “international transaction.”

“Over the short term, the reports about the P12-billion investment from Arran Investment Pte. Ltd in ACEN may have not significantly affected the price movement of the issue, but over the long term, ACEN believes that the private placement will help them raise additional capital for its various projects and acquisitions, as well as repay some of its debt,” Timson Securities’ Mr. Pangan said.

“ACEN still seems to be in a sideways movement, which may be due to investors having already priced in the [full-year 2020] income results when it outperformed the [PSEi] last year,” he said.

ACEN posted an attributable net income of P3.75 billion last year, up 65 times from P57.65 million in 2019, based on the company’s financial statements disclosed to the stock exchange last Tuesday.

“For the coming weeks, I can see ACEN to still trade at a range since the market is really waiting for the follow-on offering price. [I am] placing support at P6.5 and P8 as the resistance,” UPCC Securities’ Mr. Reyes said.

For Timson Securities’ Mr. Pangan: “ACEN has been consolidating ever since the year started, with support lying at the P6.00 area, and immediate resistance around the P8.00 level. We see the stock consolidating within this area until stronger catalysts come into play for the company.” — Marissa Mae M. Ramos