Ayala Corp. share price down amid macro headwinds

AYALA CORP. was among the most actively traded stocks last week amid macro headwinds and foreign fund outflows.

The holding company was the fifth most actively traded stock, with 2.25 million shares worth P1.09 billion changing hands from Sept. 29 to Oct. 3, data from the Philippine Stock Exchange (PSE) showed.

At the end of the trading week, Ayala Corp. closed at P490 per share, down by 1% from the previous Friday’s P495 finish. The decline was a reversal compared with the 1.1% gain of the holding firms index and the 1.4% rise of the benchmark Philippine Stock Exchange index (PSEi).

Year to date, the stock has dropped by 18.2%, reflecting the holding firms index’s 11.9% decline and the PSEi’s 6.4% slide.

Inzaghi Rafael D. Cabacungan, research associate at China Bank Securities Corp., said in an e-mail that Ayala Corp.’s share price declined week on week, weighed down by global macro headwinds that dampened investor sentiment and by foreign fund outflows from the broader market.

“One of the macro headwinds is the continuing uncertainty around the trajectory of US Federal Reserve (US Fed) policy rate cuts, especially beyond 2025,” Mr. Cabacungan said.

The US Fed’s policy committee will meet next on Oct. 28 and 29, with investors expecting the Federal Open Market Committee to reduce the US Fed funds rate by a quarter of a percentage point to a range of 3.75% to 4%. This would mark the lowest level since December 2022. The US Fed cut its key rate in September for the first time since December 2022.

A Reuters report said investors withdrew large amounts of capital from US equity funds as they turned cautious about lofty valuations following the recent rally and rushed to lock in profits.

According to London Stock Exchange Group plc’s Lipper data, investors pulled out $43.19 billion from US equity funds during the week, the largest weekly outflow since mid-December 2024.

Locally, the Monetary Board is set to hold its last two meetings for the year on Oct. 9 and Dec. 11. On Aug. 28, the Bangko Sentral ng Pilipinas lowered borrowing rates by 25 basis points (bps) to 5%. It has so far reduced policy rates by a total of 150 bps under the current easing cycle.

AYALA’S HONDA EXIT
“The transitioning of dealership operations should positively affect Ayala Corp.’s bottomline as this should support the growth of the company especially with the increase in capital expenditure,” Aniceto K. Pangan, trader at Diversified Securities, Inc., said in a Viber message, referring to ACMobility’s exit from the Honda dealership.

In a disclosure last week, Ayala Corp.’s ACMobility announced that it will stop selling Honda vehicles starting next year as it shifts its focus to electric vehicles under China’s BYD brand.

“ACMobility will begin turning over management and operations of these dealerships to new dealer principals towards the end of this year, the specifics of which will be announced by Honda Cars Philippines,” the statement said.

Mr. Cabacungan added that developments involving ACMobility and Honda Cars Philippines, Inc. had little effect on Ayala Corp.’s share price.

“It is worth noting, however, that such a move aligns with their focus on its dealerships with BYD and Kia, and their broader push to solidify their presence in the electric vehicles space,” he said.

PARTNERSHIP WITH SPINNEYS
In separate news, Ayala Corp. and United Arab Emirates-based supermarket chain Spinneys have entered into a partnership to open stores in the Philippines.

“We think Ayala Corp.’s new partnership with Spinneys reinforces their push to increase their exposure to the resilient local retail sector. This aligns with their recent partnership to bring back grocery chain Makro to the Philippines and their store network expansion for Anko,” Mr. Cabacungan said.

“Spinneys joint venture will further boost its retail segment with the success of its township projects. With the country’s favorable demographic profile, this will create synergies with its real estate business and further support its growth momentum,” Mr. Pangan said.

Spinneys is owned by Al Seer Group, a UAE-based consumer holdings company with interests in food, retail, hospitality, shipbuilding, and construction across more than 20 countries.

Ayala’s consolidated revenues fell by 2.3% to P90.52 billion in the second quarter, bringing its first-half total to P183.5 billion, up by 2% year on year.

The conglomerate’s attributable income in the April-to-June period rose by 16.8% to P10.76 billion from P9.21 billion a year earlier.

In the first half, net income attributable to the parent company inched up by 4.8% to P23.36 billion from P22.29 billion last year.

Mr. Cabacungan sees Ayala Corp.’s immediate support at P475-P480 per share, while resistance is at P508-P510.

Mr. Pangan pegged support at P476 apiece and resistance at P520. — Lourdes O. Pilar