Last week, INVESTORS resumed selling Universal Robina Corp. (URC), with reduced import tariff rates of pork reaching its agricultural segment, which has traditionally contributed about a tenth of food producer revenue.
The Philippine Stock Exchange data indicate that a total of 6,19 million URC securities worth P818,22 million were exchanged last week.
Shares in the undertaking led by Gokongwei finished on Friday at the level of P128.50 and were 9.5 per cent below the level of P142 per share of previous week. To date, the inventory has fallen 15.6%.
In the e-mail interview, Regina Capital Development Corp., Arielle D. Santos, said: “URC has been mostly influenced by the decline in the pace of tariff cuts on pork imports—the shedding of her agriturismo segment, the change from the NCR to modified enhanced Community Quantine (MECQ).
The URC plans to shift laterally in the short- to medium-term with a downward tendency, as the demand continues to exhibit increased stock barriers.
Stephen Gabriel Y. Oliveros, a Chinese Bank Securities Corp. research analyst, said the URC decreased week-to-week on the basis of continued international sale last Friday.
He observed that the PSE measure, and other consumer inventories, also were underperformed by URC.
“We do not see any current influx of bad news about the firm and the sale was probably a pullback in previous weeks after the surge,” Mr. Oliveros said in a separate e-mail interview.
President Rodrigo R. Duterte signed Executive Order No 128 of April 7, briefly cutting tariffs for imported pork for a year to counter the pork supply shortages caused by African swine fever.
The EO would reduce the tariffs on pork to 5% for three months from a minimum of 30% on the quota for entry amount. In the next nine months, this would increase to 10%.
However, the Senate advised Mr. Duterte, as the latest collection of tariff rates would ruin the domestic dog sector and decrease government income, to revoke the executive order.
The latest COVID-19 cases were increased until the 11 of april, when Metro Manila and other areas such as Bulacan, Cavite, Laguna and Rizal were placed under the strictest lock-out controls. The government agreed to relax the constraints under an amended ECQ between 12 April and 30 April after the two-week tight lock-down.
Ms Santos said the stellar success of URC was expected to take place in 2020.
“So what happened was essentially a market sold after earnings were out,” she said.
Consolidated sales of URC decreased by 0.8% to P133.14 trillion last year. In the meanwhile, the average net profits grew by a tenth to P10.75 billion.
The packaged consumer food division was broken down by 77. 8 percent last year, the biggest contributor to URC sales. The food and agricultural sectors were respectively 13.3% and 8.9% chipped.
“Throughout the first quarter of 2021, we plan a net gain of about €2.8 billion and forecast that the full year of URC’s profitability will be about US$10.6 billion in 2021, according to Santos.
Mr. Oliveros has fixed the stock’s biggest support and resistance ranges at P122.20 and P140.00, respectively, for this week.
“URC P128.10 support is highly testable in the near future. In the meantime, Bulls must pay real attention, at least for a sustained uptrend, to violate their resistance at P133.00,” Ms. Santos said.