Investors’ divergent opinions on economic recovery and opportunities for Ayala Property, Inc.’s (ALI) real estate investment trust (REIT) also propelled the firm to be one of the top-traded stocks last week.
According to trading details of the Philippine Stock Exchange, there were 28.45 million shares worth P1.17 billion changing hands in the first trading week of the year.
The share price of the Ayala Group’s property arm closed at P41.55 on Friday, up by 1.6 per cent from its completion at P40.90 apiece last year.
“[T]rading of its securities was likely influenced by market fluctuations since it is a heavyweight index/sector. Shares continued to trade within a narrow range of about P40 to P42, possibly led by the prevalent indecision between local and foreign funds,” China Bank Securities Corp. Study Associate Zoren Philip A. Musngi said this in an e-mail.
Mr. Musngi said that there is already uncertainty around year-on-year improvement prospects in the face of continuing pandemic concerns.
Diversified Shares, Inc., in a mobile call. Equity Trader Aniceto K. Pangan saw ALI’s operation as “something of a daily strong scale” of the firm, partially because of the optimistic optimism about the market prospects of its parent company, conglomerate Ayala Corp., which last week reported higher capital expenditure for the year at P182 billion compared to P157 billion programmed for 2020.
Analysts have noticed the potential increased revenue for ALI from the purchase by AREIT, Inc. of 9,8 hectares of land held by Technopark Land, Inc. on Wednesday.
“The acquisition enables ALI to share in the leasing income that will be created by its stake in AREIT,” said Mr. Musngi, who said that ALI has a 54% stake in AREIT.
“With IMI as a lessee, its additional income would become more secure,” said Mr. Pangan, referring to the electronics maker Integrated Micro-Electronics, Inc., which will lease four parcels of land for the next seven years.
AREIT claimed in its disclosure that the purchase would contribute to its sales generation beginning this month and would boost the company’s capital appreciation potential. It bought the property in Laguna Technopark by way of an act of sale amounting to P1.1 billion, including value-added tax.
The 471-hectare Laguna Technopark encompasses areas of Bignan and Sta. Rosa, Laguna, is a subsidiary of ALI, AyalaLand Logistics Holdings Corp.
“Barring any second wave infection, the property sector would certainly perform better this year, relative to last year,” Pangan said.
“With this situation, Ayala Land is expected to return to the growth curve this year, in particular by improving customer behaviour and mobility as seen with ease in restrictions. The roll-out of a variety of COVID-19 vaccinations would further aim to curb the pandemic,” the trader said.
“However, there is still some confusion as to when the Philippines will be able to buy vaccinations and how easily we will start a vaccination campaign,” said Mr. Musngi of China Bank Securities.
He also said that confidence in the property market, in general, is offset by the likelihood of stricter quarantine restrictions owing to outbreaks of the current COVID-19 strain in many countries.
ALI’s consolidated gross sales almost halved to P63.32 billion in the nine months leading up to September, with the pandemic restricting property developers’ market activities. Similarly, its attributable net profits declined by 72.6 per cent to P6.37 billion in the same era.
In the coming weeks, Mr. Musngi glued ALI’s help and opposition to P40 and P42, respectively.