INVESTORS took positions on Ayala Corp.’s stock last week after the release of its third-quarter earnings results.
Ayala was the seventh most actively traded stock last week with a total of 1.06 million shares worth P668.72 million having exchanged hands from Nov. 13 to 17, data from the Philippine Stock Exchange showed.
Its shares closed at P647 apiece on Friday, down 3.2% week on week. Since the start of the year, the stock has fallen 6.9%.
Philippine National Bank Equity Research Department Head Jonathan J. Latuja said in an e-mail that earnings added to Ayala’s active trading last week.
“Ayala Corp.’s third-quarter net income performance beat estimates and was a major cause of excitement for investors, especially its banking and property subsidiaries which largely contributed to the conglomerate’s better-than-expected results during the period,” he said.
Rachelleen A. Rodriguez, research analyst at Maybank Investment Banking Group-Philippines, said in an e-mail that strong earnings attributed to stocks active trading last week.
She said Ayala’s 35% year-on-year growth in third-quarter earnings was ahead of consensus estimates.
“Robust earnings were driven by its property and banking subsidiaries Ayala Land, Inc. (ALI), and Bank of the Philippine Islands (BPI). Its power subsidiary ACEN Corp., meanwhile, booked one-off gains from value realization from the sale of a stake in Salak and Darajat and other remeasurement gains totaling P2.5 billion,” said Ms. Rodriguez.
“Overall market liquidity actually improved given better-than-expected gross domestic product and lower-than-expected inflation print in the Philippines, further supported by the lower-than-expected United States (US) inflation which, in our view, reduces the chance of the US Federal Reserve having another rate hike,” she added.
Preliminary data from the Philippine Statistics Authority (PSA) showed the economy in the third quarter expanded by 5.9%, higher than the 4.3% expansion in the previous quarter.
Recovery in government expenditures drove the country’s economic performance. The expansion ended three consecutive quarters of slowing growth.
For the nine months through September, economic growth averaged 5.5%, still below the government’s 6-7% full-year target.
In a separate PSA report, headline inflation in October slowed to 4.9%, slower than the 6.1% in September and 7.7% in the same month a year ago, due to easing food prices. This was the slowest pace in three months.
Still, inflation breached the 2-4% target for the 19th straight month in October. For the 10 months, inflation averaged 6.4%.
In the US, the consumer price index stood at 3.2% in October, easing from 3.7% in September, the US Bureau of Labor Statistics said last week.
The attributable net income of the country’s oldest conglomerate surged by 82.3% to P13.9 billion during the third quarter from P7.63 billion in the same period a year ago.
From January to September, its net income attributable to owners of the parent company rose 35.2% to P32.31 billion.
Core net income rose 42% to P31 billion after the improved performance of its subsidiaries.
BPI’s net earnings increased 26% to P38.6 billion due to sustained loan growth, margin expansion, and reduced provisions.
ALI’s net income rose 38% to P18.4 billion driven by sustained gains in its property development and commercial leasing businesses.
ACEN’s net income also leaped 59% to P6.6 billion as new operating capacity and the company’s sustained net seller position were further lifted by one-off gains related to the partial sale of its Salak and Darajat plant.
Meanwhile, Globe Telecom, Inc.’s net income declined 27% to P19.4 billion primarily because of a one-time gain on the partial sale of its data center business registered in the same period last year.
Maybank’s Ms. Rodriguez expects Ayala’s revenues to grow by 11.4% for the full year 2023, with ALI making up the largest component. — Lourdes O. Pilar
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