AYALA CORP. shares ease on index rebalancing, weak sentiment
Ayala Corp. shares fell last week as index rebalancing under Morgan Stanley Capital International (MSCI) and broader macroeconomic concerns outweighed investor optimism from foreign partnerships, analysts said.
Data from the Philippine Stock Exchange (PSE) showed Ayala ranked eighth among the most actively traded stocks from May 25 to 29, with 2.7 million shares worth P1.2 billion changing hands during the week.
The stock closed at P436.60 on Friday, down 1.8% from P444.80 a week earlier, underperforming both the broader holding firm sector, which fell 1.7%, and the benchmark PSE index, which declined 3.2%.
Year to date, Ayala has fallen 6.7%, a smaller drop than the 8.5% decline in the holding firm sector but still lagging the broader market’s 4.7% contraction.
Market participants attributed the decline largely to MSCI’s quarterly index rebalancing, which triggered forced selling by passive funds tracking benchmark changes.
In its May 2026 index review, MSCI removed Jollibee Foods Corp. from the MSCI Philippines Standard Index and shifted it to the small-cap segment. The changes took effect at the close of May 29. Ayala Corp. remains part of the MSCI Philippines Standard Index.
“Since the overall index was down the whole day due to the rebalancing, the total foreign selling of P78.64 million may have been the culprit for the 2.98% drop in Ayala Corp.’s stock price,” Jervin De Celis, an equity trader at The First Resources Management and Securities Corp., said in an e-mailed reply to questions.
Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said index adjustments often force portfolio realignments that weigh on large-cap names.
“This forced selling is typically concentrated in the closing auction of the rebalancing date, which explains the unusually heavy volumes observed across the Philippine market on May 29,” he said in a Viber message.
Mr. Arce added that broader macroeconomic concerns also contributed to the pullback, including elevated interest rates, peso weakness and cautious foreign investor sentiment toward emerging markets.
He noted that market sentiment was further pressured by the widening trade deficit, which hit $5.97 billion in April, the largest gap in nearly four years.
Uncertainty over global geopolitical developments, including tensions involving the Middle East cease-fire, also weighed on risk appetite, he said.
Despite the sell-off, Ayala gained support earlier in the week from foreign partnerships and expansion agreements.
The company signed a cooperation agreement with Bangkok-based CP AXTRA Public Company Ltd. to strengthen mall development and asset management at Makro retail sites in Thailand.
It also joined other Philippine companies in signing memoranda of understanding with Japanese companies on May 27, covering smart cities, digital connectivity and financial technology projects, with potential revenue of about P7 billion.
These developments lifted investor sentiment during the week, Mr. De Celis said.
Mr. Arce said the partnerships signal Ayala’s diversification strategy, even as near-term sentiment remains volatile.
“The deals collectively signal that Ayala Corp. is actively diversifying its revenue base and geographic exposure at a time when domestic headwinds, including elevated oil prices, peso weakness and softer residential property demand continue to weigh on near-term earnings visibility,” he added.
In the first quarter, Ayala reported a 5.1% decline in attributable net income to P11.95 billion from a year earlier.
Mr. De Celis expects second-quarter net income to recover to P12.8 billion to P13.2 billion, supported by lending growth at Bank of the Philippine Islands and steady digital transaction volumes.
For full-year 2026, he pegged baseline earnings at P48.5 billion, though he warned that sticky inflation and delayed rate cuts could pressure results toward P47.5 billion or lower.
Mr. De Celis placed immediate support at P440 to P444, with deeper support seen at P400 to P420. Resistance is seen at P460 to P465, with a breakout toward P480 dependent on stronger volumes.
Mr. Arce placed support at P444 to P445 and resistance at P460 to P465, with a sustained move above that level needed to confirm renewed upward momentum. — Isa Jane D. Acabal
Ayala Corp. slides after MSCI changes, macro pressures
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