Ayala Land shares slip despite Market! Market! lease extension, parent buying

Ayala Land, Inc. (ALI) shares fell for the week ended 18 Sept as broader property sector weakness outweighed positive company-specific news, including the Market! Market! lease extension and additional share purchases by parent Ayala Corp. The stock closed at P15 apiece, down 0.4% from the previous

Shares of Ayala Land, Inc. (ALI) slipped last week as weakness in the broader property sector outweighed company-specific developments, including the extension of the Market! Market! lease and additional share purchases by parent Ayala Corp., analysts said. Data from the Philippine Stock Exchange (PSE) showed ALI was the 10th most actively traded stock last week, with 63 million shares worth P963 million changing hands from Sept. 11 to 18. The stock closed at P15 apiece on Sept. 18, down 0.4% from P15.06 the previous Friday.

The property index and the benchmark PSE index (PSEi) declined by 2.4% and 3.4%, respectively, during the week. Year to date, ALI shares have fallen 33.2%, compared with declines of 21% for the property index and 3.3% for the PSEi. On Sept. 14, Ayala Land signed a 12-year-and-seven-month lease extension with the Bases Conversion and Development Authority (BCDA) covering Market! Market! in Bonifacio Global City (BGC), Taguig City, alongside a planned P1-billion modernization of the mall.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said the Market! Market! announcement initially supported sentiment toward ALI but was not enough to offset broader market weakness. “I think the Market! Market! announcement provided some positive support to sentiment toward Ayala Land, although the final weekly performance suggests that the effect was not strong enough to overcome the broader weakness in the market,” Mr. Arce said in a Viber message.

Luis Limlingan, head of sales at Regina Capital Development Corp., said the development was effectively neutral for ALI because the investment was relatively small compared with the company’s overall capital expenditures (capex). “We see this development is effectively neutral for ALI, as the P1-B investment is relatively small versus its overall capex, while the lease extension mainly removes the 2027 expiry risk rather than adding near-term earnings. The longer-term upside comes from the planned BGC Subway Station, which could support higher foot traffic and rental growth at Market! Market!, but the benefits are still several years away,” he said in a Viber message.

Ayala Corp. also purchased an additional 4.54 million ALI shares during the week at an average price of P15.33 apiece. Mr. Arce said the purchase could be viewed more as a longer-term valuation signal than as a short-term price-support mechanism. “The reported purchase of 4.54 million ALI shares at an average price of P15.33 is particularly interesting because ALI subsequently closed at P15 on Sept. 18. This indicates that the parent-company buying provided a confidence signal but did not establish a floor for the stock or overwhelm broader selling pressure,” he said.

Mr. Arce placed ALI’s immediate support at P14.90 to P15. If that range fails to hold, he said the next support would be around P14.60 to P14.70. He placed immediate resistance at P15.40 to P15.60, adding that a convincing break above that range could open the way toward P16. Mr. Limlingan placed support at P14.60 and resistance at P15.30.

ALI’s attributable net income fell 19.2% to P11.46 billion in the first half from P14.17 billion a year earlier, while real estate revenue declined 10.6% to P72.66 billion from P81.32 billion. Mr. Arce said second-quarter results showed sequential improvement, with revenue of P37.5 billion and net income of P6.1 billion. He said first-half leasing and hospitality revenue rose 9%, including a 4% increase in shopping center revenue and 28% growth in hospitality revenue.