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Philippines: Inflation surprise hits blue-chip Ayala
Domestic and external developments weighed on Ayala Corp. (AC) last week but the conglomerate’s shares remain above their year-to-date low.
“A lot of foreign selling … brought the price down,” Eagle Equities research head Christopher John Mangun said.
AC suffered net foreign selling of over P640 million last week, with the bulk occurring Friday to the tune of almost P396 million.
The conglomerate’s stocks dipped 2.86 percent or P27 to close at P917 during the last trading day of the week amid a wider 0.53-percent plunge for the benchmark Philippine Stock Exchange index.
The latest close compares to AC’s year-to-date high of P1,095, hit on February 15, and its year-to-date low of P870 last June 26.
Mangun cited “higher than expected” August inflation as a factor behind the fall, which was also experienced by other listed firms.
Consumer price growth accelerated to a new nine-year high of 6.4 percent last month, well over the 5.9-percent forecasts of Bangko Sentral ng Pilipinas and the Department of Finance.
The news, along with investor concerns over emerging markets and the United States’ trade disputes with China, led to tumbles for the PSEi and the peso, with the latter dropping to a new 13-year low.
AP Securities research analyst Rachelle Cruz, meanwhile, said that news about AC’s latest business plans had relatively little impact on the conglomerate’s shares.
Property unit AC Infrastructure Holdings Corp. announced that it had inked a deal with Zalora affiliate Brillant 1257 GmbH & Co. Vierte Verwaltungs Kg. for a logistics tieup.
Cruz said the conglomerate’s primary subsidiaries — Ayala Land, Globe Telecom and Bank of the Philippine Islands — were still its main performance drivers.
Ayala Land grew its first half net by 18 percent and the telco also posted a 9-percent rise in profits. The banking unit, on the other hand, saw income fall by 5.7 percent.
AC recorded 7-percent net income growth for the period to P16.1 billion, which it attributed to gains from the real estate, telecommunications and power businesses.
Last year, the conglomerate’s profits jumped by 16 percent to P30.3 billion, driven by strong profits from property development and power.
Source: https://www.manilatimes.net/inflation-surprise-hits-blue-chip-ayala/439848/