The share price of Ayala Corp. plunges into the Russian-Ukrainian conflict

Shares of AYALA CORP. fell on bearish market sentiment as investors continue to monitor the Russian-Ukrainian conflict and its impact on soaring oil prices.

Data from the Philippine Stock Exchange showed that a total of 2.83 million shares of Ayala Corp. worth 2.21 billion pula was traded from March 14-18, making it the seventh most actively traded on the stock market last week.

Shares of the conglomerate ended at P788.00 each on Friday, down 1.6% week-on-week. Year-to-date, the stock price has fallen 5.4%.

Regina Capital Development Corp. Sales Director Luis A. Limlingan attributed the week’s performance to volatility as investors closely monitor geopolitical tensions and their impact on global oil prices, the inflation and the country’s economic growth.

“AC’s share price movement over the week was more a reflection of investor sentiment amid said geopolitical tensions rather than something specific to the company itself,” he said in a statement. email interview, referencing the company symbol.

But many investors turned to the stock over the week as its recent earnings report led to a relatively wider trading range, Limlingan said.

“The earnings report also reinforced investors’ belief that AC is a fundamentally sound company that has strong growth potential going forward,” he said.

Market participants had bearish market sentiment early in the week due to inflation fears amid soaring oil prices, said Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financial, Inc. in an email.

“I believe that’s what drove AC’s stock price down by [last] beginning of the week. There was some bargain hunting over the next two days. However, at the end of the trading week, the general bearish sentiment in the market resurfaced on the lack of meaningful progress in the Russian-Ukrainian talks. This pulled AC to a negative close for the week.

He said the conglomerate’s net income grew, but one-time gains played a big role in that.

In a March 11 post, Ayala Corp. announced a 62% growth in its net profit to 27.8 billion pesos last year, mainly due to higher profits in its activities such as banking, real estate, telecommunications and energy, as well as only to one-time growth. earnings.

Its basic net income, which excludes one-time gains, fell by a tenth to 23.5 billion pesos, due to tighter net interest income from the Bank of the Philippine Islands, amortization charges higher stakes in Globe Telecom, Inc. and the reduced stake in AC Energy Corp.

In the last three months of last year, its net profit rose 46% year-on-year to 23.5 billion pesos.

At the end of February, Russia invaded Ukraine, sending shockwaves through world markets. Russia is the second largest crude oil producer after Saudi Arabia.

The dispute has pushed the international Brent benchmark above $100 a barrel, a level not seen since 2014.

Recent reports indicate that talks between Ukraine and Russia are progressing.

Ukrainian President Volodymyr Zelensky said their negotiations had become more realistic since the start of the war three weeks ago, Reuters reported.

Russian President Vladimir Putin, meanwhile, has said he is open to discussing a neutral status with Ukraine.

This year, Tantiangco expects Ayala Corp.’s bottom line to be higher. will increase by 10%.

“We expect strong financial performance from its segments (as the economy reopens) primarily from its real estate, banking, telecommunications and energy segment.”

Mr Limlingan expects profits from Ayala Corp. this year are between 28 and 35 billion pesos, with the first quarter between 7 and 8.75 billion pesos.

“Any updates regarding its operations as the economy reopens and whether or not it has already returned to pre-pandemic levels could impact its share price, as that is what investors are looking for right now,” Limlingan said. .

It placed support for the stock at P750.00 this week, while resistance at P825.00 and P850.00.

For Mr. Tantiangco, a recovery in Ayala Corp.’s basic net income. in the first quarter of 2022 could encourage investors to look into the company.

“In the short term, improvements in the general state of the market could encourage market participants to look at turnover. This includes positive developments in our current narratives such as progress in the Russian-Ukrainian talks and diminished inflation fears.

He placed the support of Ayala Corp. in the range of P690.00 to P710.00 while its resistance was between P800.00 and P820.00. — Abigail Marie P. Yraola with Reuters