Ayala Corp. boosts ALI stake

LISTED conglomerate Ayala Corp. increased its stake in Ayala Land, Inc. (ALI) after acquiring 35 million common shares worth about P457.6 million, a move analysts said signals confidence in the property developer’s long-term prospects.

In a regulatory filing on Wednesday, Ayala Corp. said it purchased the shares at P13.10 and P13.04 apiece.

The transaction raised Ayala Corp.’s ownership in ALI to 53.58% from 53.15% as of end-March.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., described the purchase as a meaningful show of support by the parent company for one of its key subsidiaries.

“Parent-company purchases are often interpreted by the market as a signal of confidence in the subsidiary’s long-term value and growth prospects,” he said in a Viber message.

He said the transaction may indicate that Ayala Corp. sees ALI’s market valuation as not fully reflecting its assets and earnings potential, particularly at a time when many Philippine equities continue to trade at discounts.

He added that the purchase could help bolster investor sentiment toward ALI, whose businesses span residential developments, commercial leasing, shopping malls, offices, industrial estates, hotels, and mixed-use projects.

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said Ayala Corp. may be taking advantage of what it sees as an attractive valuation.

“Ayala Corp. could be taking advantage of Ayala Land’s market price right now, which is considered to be at bargain levels,” he said in a separate Viber message.

DragonFi Securities equity research analyst Jarrod Leighton M. Tin likewise said the acquisition suggests management views the stock as undervalued.

“Ayala Corp.’s purchase of 35 million Ayala Land shares at an average of P13.07 reflects management’s view that the stock is trading well below its intrinsic value,” he said.

“The move reads as a vote of confidence in ALI’s longer-term prospects, even as the company contends with near-term challenges and sector headwinds,” he added.

Ayala Land shares rose 4.92% or 64 centavos to close at P13.64 apiece on Wednesday, while Ayala Corp. gained 0.05% to P399.80 each. — Alexandria Grace C. Magno