SUMMARY
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MANILA, Philippines (2nd UPDATE) – Share prices of Ayala companies remained down when the stock market closed on Monday, June 3, following the blast in the Serendra residential project of the conglomerate on Friday evening, May 31.
Property arm Ayala Land Inc. (ALI) declined by 7.26% at P31.30 per share, making it the 7th top loser in the Philippine Stock Exchange main index.
Shares of parent firm Ayala Corp., on the other hand, also declined by 1.35% at P621.50 per share.
On Friday, May 31, Ayala Land’s stock rose by 3%, the highest in the past 4 weeks, following the announcement of the government that the country grew by a whopping 7.8%, with private construction activities, including those by Ayala Land and other real estate developers, contributing to the country’s healthy economic performance.
Ayala Land’s Friday stock price also increased despite the announcement of rival SM Prime that an upcoming merger will dislodge Ayala Land as the country’s biggest listed real estate firm.
Serendra is one of the pioneer projects of the Ayala group in Bonifacio Global City in Taguig. The former military base is one of the fastest growing central business districts in the capital.
The May 31 blast, which ripped apart 10 units in Serendra, killed 3 people.
No surprise
The Monday morning decline in the stock prices of the listed Ayala companies is not surprising, explained COL Financial research head April Lee-Tan.
“(The decline) is expected…The decline was an immediate reaction to the incident…But I think if you’re a long term investor, there shouldn’t be any worry,” she explained to Rappler.
“In the long term, I think it (the blast) will not completely affect [Ayalas’] stocks. You cannot just attribute the decline to that. There are a lot of factors like market prices that you have to factor in. It’s hard to attribute it solely to [the] Serendra [incident],” she added.
However, investors are also looking out for the result of the ongoing investigation on the blast, especially for the impact on real estate industry.
“If it is confirmed [that] it’s a gas leak, it will decline some more because it tells you the kind of quality of workmanship the developer has. [If it is a bomb incident], everyone is at risk, [but shows that] it’s not the fault of the developer,” she said. – with reports from Lean Santos/Rappler.com
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