BIZ BUZZ: Will ALI lose its MSCI seat?
Is Ayala Land Inc. (ALI) on the verge of losing its place in the MSCI Philippines Standard Index?
That’s the question making the rounds after First Metro Securities and DBS Bank revised its rating on the property giant to “hold” from “buy” and slashed its target price to P15.50 from P28. These institutions also issued a “mid-to-high conviction” that ALI could be removed from the MSCI index as early as August, citing its failure to meet minimum free float-adjusted market capitalization thresholds based on June 5 estimates.
MSCI exclusion could mean lower passive fund ownership, lower trading liquidity and reduced visibility among foreign investors.
The downgrade comes as analysts turn cautious on ALI’s residential business—which accounts for roughly 60 percent of earnings before interest and taxes—following the suspension of key projects.
They also pointed to debt maturities and a slower rollout of leasing assets as potential drags on growth.
But before investors rush for the exit, ALI itself appears to be preparing for a much different scenario.
In a recent interview with Inquirer Business, chief financial officer Jed Quimpo said the company has deliberately built up “dry powder” by keeping leverage within conservative levels and trimming capital expenditures. The goal: Stay ready to seize opportunities should market dislocations create attractive assets.
“If opportunities arise, we want to be there,” Quimpo said.
Quimpo noted that ALI’s debt-to-equity ratio remains below one-to-one, while earnings cover interest expense by 4.6 times, metrics he described as key guardrails for preserving flexibility.
His mantra? “Never waste a good crisis.”
That may not directly answer whether MSCI will eventually show ALI the door. But it does suggest management is focused less on index membership and more on ensuring the company has enough financial muscle to prepare for whatever turbulence will come next.
Whether investors share that confidence may become clearer when MSCI unveils its next review.
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