BIZ BUZZ: Market too harsh on ALI?

Ayala Corp. doesn’t seem fazed by the market’s dim view of its property arm.

The conglomerate has been steadily scooping up more shares of Ayala Land Inc. (ALI), whose stock has languished despite its status as the country’s largest listed property developer.

To some observers, the buying spree looks less like routine housekeeping and more like a vote of confidence.

COL Financial chief equity strategist April Lynn Tan believes the market may have become overly pessimistic.

The market’s main concern has been ALI’s hefty debt load. But Tan argued that while leverage remains elevated, the company has already extended the maturities of its borrowings, easing immediate refinancing risks.

More importantly, she said, the stock’s current valuation appears to suggest a level of financial distress that simply isn’t supported by the fundamentals.

“We don’t think it’s going bankrupt or becoming insolvent,” Tan said. “We don’t share that view.”

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With its parent continuing to add to its holdings, Ayala appears to be sending the same message: today’s beaten-down valuation may be more of an opportunity than a warning sign.

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