Suntrust shares rise amid Megaworld stake sale

SHARES of Suntrust Resort Holdings, Inc. (SUN) rose last week, buoyed by heightened investor interest and sentiment-driven buying following Megaworld Corp.’s disposal of its stake.

The integrated resort developer ranked as the third most actively traded stock last week, with 1.56 billion shares worth P945.78 million changing hands from Dec. 22 to 26 on the local bourse.

Suntrust shares closed at P0.76 apiece, up 26.7% from the previous week. The stock outperformed the property sector’s 3.6% gain and the Philippine Stock Exchange index’s (PSEi) 2.4% increase.

Year to date, however, the stock has declined by 15.6%, underperforming the property sector’s 3.2% contraction and the PSEi’s 7.1% drop.

Wendy B. Estacio-Cruz, head of equity research at Unicapital Securities, Inc., said the rally was “largely driven by technical and sentiment factors rather than fundamentals.”

“Megaworld’s disposal of more than 23% of Suntrust’s shares initially posed a potential overhang, but because the sell-down was executed at a clear price level of P0.60 and did not push the stock lower, the market interpreted it as largely priced in,” she said.

Juan Alfonso G. Teodoro, equity trader at Timson Securities, Inc., echoed this view, noting that the ownership shift prompted heightened trading activity and drew significant investor interest as the market adjusted to the change.

In a Dec. 19 disclosure, Megaworld said it disposed of 900 million common shares in Suntrust Resort Holdings, Inc. through the open market. The shares, which accounted for a 12.4% stake in Suntrust, were sold at P0.60 per share for a total of P540 million.

This was followed by a separate disclosure on Dec. 23 stating that Megaworld disposed of 814.67 million common shares in Suntrust through the open market at the same price level. The shares represented an 11.2% interest in the resort developer.

“Megaworld’s large share sales increased the supply of Suntrust shares in the market and led to heavier trading during the week, which usually puts some pressure on the stock in the short term,” said Mr. Teodoro.

Ms. Estacio-Cruz said reduced selling pressure allowed buyers to lift the stock, sparking a modest recovery driven by sentiment rather than fundamentals.

For the coming week, Mr. Teodoro advised that “investors should watch out for any new company announcements or PSE disclosures, keep an eye on any further Megaworld share sales, follow updates on the Westside City resort project, and monitor SUN’s daily stock price and trading activity.”

Meanwhile, Ms. Estacio-Cruz said investors should also watch whether the P0.60 level holds, as a breach below this threshold may indicate renewed selling pressure.

Suntrust posted a P26.28-billion attributable net loss in the third quarter, widening by 7,966.4% year on year and bringing its nine-month attributable loss to P26.59 billion.

For the nine-month period ended September, total revenues fell by 7% to P8.84 million from P9.50 million a year earlier.

Mr. Teodoro expects a fourth-quarter net loss of about P10.30 billion and a full-year net loss of approximately P1.05 billion.

“This reflects the continuing losses seen over the past few years, though the large Q3 loss may possibly make the figure higher than usual,” he said.

He placed next support levels between P0.70 and P0.75, with resistance between P0.85 and P0.90. Ms. Estacio-Cruz pegged key support between P0.58 and P0.60, with resistance at P0.65 and stronger resistance between P0.68 and P0.70. — Heather Caitlin P. Mañago