Privatization pipeline gains traction with Atrium of Makati sale

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From AB Capital's The Opening Bell: Three Moves

Event

The government completed the P1 billion sale of Atrium of Makati units, more than double the P400 million initial valuation, lifting first-half privatization proceeds to P1.87 billion. Larger planned disposals include FTI, Mile Long, and the state's 20% stake in SLEX Inc.

View

We think the transaction validates demand for well-located government assets, although the P101 billion full-year target remains dependent on closing several large deals. Successful execution could provide modest fiscal support and improve asset utilization, with limited near-term impact on the broader market.

Catalyst

The next triggers are the targeted third-quarter Mile Long sale, the proposed P20 billion FTI disposal, and the fourth-quarter SLEX stake transaction. Proceeds will be sensitive to valuation, bidder participation, transaction structure, and whether geopolitical volatility weakens investor appetite for large-ticket assets.

Action

In our view, the SLEX disposal is neutral for San Miguel Corp. (SMC) until the buyer and pricing are disclosed. We also think the Atrium sale is mildly positive for Ayala Land Inc.'s (ALI) Makati RNAV narrative, but insufficient as a standalone share-price catalyst. The Mile Long sale and any further prime Makati transactions would carry considerably more valuation significance.

Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.