MANILA WATER Co., Inc.’s (MWC) shares rose in value last week following the announcement of progress on its East Bay Water Treatment Plant upgrade, analysts said.
Data from the Philippine Stock Exchange (PSE) showed that Manila Water was the seventh most actively traded stock, with 32 million shares changing hands and a total value turnover of P1.21 billion as of Friday’s close.
Week on week, Manila Water’s share price jumped by 14.2% to P39.40 from P34.50. This outperformed the 1.2% gain of the industrials sub-index and the 0.9% decline of the PSE index.
Year to date, the utility’s share price has surged by 45.9% from its closing price of P27 on Dec. 27.
Luis A. Limlingan, head of sales at Regina Capital Development Corp., said the high completion rate of Manila Water’s East Bay upgrade may have been interpreted by investors as a “positive signal of growth… potentially driving the stock price up.”
On Tuesday, Manila Water said the raw water intake structure under Phase 2 of its East Bay project was 92% complete.
The structure is designed to draw 200 million liters of water per day from Laguna Lake to reduce reliance on Angat Dam by sourcing water from alternative supply points.
The intake structure is part of a P525-million project that began in June 2023 and is targeted for completion by the third quarter of this year.
“[This indicates] the company’s ability to meet its infrastructure commitments and enhance long-term water supply reliability,” Mr. Limlingan said in a Viber message.
In addition to infrastructure developments, Mr. Limlingan said the share price increase may also be linked to the upcoming initial public offering (IPO) of Maynilad Water Services, Inc.
The Securities and Exchange Commission approved Maynilad’s IPO application on June 2.
At up to P20 per share, Maynilad plans to offer 1.66 billion common shares, up to 249.05 million shares as part of an overallotment option, and 24.9 million shares under a preferential offer.
The offer period will run from July 3 to 9, with the listing on the PSE set for July 17.
Mr. Limlingan said the entrance of another water utility into the market is a key development for investors monitoring Manila Water.
“It could either intensify competition in the water utility sector, or reflect favorably on the industry, which could boost MWC’s profitability,” he said.
Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message that Manila Water’s strong first-quarter financial results may support continued upward momentum in the company’s share price.
In a disclosure to the local bourse, Manila Water reported a 14.2% year-on-year increase in attributable net income in the first quarter to P3.56 billion from P3.12 billion a year earlier.
Consolidated revenue for the quarter also rose by 7.2% to P9.54 billion from P8.82 billion in the same period last year.
Mr. Limlingan said recent developments are fueling a positive outlook for the stock this week, although a technical correction may occur due to its overbought condition.
“For the upcoming week, MWC’s support could be around P36 to P37, while the resistance level could be at P40,” Mr. Limlingan said.
Mr. Pangan, meanwhile, identified immediate support and resistance levels at P37.65 and P39.60, respectively. — Matthew Miguel L. Castillo