Study finds strong link between property share prices, mobility data in Philippines

A "NOWCASTING" study by Maybank Securities found a relatively strong correlation between property share price movements and real-time mobility data in the Philippines.

In its report on Sunday (Jan 9), the brokerage's analyst Miguel Sevidal said the findings meant that mobility data can be used as a "leading indicator" for share price movements and potentially a tool for tactical market actions.

The analyst added that the strong correlations reflect how share prices for Philippine property stocks have largely been driven by headlines on quarantine restrictions and economic reopening, both of which are captured by changes in mobility levels.

Mobility levels also serve as a proxy for broad economic activity, which in turn anchors earnings expectations, he pointed out.

The study relied on daily mobility data captured by Google and Apple between February 2020 and January 2022, and tracked it against the share prices of index names SM Prime Holdings, Ayala Land, Robinsons Land and Megaworld, among others in the property sector.

Its findings showed positive correlations between Philippine property share prices and Apple's data on driving, transit and walking, as well as Google's data on retail, workplaces, groceries, parks and public transit stations.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

A negative correlation with the property share prices was established when residential mobility data from Google was used.

Of note, "strong" correlation coefficients ranging from 0.46 to 0.72 were obtained when raw mobility data representing a 7-day moving average is used, Sevidal pointed out.

With that, the analyst theorised that sustained improvement in mobility levels could be a leading indicator for a rally in property share prices, pointing out that Maybank witnessed "glimpses of this" in November 2021 and January 2022.

He said property share prices were up by 3 to 20 per cent month on month in mid-November as mobility levels reached their highest since February 2020. Share prices later corrected 2 to 8 per cent month on month as of Jan 5, in line with declines in mobility levels, he stated.

Sevidal, meanwhile, said developers' share prices showed lower correlation to mobility than landlords' share prices do. This suggests that developers' share prices "will be relatively more resilient" amid any heightened volatility in the market, he said.

These findings support Maybank's investment thesis for the sector as published in a report on Dec 16 - positive with a bias for names with greater development exposure - he added.

The brokerage's top pick among developers is Ayala Land, Sevidal reiterated.

Its target price for the stock was kept unchanged at 46 Philippine pesos on Sunday. Ayala Land shares were trading down 0.6 per cent at 34.30 pesos as at noon time on Tuesday.

READ MORE: 

• Philippine conglomerate Ayala to take 20.2% stake in Yoma Strategic
• Philippine peso goes from emerging market Asia's best to worst currency in a week