DESPITE the lack of catalyst during last week’s shortened trading, SM Prime Holdings, Inc. is expected by analysts to recover on the back of holiday spending as well as the gradual reopening of the economy.

A total of 26.73 million shares worth P1.022 billion were traded from Dec. 21 to 23, making SM Prime the third most actively traded issue last week, data from the Philippine Stock Exchange showed.

Financial markets were closed on Dec. 24 and 25 in observance of the Christmas holidays.

Shares in the Sy-led property developer inched up by 1.7% to P38.55 apiece last Wednesday from the P37.90 finish last Dec. 18. The stock has risen by 67.6% since the start of the year.

China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said SM Prime’s movement last week was largely in line with the performance of the property sub-index, which also traded sideways.

“No notable company development this week, trading was mostly influenced by index fund flows and technical factors,” Mr. Mercado said in an e-mail interview.

Meanwhile, SM Prime unveiled on Dec. 18 its plan to issue 2.5- and five-year P5-billion fixed-rate bonds with an oversubscription option of up to P5 billion.

This will be the second tranche of bonds issued under its P100-billion fixed-rate bonds shelf registration approved by the corporate regulator last February.

Local debt watcher Philippine Rating Services Corp. assigned these planned papers the top credit rating of “PRS Aaa,” which means that the company is expected to have an “extremely strong” capacity to meet its financial obligations.

“SM Prime plans to use the investments to fund new malls and other expansion projects, which may include reclamation project,” COL Financial Group, Inc. Senior Research Manager Richard G. Laneda said in an e-mail.

At present, SM Prime has 74 shopping malls in the Philippines with 8.5 million square meters (sq. m.) of gross floor area. It also has seven malls in China with 1.3 million sq. m. of gross floor area.

It has 51 residential projects — 40 in Metro Manila and 11 outside the capital region.

SM Prime’s property portfolio includes 12 office buildings with a combined gross floor area of about 708,000 sq. m. as well as four convention centers, three trade halls, and eight hotels.

SM Prime’s consolidated revenues dipped by 28.6% to P60.69 billion as of September this year amid the lockdown measures to contain the spread of the coronavirus that temporarily closed business establishments such as malls.

Its attributable net income during the January-September period was nearly halved to P14.37 billion from P27.60 billion last year.

Mr. Mercado expects SM Prime to recover amid the holiday spending season.

“Profitability should continue to improve over the next quarters and in 2021 (vis-a-vis 2020) especially given the outlook for economic recovery (e.g., recovery in demand, continuing relaxation of quarantine measures, vaccine rollout),” he said.

“However, possible impacts of the growing adoption of e-commerce (vis-à-vis shopping in malls) to SM Prime’s mall segment remain to be seen. Continued deployment of capex for new projects should also buoy profitability down the line as these developments come online,” Mr. Mercado said.

Mr. Laneda, meanwhile, sees rental concessions to be slowly rolled back starting next year.

“Online sales [are] not a threat, but will mostly complement brick-and-mortar businesses as the SM Group is taking advantage of online channels,” Mr. Laneda said.

As the economy slowly opens up, he expects SM Prime’s net income to be higher next year, pencilling in a bottom line of P34.7 billion.

For this week, Mr. Mercado sees SM Prime trading with a support level of P37.35 and resistance ranging from P39.00 to P39.50. — Ana Olivia A. Tirona