SM PRIME Holdings, Inc. (SMPH) was the most actively traded stock in the local bourse last week as market players chose to take profits following news of the company’s partnership with other property firms to develop a 26-hectare sustainable waterside district in Cebu.

A total of 71.37 million SM Prime shares worth P2.64 billion were traded from June 28 to July 2, data from the Philippine Stock Exchange showed.

The share price of the Sy-led property firm closed at P37 apiece, down 2.1% from June 25’s closing price of P37.8 per share. For the year, the stock has gone down by 5.73%.

“Investors likely sold on news when it was reported that Ayala Land, Inc., along with SMPH and [Ayala Land subsidiary] Cebu Holdings, Inc., will be developing the 26-hectare waterside district in Cebu, hence the 3% slide in its share price mid-week,” Regina Capital Development Corp. Equity Analyst Anna Corenne M. Agravio said in an e-mail.

“Nonetheless, this means that the volatility was not caused by something purely fundamental, but by investors just taking profits after a solid rally in the past few trading sessions,” she added.

Meanwhile, Diversified Securities, Inc. Equity Trader Aniceto K. Pangan in a mobile phone message said that while SMPH’s development project in Cebu brings a positive outlook for the company in the long term, near-term uncertainties brought by the pandemic on recovery “continues to be a challenge” to SMPH, which explains the persisting volatilities in the stock.

Dubbed as South Coast City, the waterside project located within South Road Properties in Cebu will have nearly two million square meters of built-out area, 30% of which will be for residential spaces and 70% for commercial centers. The site is said to be home to “prime entertainment and commercial concepts” in the area, complemented by “other mixed-uses to serve diverse market needs.”

The land development construction for South Coast City was announced in a media briefing conducted by Ayala Land last Tuesday. The project is ongoing and is slated for completion by May next year.

The day after the announcement, SMPH’s stock price fell 3.18% to P36.5 per share on Wednesday from the previous day — the largest day-on-day stock price movement last week. The next two days saw the stock’s price partially rebound by 1.1% on Thursday and 0.27% on Friday.

SMPH had a consolidated net income of P6.5 billion for the first quarter, down 22% from the P8.3 billion earned in the same period last year. Quarter on quarter, it posted an improvement of 80% compared with the P3.6-billion profit recorded in the fourth quarter of 2020.

“Certainly, the improvement in the economy coupled with ease of restrictions will be a positive development for the performance of SMPH unless undermined by the continued presence of the pandemic virus that tends to restrict the mobility of the population,” said Diversified Securities’ Mr. Pangan.

Regina Capital’s Ms. Agravio shares a similar outlook: “[B]eing the largest mall operator in the country, [SMPH] will benefit from increased foot traffic in its retail areas. This is a particularly big deal since, historically, its malls have on average accounted for more than half of the firm’s total revenues,” she said.

Ms. Agravio placed the stock’s support and resistance levels at P36.50 and P37.80, respectively. For Mr. Pangan, support and resistance for SMPH is pegged at P36 per share and P38.15 per share. — Bernadette Therese M. Gadon