SY-LED SM Investments Corp. (SMIC) inched up last week after its first-half earnings report as well as its foray into the energy sector with the acquisition of the operator of the Tiwi and Mak-Ban steam fields.

Data from the Philippine Stock Exchange (PSE) showed that 2.02 million SMIC shares worth P1.58 billion exchanged hands from Aug. 1 to 5, making the stock the fifth most actively traded on the local bourse during the week.

Shares in SMIC dipped by 1.5% to P780 apiece on Friday from P792 on Thursday. On a weekly basis, SMIC inched up by 0.6% from P775.50 each on July 29. However, its price has declined by 16.3% since the start of the year.

“[Last Friday], SMIC closed in the negative territory due to the pessimistic sentiment in the general market caused by our July inflation rate which reached 6.4%, faster than June’s 6.1%. Nonetheless, the stock was still up by 0.58% for the week,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in an e-mail.

The rise, he added, can be attributed to the appreciation of the conglomerate’s first-half financial results.

“While we have yet to see the full quarterly report, the first-half results are deemed strong with all key segments contributing to the rise in the bottom line,” Mr. Tantiangco said.

“SM’s share price increase [last] week could also be attributed to the approval of SM’s full acquisition of the Philippine Geothermal Production Co., Inc. (PGPC) which raises the prospects for the conglomerate in the energy space,” he said, referring to the company’s stock symbol.

In a disclosure on Tuesday, SMIC said it had acquired full ownership of PGPC through a P15.76-billion share-swap deal with Allfirst Equity Holdings, Inc.

The firm said it had received SEC approval to acquire the 81% stake of related parties in Allfirst in exchange for shares in SMIC.

Aniceto K. Pangan, equity trader at Diversified Securities, Inc., said that the stock’s movement last week was mainly due to SMIC’s earnings, which increased amid eased mobility restrictions, boosting consumer spending and banking activities.

“The additional acquisition of PGPC is positive as manifested by the increase in transacted volume through the Securities and Exchange Commission (SEC) approval,” Mr. Pangan said in a text message.

According to SMIC President and Chief Executive Officer Frederic C. Dybuncio, the PGPC deal is a “strategic fit” with the group’s investment portfolio, adding that it further reinforces the SM group’s commitment to sustainability and good governance, while being a catalyst for responsible development.

In a press release on Wednesday, SMIC reported a 27% increase in its first-half consolidated net income to P25.5 billion. Its consolidated revenues, meanwhile, went up by 23% to P238.5 billion during the same period.

The banking segment accounted for 48% of earnings in the first semester, followed by property (26%), retail (20%), and portfolio investments (6%).

Philstocks’ Mr. Tantiangco said that for the full year of 2022, SM’s earnings are expected to rise by 25%.

“This is on the back of the general expectation that the economy will continue with its growth trajectory. Confidence towards the economy’s outlook coupled with rising interest rates are expected to boost SM’s banking arm,” he said.

He added that strong consumer spending is expected to help SM’s retail arm as well as the mall segment of its property arm. The continuous expansion of its property portfolio is also seen to benefit the group.

Mr. Tantiangco said investors would consider SMIC if it is able to sustain the momentum in the second half of the year.

Investors would also be watching out for how SM will build on its full acquisition of PGPC as well as its plans in the energy sector.

Diversified Securities’ Mr. Pangan estimates a net income of P47.5 billion in 2022.

As for traders, Mr. Tantiangco said SMIC is testing its 20-day exponential moving average (EMA) of P790.76 as of Aug. 4, which is considered as its immediate resistance.

“This is followed by its 50-day EMA, P807.40 as of Aug. 4. After this is the P862.00 level. Meanwhile, support is seen at the P762.00-P778.00 range,” he said.

Traders are awaiting if SM can hold its ground above its 20-day EMA and if it can break past its 50-day EMA as these are seen to signal positive momentum for the share’s price, he said.

Mr. Pangan placed SMIC’s support at P758.00 while its resistance level at P804.00. — Abigail Marie P. Yraola