SM Prime Holdings, Inc. shares dipped last week despite news about its mall expansion plans and investor expectations of a rate cut, according to analysts.
Data from the Philippine Stock Exchange showed 28.39 million shares worth P857.4 million exchanged hands from Sept. 2-6, making the listed property developer the 10th most actively traded stock in the local bourse last week.
Shares in the Sy-led company finished trading at P30.10 on Friday. The stock price fell by 2.7% from a week earlier. For the year, the stock also declined by 8.5%.
Mercantile Securities Corp. Head Trader Jeff Radley C. See said in an e-mail that the listed property developer’s rally was driven by investors’ anticipation of a rate cut this year.
He also said that this would be bullish for SM Prime because it would make borrowing money cheaper.
In its Aug. 15 Monetary Board Meeting, the Bangko Sentral ng Pilipinas (BSP) cut benchmark interest rates by 25 basis points to 6.25%, its first cut in nearly four years.
With this, BSP Governor Eli M. Remolona, Jr. also signaled another rate cut before the end of the year.
Latest government data showed inflation for August slowed to 3.3% from 4.4% in July, the slowest pace in seven months and settling within the central bank’s target of 2-4%.
Last week, reports showed that the property developer is focusing on expanding its mall business in the Philippines due to its competitive advantages while maintaining stable operations in China.
Executive Committee Chairman Hans T. Sy also added that SM Prime is on track with its reclamation project, mentioning that there are ongoing discussions about potential partnerships for development and added that the budget for the reclamation is almost P150 billion.
This reclamation project is for the 360-hectare SM Smart City development, which is linked to the Mall of Asia Complex.
SM Smart City is designed as a mixed-use development similar to the Mall of Asia reclamation project. The property developer aims to finish the project and turn it over to the Pasay City local government by 2028.
SM Prime’s continued international expansion, especially in China coupled with its aggressive domestic growth, demonstrates its strong position as a regional real estate leader, Mark V. Santarina, trader at Globalinks Securities and Stocks, Inc., said in a Viber message.
He added that the company’s significant investments reinforce its commitment to growth both locally and overseas.
In the second quarter, SM Prime Holdings ‘attributable net income grew by 16% to P11.68 billion from P10 billion a year earlier. Meanwhile, consolidated revenues increased by 8.8% to P33.97 billion from P31.22 billion.
For the first half of the year, net income grew by 13.5% to reach P22.07 billion, whereas consolidated revenues for the six-month period grew by 8.1% to P64.69 billion.
For Mr. See, he pegged the resistance at P31, while the support levels were at P29.65 and 27.85.
“The stock might range for now between P29.65 and P31,” Mr. See added. — Abigail Marie P. Yraola
