SM Prime shares rise after $350-million dollar bond issuance

SM PRIME HOLDINGS, INC. (SMPH) saw its shares rise week on week after completing a $350-million dollar-denominated bond issuance to fund mall redevelopment and expansion.

The Sy-led property developer was the ninth most actively traded stock last week, with 28.46 million shares worth P674.42 million changing hands from Sept. 8 to 12, data from the Philippine Stock Exchange (PSE) showed.

SMPH closed at P23.90 per share, up 3.9% from P23 on Sept. 5, outperforming the property sector’s 1.7% growth and the PSE index’s (PSEi) 0.6% decline.

Year to date, the stock has fallen 5%, lagging behind the property sector’s 5.3% gain but outperforming the PSEi’s 6.4% drop.

Franco Fernandez, equity research analyst at Dragonfi Securities, Inc., attributed the recent rise to “a combination of bargain hunting and selective investor positioning.”

Jervin De Celis, equity trader at The First Resources Management and Securities Corp., said investors have shifted into resilient stocks since the PSEi peaked at 6,547.57 in July.

“SMPH’s outperformance of the broader property sector underscores investor sentiment after the company’s successful dollar bond issuance and strong financial results,” he said.

In a disclosure on Wednesday last week, SMPH said it had secured $350 million from the bond issuance to finance expansion plans.

Demand was three times oversubscribed, with offers reaching over $990 million.

The bonds, carrying a 4.75% coupon and maturing in five years, are the second drawdown under SMPH’s existing $3-billion multi-issuer European Medium-Term Note program and will be listed on the Singapore Exchange.

SMPH plans to use proceeds to fund 16 major redevelopments and 12 new lifestyle malls scheduled between 2026 and 2030.

Mr. Fernandez said the move “reinforced the investment case for SMPH as an undervalued play on retail growth, with macro tailwinds from easing inflation and lower interest rates further underpinning sentiment.”

Aniceto K. Pangan, trader at Diversified Securities, Inc., noted that ongoing central bank rate cuts are expected to support mall performance and property sales.

Inflation quickened to 1.5% in August from 3.3% a year earlier, while the Bangko Sentral ng Pilipinas lowered its key rate by 25 basis points to a three-year low of 5% in August.

Since starting its easing cycle in August, the central bank has reduced interest rates by a total of 150 basis points.

SM Supermalls President Steven Tan told reporters earlier that the company plans to open a new mall in Xiamen City, Fujian province, in October, and another in Fujian in 2027.

Mr. Pangan said the openings “will further sustain growth in the company going forward.”

SMPH’s attributable net income rose 10.3% year on year to P12.8 billion in the second quarter, bringing first-half attributable profit to P24.46 billion, up 10.8%.

Mr. De Celis expects third-quarter net profit of about P13.5 billion, representing 5.5% year-on-year growth, while both he and Mr. Pangan project full-year earnings of around P50 billion.

For this week’s trading, analysts placed immediate support levels between P22.45 and P23.70, with resistance at P24 to P26, citing the stock’s recent performance and underlying business developments. — Heather Caitlin P. Mañago