SMIC shares decline despite Q1 earnings growth
SHARES of SM Investments Corp. (SMIC) declined last week despite reporting profit growth for the first quarter (Q1), as investors booked gains following a recent rally, analysts said.
Data from the Philippine Stock Exchange (PSE) showed that SMIC was the 10th most actively traded stock from May 5 to 9, with P868.3 million in value turnover on 990,580 shares.
The conglomerate’s share price dropped by 0.5% week on week to P884 apiece on Thursday from P888 previously. This decline was steeper than the 0.3% contraction in the holding firms index and reversed the 0.7% gain in the benchmark PSE index during the same period.
Year to date, SMIC shares have fallen by 1.7%.
“The earnings announcement was positive for SM, but the decline this week was due to profit-taking after the stock’s recent rally since April,” Jervin S. De Celis, equity trader at The First Resources Management and Securities Corp., said in an e-mail.
In a disclosure on May 8, SMIC reported a 9% year-on-year increase in consolidated net income to P20.1 billion for the first quarter. Revenues rose by 6% to P152 billion.
“The stock had already been on a short-term rally since its April 8 low of P744 per share, which followed the US tariffs announcement. With the stock entering overbought territory late last week, profit-taking capped further gains,” Mr. De Celis said.
On April 2, US President Donald J. Trump imposed blanket tariffs on all countries exporting to the United States, followed by additional reciprocal tariffs announced on April 9.
In the two sessions preceding the reciprocal tariff announcement, SMIC shares closed at P746 and P750 on April 7 and 8, respectively, touching a low of P744. Following Mr. Trump’s 90-day pause on tariff implementation on April 9, SMIC shares recovered and traded above the P800 level.
Alexandra Margaux Denise G. Yatco, equity analyst at Regina Capital Development Corp., said in a separate e-mail that the decline may also reflect investor concern over weaker-than-expected gross domestic product (GDP) data.
The Philippine economy grew by 5.4% year on year in the first quarter, faster than the 5.3% growth in the previous quarter but slower than the 5.9% expansion recorded a year earlier. The latest figure also missed the lower end of the government’s 6-8% full-year growth target.
This week, Mr. De Celis said market sentiment may be affected by the outcome of the US-China meeting on May 10, which could influence trading when the local market reopens on Tuesday.
He also flagged the upcoming rebalancing of the MSCI index on May 14 as a potential driver of market activity. SMIC remains part of the MSCI Philippines Index as of the index provider’s April 30 disclosure.
Ms. Yatco said SMIC’s earnings could support a recovery in sentiment as investors take advantage of price dips. However, she said the GDP miss may continue to weigh on the stock’s performance.
She placed SMIC’s immediate support and resistance levels at P870 and P895, respectively.
Mr. De Celis expects SMIC to test support at P850 before attempting to retake resistance at P888. — Matthew Miguel L. Castillo
