By Isa Jane D. Acabal, Researcher
SM PRIME HOLDINGS, INC. (SMPH) shares fell last week on Morgan Stanley Capital International (MSCI) rebalancing and weakness in the actual estate sector, offsetting gains from stronger earnings and expansion plans, analysts said.
Data from the Philippine Stock Exchange (PSE) showed SM Prime was the ninth most actively traded stock from Feb. 16 to twenty, with 28.18 million shares value P594.79 million changing hands.
The stock closed at P20.95 per share on Friday, down 1.9% from P21.35 every week earlier. This decline was steeper than the property sector’s 0.2% week-on-week drop and the 1.3% gain within the benchmark PSE index (PSEi).
On a year-to-date basis, SM Prime shares have fallen 7.9%, underperforming the 4.2% decline within the property sector and the PSEi’s 6.8% growth.
Jervin De Celis, equity trader at The First Resources Management and Securities Corp., said the pressure on the stock is linked to MSCI rebalancing.
In its February 2026 Index Review, MSCI kept the MSCI Philippines Standard Index unchanged but added Apex Mining Co. and Maynilad Water Services, Inc. to the small cap index. The changes will take effect after the close of Feb. 27.
SM Prime is one in all 11 constituents within the MSCI Philippines Standard Index, which covers the large- and mid-cap segments of the Philippine market. Fund managers monitor the index’s composition to regulate their portfolios.
“From Feb. 16 to 19, the stock has recorded over P140 million in net foreign selling as funds realign their holdings ahead of the Feb. 27 effective date,” Mr. De Celis noted.
“These adjustments often trigger significant passive outflows which might be independent of company milestones like mall expansions,” he added.
In a press statement on Feb. 16, SM Prime reported a net income of P48.8 billion in 2025, up 7% from P45.6 billion a yr earlier, driven by higher revenues in business property and disciplined cost management.
Meanwhile, its consolidated revenues reached P141.1 billion, barely higher than P140.4 billion in 2024.
SM Prime President Jeffrey C. Lim said the corporate is setting its capital expenditure (capex) budget at P100 billion this yr.
Based on Mr. De Celis, SM Prime’s capex commitment signals that the corporate is “not flinching on the local macro headwinds.”
“This aggressive expansion narrative has established a psychological floor for the stock, by some means offsetting potential downside from flat revenues and the persistent foreign selling observed ahead of next week’s MSCI rebalancing,” he added.
For Unicapital Securities, Inc., Research Head Wendy B. Estacio-Cruz said SM Prime’s full-year 2025 performance “reinforces confidence in the corporate’s earnings visibility and execution consistency, underscoring the strength and stability of its core operations.”
Ms. Estacio-Cruz added that the stock’s decline suggests that gains from higher earnings were offset by broader market pressures, including weakness in the actual estate sector.
“In our view, the recovery of SMPH’s residential segment stays largely hinged on financing affordability, particularly further downward repricing of mortgage rates, on condition that a good portion of its inventory is targeted on the mid-segment,” she said.
On Feb. 19, SM Prime announced that its office leasing arm, SM Offices, plans so as to add greater than 60,000 square meters of leasable space in Cebu City by the fourth quarter of 2026 amid surging demand.
“By leaning into Cebu’s rise as the highest BPO (business process outsourcing) alternative to Metro Manila, the corporate is moving away from the metro’s flat office market and chasing actual demand,” Mr. De Celis said.
He projects SM Prime’s first-quarter net profit at a variety of P11.9 billion to P12.1 billion, and full-year earnings at roughly P51.3 billion, with revenues at P149.5 billion.
Mr. De Celis said the stock is currently at its support level of P20.80 to P21 but could fall to P20.50 if selling continues.
“For the resistance, the stock must clear P21.50 to point out it’s back in a healthy trend. The actual breakout signal can be an in depth above P21.75, which might put the stock back above the 20-day moving average,” he said.