Posted on October 29, 2013 10:36:56 PM
[ BusinessWorld Online ]
SHOPPING center builder and operator
SM Prime Holdings, Inc. will now have a stronger impact on the movement of the
Philippine Stock Exchange index (PSEi) after it merged with SM Land, Inc., the
bourse said yesterday.
“The exchange would like to clarify to the investing public that the
increase in the index weight of SM Prime, which happened on Oct. 25, was a
result of the increase in outstanding shares of SM Prime that took effect on
the same day pursuant to its merger with SM Land,” PSE said in a memorandum.
No adjustment was made to the free
float level of the company in the 30-stock index, it noted.
PSE officials were not immediately
available for details on the firm’s new standing in the main index. But according
to Abbygayle M. Estrella, analyst at AB Capital Securities, Inc., SM Prime had
a weight of 5.67% as of yesterday, up from 3.3%.
This means the Sy-led company will
enjoy a stronger command over the benchmark index’s movement and thus, have a
bigger allocation from investment houses.
“This would mean adjustments from fund
managers so that their current portfolios will reflect the main index,” Ms.
Estrella explained.
“That’s the main reason why SM Prime’s
shares surged last Friday.”
Stocks of SM Prime jumped 15.86% to
P19.58 apiece last Friday, before they corrected yesterday to P18.50, down by
5.52%. Trading was suspended on Monday to make way for the barangay elections.
The Securities and Exchange Commission
early this month cleared the merger of SM Prime and SM Land, with the former as
the surviving entity.
The mall operator is set to acquire
other assets of SM Group, such as hotels and convention centers, as part of the
consolidation process that will make SM Prime the property holding firm of the
country’s richest family.
Once the consolidation is completed,
SM Prime is expected to become the biggest property firm in Southeast Asia in
terms of market capitalization, which is forecast to balloon to around P560
billion from about P338 billion. -- Cliff Harvey C. Venzon
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