SM Prime readies P10-B buyback program

Real estate giant SM Prime Holdings Inc. has earmarked up to P10 billion to buy back some of its shares from the public in a move seen to raise its share price.

In a stock exchange filing on Tuesday, the Sy family-led developer said its board of directors had approved of the share buyback program that was valued at P5 billion to P10 billion.

“The final terms and implementation of the program have been delegated to management,” SM Prime said in its disclosure.

READ: SM Prime: 30 years of growth and good

Companies typically buy back shares from the public to raise their share price, helping boost investor confidence.

So far this year, SM Prime’s share price has plunged by 17 percent to P26.75 on Dec. 10 from P32.3 in the beginning of 2024.

Jayniel Carl Manuel, equities trader at Seedbox Securities Inc., said that reducing the number of shares on the market could “create some natural upward pressure on the stock price, especially if demand stays steady or even grows.”

“With fewer shares floating around, the ones that remain tend to become more attractive to investors, and that can nudge the price higher over time,” Manuel said.

At the same time, he pointed out that buybacks reflected SM Prime’s financial strength, noting that the company was “comfortable spending capital” for such an exercise, indicating that “they’re not worried about short-term cash crunches or emergency funding.”

SM Prime has yet to disclose how it would fund the program, although it has recently launched capital-raising activities.

Last July, SM Prime and its parent firm SM Investments Corp., raised $500 million from the offshore debt market.

—MEG J. ADONIS