In a memorandum issued on Friday, February 8, PSE president and chief executive officer Ramon Monzon said the changes reflect the “dynamic changes in the company performance vis-à-vis the standards set by the exchange.”
“In turn, these indices represent the investment opportunities in the Philippine stock market,” Monzon added.
The changes will take effect on February 18.
The PSE’s memo can be viewed here.
The local bourse conducts a review of the index composition twice a year. (Rappler Talk: Bulls, bears, and other beasts of the stock market)
To be part of the PSEi, a company should have a free float level of at least 15% of its outstanding shares.
Companies belonging to the index also have the highest liquidity and market capitalization.
Abacus Securities earlier called for Bloomberry to replace Petron in the index, having a weight of about 1.1%.
The brokerage firm said Petron failed the liquidity requirement of being in the top quartile of stocks for 9 of the 12 months of the review period.
Moreover, Abacus Securities said that Bloomberry was the highest ranking eligible stock that was not a member of the index with P35.6 billion of market capitalization.
Meanwhile, April Lee Tan, head of COL Financial Research, said the reshuffle could push up stock prices of Bloomberry and a correction for Petron in the short term.
The industrials index will also see changes. Alliance Select Foods will be added to the list, while Phoenix Petroleum, PetroEnergy, and SFA Semicon Philippines will be booted out.
Dennis Uy’s Chelsea Logistics and Transpacific Broadband Group International will be added to the services index, while Melco Resorts will be removed. The services index now has 23 companies from 22.
Joining the properties index is Philippine Infradev Holdings, replacing Philippine Estates.
Asia United Bank was taken off the financials index, leaving the group with just 9 companies.
Meanwhile, Solid Group will be taken out off holding firms index, leaving the group with 14 firms. – Rappler.com