DMCI now in MSCI index

Consunji-led DMCI Holdings has been included in the MSCI Global Standard Indices, an influential equity benchmark for large and mid-cap equities closely tracked by global fund managers.

On the other hand, two Philippine companies—Philex Petroleum Corp. and Puregold Price Club—were added to the MSCI Small Cap Index.

There were likewise some changes in the index weights of some Philippine stocks that are already part of the MSCI indices.

Manila Electric Co.’s weight was cut by 6.75 percent while Banco de Oro and SM Investments got a respective increase of 0.99 percent and 1.52 percent.

As a result, SM stocks were buoyant on Wednesday.

These changes were made based on the May 2012 semi-annual index review of the MSCI equity Indices and will be implemented at the closing of May 31, MSCI Inc. announced in Geneva Tuesday night.

“DMCI’s addition has been anticipated and deserving. The company’s representation in the MSCI would enable the index to factor in the contributions of the fast-growing construction and power-generation sectors,” said Jose Mari Lacson, head of research at local stock brokerage Campos Lanuza & Co.

Neither was the inclusion of Puregold a surprise, Lacson said.

“Since there previously was no direct retail sector play, Puregold’s inclusion would also enable the MSCI to factor in the growth in the consumer sector,” he said.

But Lacson said the addition of Philex Petroleum was a bit aggressive.

“While it expands the index coverage to include a direct oil exploration play in the Philippines, PXP’s activities are still preliminary and depending on its weighting can have volatile effects to the index,” he said.

The MSCI indices were created to assist fund managers research the risk return profile of equity markets over time and make asset allocation decisions and carry out back-testing of various investment strategies and product ideas using the industry standard benchmark. They are also used as benchmarks in creating index-linked products.

DMCI shares fell by 6.29 percent on Monday as the market had long discounted its inclusion in the MSCI rebalancing. Philex Petroleum advanced by 12.65 percent due to the positive surprise while Puregold shares declined by 1.37 percent.

SMIC shares were up by 1.88 percent while BDO shares rose by 0.65 percent, one of the few stocks that bucked Wednesday’s stock market bloodbath.