In MSCI index, Metro Pacific to replace SMC

Infrastructure holding firm Metro Pacific Investments will join the closely tracked MSCI Philippines index, replacing conglomerate San Miguel Corp., effective May 31 this year.

MSCI also realigned the MSCI Global Small Cap Indices, adding five new Philippine companies, all of which are not part of the main-share Philippine Stock Exchange index: D&L Industries, EEI Corp., Pepsi-Cola Products Philippines Corp., RFM Corp. and San Miguel Purefoods Co. Inc.

Deleted from the small cap index were five local companies: GT Capital Holdings, Megaworld Corp., Puregold Price Club, Robinsons Land Corp. and Security Bank Corp.

Any adjustment in a country’s weight could be attributed to the dynamics of prices, number of shares, movement in prices and free float factor of component companies.

A cap of foreign ownership also has an impact of reducing maximum amount of shares that investors can buy. As such, whenever the level of foreign ownership gets too close to the threshold, such that it becomes impossible to buy new shares, MCSI tends to mitigate the effect by cutting the weight of that company in the index.

Other components of the 18-company MSCI Philippines index are SM Investments, Ayala Land Inc., SM Prime, Philippine Long Distance Telephone Co., Banco de Oro, Aboitiz Equity Ventures, Bank of the Philippine Islands, Ayala Corp., Metropolitan Bank and Trust Co., Alliance Global Group Inc., Universal Robina Corp., ICTSI, EDC, Aboitiz Power, Jollibee Foods, DMCI Holdings and Globe Telecom.

“In the next couple of days … foreign fund managers will be realigning their portfolios. But it’s okay. It’s no cause for alarm. More and more of our portfolio managers are even upgrading their index targets to 7,500- 7,700 by yearend,” said Maria Theresa Javier, senior vice president and head of asset management and trust group at Bank of the Philippine Islands.

For now, Javier said, the PSEi is due for some correction, which may be good for clients who do cost averaging. Doris C. Dumlao