MSCI rebalancing drags down stocks

A rebalancing of the closely monitored MSCI indices dragged down the local stock market on Thursday following a large weight reduction in SM Investments, the most valuable company in this market.

The main-share Philippine Stock Exchange index slipped by 75.9 points or 1.14 percent to close at 6,580.71. The day’s biggest laggard was SMIC, whose shares fell by 7.73 percent, to P805.50 per share and was the most actively traded company for the day.

This developed as the latest quarterly MSCI rebalancing reduced the weight of SMIC in the MSCI Philippine index by 6.9 percentage to a pro-forma weight of about 8.72 percent. This was due to the reduction in shares available for foreign ownership. The changes in MSCI will take effect by September 2. Doris C. Dumlao