To take effect on Sept. 11 is the new composition of the Philippine Stock Exchange index (PSEi) arising from the result of the bourse’s review on the trading performance of listed stocks for the period covering July 2016 to June 2017.
The bourse conducts a regular semi-annual review and examination of its indices and the results become the principal basis for the recomposition of the PSEi and the sector indices.
The data used for the semi-annual review cover a period of one year. Like in the first review, which is the basis for the PSEi recomposition every March of the year, the recomposition uses the period of January to December of the immediately preceding year.
The second review, which becomes the basis for the PSEi recomposition the following September, uses the period of July of the immediately preceding year to June of the current year.
The rules for additions and removals at the semi-annual review are designed to provide stability in the selection of constituents of the PSE indices and at the same time ensure that the indices are representative of the market by including or excluding those companies that have risen or fallen significantly.
To qualify to the main index, a company’s stock has to pass three basic tests on free-float (or public float as more commonly called), liquidity and capitalization.
Under the first test, a company must have a public float of at least 12 percent. On the other hand, it “must be among the top 25 percent by median daily value per month for at least nine out of 12 months,” to satisfy the requirement on liquidity. On market capitalization (MCAP), the company must be among the top 30 stocks with the highest MCAP.
The latest review showed that the PSEi’s 30-stock composition would largely be left unchanged. However, nine stocks from its sectoral indices would be removed but 11 other issues would be added.
Medco Holdings Inc. will come in to replace Philippine Business Bank in the financial sector. Cemex Holdings Philippines Inc. and Pilipinas Shell Petroleum Corp. will also come in the industrial index while Da Vinci Capital Holdings Inc. will be excluded.
The holding firms index will have ATN Holdings Inc. and Lodestar Investment Holdings Corp. They will replace Filinvest Development Corp. and Prime Orion Philippines Inc.
On the other hand, Arthaland Corp., Crown Equities Inc. and MRC Allied Corp. will be added in the property index.
DFNN Inc. and ISM Communications Corp. will be removed from the services index while Apollo Global Capital Inc., Golden Haven Memorial Park Inc. and Harbor Star Shipping Services Inc. will be included.
In the mining and oil index, Abra Mining and Industrial Corp., Atlas Consolidated Mining and Development Corp. and Manila Mining Corp. will be removed.
To avoid speculation, the bourse will no longer publish the “Reserve List.” This lists the five highest-ranking companies that ranked 31st to 35th by full market capitalization. The list is used in the event that one or more constituents are deleted from the PSEi during the period up to the next scheduled semi-annual review.
Originally, the base level of the PSEi was pegged at 1,022.045 points. This was taken from its closing index of Feb. 28, 1990, the PSEi’s base date.
Pasig branch sale
A whole day visit at the bourse’s Pasig branch has become expensive for those who were accorded parking fee discounts before the bourse sold its Pasig office units and parking slots for P257 million to Philippine Realty and Holdings Corp., the developer of the Tektite building.
The sale was in line with PSE’s plan to consolidate its trading floors and brokers’ offices in a new property in Bonifacio Global City in Taguig.
To recall, the bourse was given a good deal by Fort Bonifacio Development Corp. to transfer its trading floor to the Bonifacio Global City after committing to buy more than P805.3 million worth of office space in the upscale district.
Bottom line spin
All these happened against the backdrop of a dour week bedeviled by geopolitical tensions, which doomsayers claim could trigger the feared “Third World War.” But then, like in one’s existence, the bourse is moving forward until stopped.