Local stocks take beating amid MSCI tweaking

Local stocks mostly ended the week on a sour note following the latest MSCI rebalancing, which deleted conglomerates AGI and DMCI from the MSCI Philippine index.

The main-share Philippine Stock Exchange index (PSEi) slipped by 8.05 points, or 0.1 percent, to close at 8,065.76.

AGI, the day’s most actively traded company, slid by 6.02 percent, while DMCI fell by 5.22 percent. They will be deleted from the closely tracked MSCI Philippine index after the close of trades on Nov. 26.

On the other hand, the weights of SMPH, ALI, BDO, SM Investments and Ayala Corp. were increased, local stock brokerage Papa Securities said in a research note.

“AGI is now part of the small cap index with Bloomberry, First Gen, Vista Land, Wilcon and Semirara’s weights all lowered to make way,” the brokerage said.

While DMCI has steadily declined in the past two weeks in anticipation of its MSCI removal, its earnings could grow by 28 percent, beating the average earnings growth rate of 12.2 percent for the PSEi next year, Papa Securities said. It noted Semirara had reported a third-quarter earnings improvement of 234 percent, thus “we take this as strong indication that our thesis of a strong recovery next year is afoot.”

The PSEi was weighed down most by the holding firm, mining/oil and property indices.

On the other hand, the financial, industrial and services counters slightly gained.

Value turnover for the day amounted to P6.83 billion. There was net foreign selling of P485.4 million.

There were 100 decliners that edged out 70 advancers, while 66 stocks were unchanged.