August 28, 2014

PSEi recomposition take effect 15 Sep

EMP in, PX out: In a notice yesterday, the Philippine Stock Exchange announced the new composition of the PSE Index (PSEi) that will take effect on 15 Sep 2015. As we previously estimated (see Market Strategy note dated 25 Jul 2014), Emperador Inc (EMP) will be included in the PSEi and will replace Philex Mining Corp (PX).

The rebalancing considered the trading data for the period 1 Jul 2013 to 30 Jun 2014. The PSEi rebalancing will include listed issues that will meet three conditions: at least 12% free float level, those in the top 25 in terms of median daily value/mo in nine out of the 12 months in review, and the top 30 in terms of full market capitalization.

Our take: Aside from the change in PSEi components, we also expect the rebalancing to result in higher index weights for SM Prime Holdings (SMPH), Petron Corp (PCOR) and Jollibee Foods Corp (JFC) but lower weights for JG Summit Holdings Inc (JGS) and Alliance Global Group Inc (AGI). – WealthSec