PSE to revamp main index to include SMC, 4 other entrants

MANILA, Philippines - The Philippine Stock Exchange (PSE) will revamp its line-up of blue chips under its main index to include the comebacking San Miguel Corp. as well as four new entrants – Belle Corp., Cebu Air, Semirara Mining and SM Development Corp. – effective Sept. 12.

The recomposition of the PSE index (PSEi), which was based on the latest result of the bourse’s latest review covering trading activity from July 2010 to June 2011, will consequently strike out ABS-CBN, Filinvest Land, First Philippine Holdings, Lepanto Consolidated Mining and Security Bank Corp.

San Miguel was removed from the main index in November last year when its free float fell below the minimum 10 percent.

The PSEi consists of the country’s 30 most traded, most liquid and well-capitalized listed firms.

The bourse is effecting next month a change in the policy on calculating the main index. To be included in the PSEi, a listed company must have a public float of 12 percent, higher than the previous 10 percent.

To enjoy continued listing, the listed firm must rank among the top 25 percent in terms of median daily value in nine out of the 12-month period in review from the current P5 million average daily value.

The PSE also noted that the ranking shall no longer consider the sector representation of companies and shall treat eligible companies equally. Currently, final selection of companies is done in two stages with the two highest-ranked companies from each of the six sectors filling the first 12 slots to ensure sector representation. The remaining slots will then be occupied by the 18 highest-ranked companies from among the other qualifiers.        

“With the revisions in calculating our index, we hope to boost liquidity which is one of the stock market’s biggest challenges. The changes reflect our intention to adopt global best practices,” said Hans B. Sicat, PSE president and chief executive officer.

The move is expected to bring about more follow-on offerings, and even out free float levels across all listed companies.

The index recomposition periods has also been moved to March and September yearly from the current May and November schedules.