PSE reconstitutes main index

Effective yesterday, the Philippine Stock Exchange (PSE) had reconstituted the list of the market’s main barometer – the PSE Composite Index or Phisix – to reflect a more accurate trend and overall sentiment among investors.

The 30-company Phisix dropped five stocks from the list and replaced them with an equal number of more active and higher capitalized issues.

Gaining entry in the elite field are Ayala companies Bank of the Philippine Islands and Globe Telecom; Benpres-controlled First Philippine Holdings Corp.; technology stock Music Corp.; and Union Cement Corp., the surviving entity in a three-way merger with Bacnotan Cement and Davao Union Cement, all of the Phinma Group.

Giving way, on the other hand, are property developers Fil-Estate Land Inc., Filinvest Development Corp. and C&P Homes; Southeast Asia Cement Holdings; and Pilipino Telephone Corp.

"The new basket of stocks is the result of the review and evaluation of all listed companies for the three-year period 1998 to 2000, using the guidelines governing the selection of index stocks," PSE president Ramon T. Garcia said.

He said an ideal PSE index should create a balanced emphasis between sector representation and market capitalization. Further, liquidity is a very important factor to complete the requirements for a more reflective index.

It is in this context that the recomposition could have also contributed to the 58-point drop in the Phisix yesterday since the bigger cap and more liquid companies replaced the smaller issues and factored in more weight in the main index, causing a more defined tug in the market’s movement.

The new Phisix closed 58.31 points or 4.72 percent lower to a new three-year low of 1178.11 as the terrorist attacks in the US still caused market jitters on a global scale.

Leading the so-called blue chips are the country’s biggest conglomerates and industry leaders: PLDT, San Miguel Corp., Meralco, Ayala Corp., Ayala Land, SM Prime Holdings, Metrobank, Benpres Holdings, JG Summit Holdings, Petron Corp., Jollibee Foods Corp. and ABS-CBN Broadcasting Corp.

Completing in the list are ICTSI, DMCI Holdings, Belle Corp., Filinvest Land, Lepanto Consolidated Mining, Equitable PCI Bank, Aboitiz Equity Ventures, Philippine National Bank, Metro Pacific Corp., La Tondena Distillers Inc., Megaworld Corp. and Digital Telecommunications.