PSE set to revise anew composition of main index

The Philippine Stock Exchange (PSE) will revise anew the composition of its indices following the latest free float-based review of listed stocks.

PSE president Francis Lim said the changes in the composition of the indices will take effect on May 26, 2008 and will remain for six months or  until the bourse completes another review of the index.

As approved by the PSE board, the free float portion should represent at least 10 percent of the outstanding shares of a listed stock.

To remain in the 30-company main index, stocks should have an average daily turnover of at least P5 million and must be traded at least 95 percent of the total trading days. To qualify for inclusion in the sectoral indices, companies must have liquidity of at least P1 million and a 75 percent tradability.

“We in the PSE reiterate our position that the free float methodology in computing the index benefits both investors and the listed companies alike. That’s because the exercise encourages companies to increase their free float. In the process, they increase the level of activity in our market, and this increased activity in turn helps enhance the value of the stocks,” Lim said.

Four firms will lose their slots in the Philippine Stock Exchange index (PSEi), the main barometer of local stock price movements, with the addition of Philippine National Bank, Rizal Commercial Banking Corp., Union Bank of the Philippines and Vista Land & Lifescapes Inc. To be dislodged are ABS-CBN Broadcasting Corp., Belle Corp., DMCI Holdings and Petron Corp.

Lim said 18 companies will be included in the sector indices as the PSE does not set a limit on the number of entities that make up these indices.

In the services index, chip maker Ionics Inc. will be taken out while the following will be added: information technology and gaming conglomerate IPVG, Pacific Gaming Online Systems Inc., Diversified Financial Network Inc., Island Information and Technology Inc., Music Corp. and Transpacific Broadcast Group  International Inc.

Companies in the financial index will go up to 17 with the inclusion of Bankard Inc. and National Reinsurance Corp. of the Philippines, and the removal of Philippine Savings bank.

The holding firms index, on the other hand, will add four new members namely Alliance Global Group Inc., ATN Holdings Inc., PAL Holdings Inc. and Unioil Resources & Holdings Co. Inc.

There will be two new additions to the industrial index. These include Alaska Milk Corp. and TKC Steel Corp.

The  property index will have as new members Philippine Estates Corp. and Vista Land while the mining and oil index will increase to 17 with the entry of Benguet Corp. and Nihao Mineral Resources International, Inc.

The PSE decided in 2005 to conduct a regular free float-based review of the indices as part of a strategic program to entice more companies to expand their ownership and boost  stock market growth.