Back in 2007, we wrote about the revised criteria of the Philippine Stock Exchange (PSE) with regard to companies that will be included in the Philippine Stock Exchange Index (PSEi) or Philippine Composite Index.
The PSEi, formerly known as the Phisix, is composed of 30 publicly-listed Philippine stocks selected to represent general movement of market prices and is generally regarded as one of the indicators of the general state of the Philippine economy.
(Update: New PSEi composition, as of September 2011)
PSEi Composition Criteria
Companies must meet three (3) criteria before they are included in the index:
- The company’s free float level should be at least 12%, up from the previous 10% requirement. The free float level is the number of shares available to third-party investors. This new criteria effectively requires PSEi index companies to have more shares that are owned by the investing public.
- The company must rank among the top 25% in terms of median daily value in nine out of the twelve-month period in review. This ultimately requires PSEi stocks to have a certain level of trading volume that makes it liquid. This is a change from the current rule of fixed P5 million average daily trading value.
- The ranking of qualified companies should be based on full market capitalization instead of float market capitalization.
A Reserve List is also going to be established which will become a replacement pool of stocks that can substitute for companies that may be removed from the index.
PSEi Composition, as of May 2011
As of the latest index recomposition done in May, the Philippine Stock Exchange index (PSEi) is composed of the following 30 stocks:
- Aboitiz Equity Ventures (AEV)
- Aboitiz Power (AP)
- ABS–CBN Corporation (ABS)
- Alliance Global Group, Inc. (AGI)
- Ayala Corporation (AC)
- Ayala Land (ALI)
- Banco de Oro Unibank, Inc. (BDO)
- Bank of the Philippine Islands (BPI)
- DMCI Holdings (DMC)
- Energy Development Corporation (EDC)
- Filinvest Land (FLI)
- First Gen Corporation (FGEN)
- First Philippine Holdings Corporation (FPH)
- Globe Telecom (GLO)
- International Container Terminal Services Inc. (ICT)
- JG Summit Holdings (JGS)
- Jollibee Foods Corporation ( JFC)
- Lepanto Consolidated Mining Company (LC / LCB)
- Manila Electric Company (MER)
- Manila Water Company (MWC)
- Megaworld Corporation (MEG)
- Metro Pacific Investments Corporation (MPI)
- Metropolitan Bank and Trust Company (MBT)
- Philex Mining Corporation (PX)
- Philippine Long Distance Telephone Company (TEL)
- Robinsons Land Corporation (RLC)
- Security Bank Corporation (SECB)
- SM Investments Corporation (SM)
- SM Prime Holdings (SMPH)
- Universal Robina Corporation (URC)
The PSEi is revised twice a year. Starting this year, the recomposition periods are in March and September, revised from the previous May and November schedule. Thus, the new PSEi member-stocks, if any, will be announced in September 2011.
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