Puregold gets in on 30-stock PSEi, Emperador goes out

Puregold Price Club Inc. will become a PSE index (PSEi) member for the first time since listing in 2011, while Emperador Inc. will be removed from the list of PSEi components, the Philippine Stock Exchange Inc. said on Wednesday.

"These are among the changes that will be reflected on March 13, 2017, when the results of the index review covering trading activity from January to December 2016 takes effect," the exchange noted in an emailed statement.

"The PSEi review takes into account the company’s public float, which should be at least 12 percent, its inclusion in the top 25 percent of securities based on the median daily value per month for at least nine out of the 12 months, and its rank in terms of market capitalization," the PSE said.

The exchange reviews the index composition twice a year to determine which eligible companies should form part of the main and sectoral indices.

Harry G. Liu, president of stock brokerage Summit Securities Inc., said the changes do not necessarily entail any significant impact on both Puregold and Emperador.

“Puregold seems to have been chosen according to the requirements. It’s just to say that Emperador, suddenly, is not as active as it was before,” Liu told GMA News Online.

“We have a formula. It’s not by choice, it’s by formula. If you don’t qualify according to the requirements, you’ll be replaced by another issue. They make a valuation according to requirement – value, volume etcetera,” he added.

For her part, April Lynn L. Tan, research head at COL Financial Group Inc., said this could be positive for Puregold.

“There could be a temporary sell-off of Emperador, and rise of Puregold as funds sell their positions to rebalance their portfolios,” she said in.

Sectoral indices

Several changes will also be seen in the composition of sectoral indices. No new company will be added in the Financials index but AG Finance Inc. will be removed from the list.

From the Industrial index five companies will be dropped, including Concepcion Industrial Corporation, Del Monte Pacific Limited, Phoenix Semiconductor Philippines, Swift Foods Inc., and Splash Corporation

However, two companies – Holcim Philippines Inc. and Vitarich Corporation – will be included.

For the Holding Firms index, Filinvest Development Corporation will replace Unioil Resources & Holdings Company Inc.

Two companies will also join the Property index, Araneta Properties Inc. and Primex Corporation, while Suntrust Home Developers Inc. will be removed.

Meantime, Apollo Global Capital Inc. will no longer be part of the Services index.

Changes in the Mining and Oil index include the addition of Apex Mining Company Inc. and the exclusion of The Philodrill Corporation and Trans-Asia Petroleum Corporation.

"To be included in the sector indices, the common stocks of a company must rank among the top 50 percent in terms of median daily trade per month in eight out of the 12-month review period," according to the exchange.

The index review is important to determine the eligible stocks that should comprise the indices based on the set criteria, PSE President and CEO Hans B. Sicat noted.

"We know that some investors still pick stocks based on the index members, and so we want the appropriate securities to represent these indices,” Sicat said. — With Jon Viktor Cabuenas/VDS, GMA News