Investors find excuse to sell PHL shares on changes in MSCI

News of a shift in MSCI Global Equity Indices composition affecting Philippine stocks gave investors an excuse to cash in on gains, lending weakness to share prices in early trades Thursday following three successive days of closing at all-time highs.

 

"The market opened down as the main driver is the movement in MSCI," Brian Ramos, analyst at Angping & Associates Securities Inc., told GMA News Online. "Major stocks like Megaworld were removed from MSCI," he added.

 

The benchmark PSEi plunged by 117.29 points or 1.59 percent to 7,274.910 as of 10:33 a.m.

 

MSCI on Wednesday announced the results of the May 2013 Semi Annual Index Review for the MSCI Equity Indices, which will take effect on May 31, 2013.

The MSCI Global Equity Indices are widely tracked global equity benchmarks and serve as the basis for over 500 exchanged traded funds throughout the world, giving investors an idea on what stocks to buy, according to MSCI.

 

For the Philippines, Metro Pacific Investments Corporation was added to MSCI Global Standard Indices while San Miguel Corp was dropped.

 

For the MSCI Global Small Cap Indices,  blue chips Megaworld Corporation and Robinsons Land Corporation were deleted, along with GT Capital Holdings Inc., Puregold Price Club Inc., and Security Bank Corporation.

 

Added to the small cap indices were D&L Industries, EEI Corporation, Pepsi-Cola Products Philippines Inc., RFM Corporation and San Miguel Purefood Company Inc.

 

For Philippine stocks, Ramos said this news helped offset the over night gains on the US market. "The market is bearish today and the Wall Street gains might be offset by MSCI news."

 

"Kapag na-delete ang isang stock sa MSCI, mag-ta-tanggal ng funds sa stock na 'yun... Addition in MSCI will attract more funds," he added.

 

US stocks rose on Wednesday, with the Dow and S&P 500 hitting all-time highs in a broad market rally as the recent upward momentum persisted, according to Reuters.

 

The Dow Jones industrial average rose 60.44 points, or 0.40 percent, to a record 15,275.69 at the close. The Standard & Poor's 500 Index added 8.44 points, or 0.51 percent, to finish at a record 1,658.78. The Nasdaq Composite Index gained 9.01 points, or 0.26 percent, to close at 3,471.62. — VS, GMA News