Meralco back on the PSEi, Manila Water out

Manila Electric Company will replace Manila Water Company Inc. on the Philippine Stock Exchange index (PSEi) – a benchmark consisting of 30 stocks – beginning March 17. 

 

The decision was made following a review covering the trading activity from January to December 2013, the PSE said in a statement Monday. 

 

The PSEi consists of the country’s 30 most liquid and well-capitalized companies.

 

“The regular review of our indices to capture the latest trends in trading activity is a significant part of global best practices on index management,” said PSE president and chief executive officer Hans Sicat. 

 

Companies on the PSEi must maintain a higher free float level of 12 percent compared with the minimum 10 percent for listed companies.

 

Meralco – the Philippines largest power distributor – has market a capitalization of P307.697 billion and free float level of 13.19 percent, PSE data show. 

 

Manila Water has a market capitalization of P50.159 billion and free float level of 58.7 percent. 

 

The last time the PSE changed the index composition was on September 16, 2013, when the LT Group Inc. and GT Capital Holdings replaced Meralco and Belle Corp. 

 

Joanna Capiral, equity analyst at Papa Securities Corp., said Meralco's return to the PSEi after hitting the minimum public float of 12 percent for index stocks. 

 

“It was removed from the index because its float fell below 12 percent before,” she noted. 

 

With Meralco back on the PSEi, Capiral sees a better stock price for the issue as “foreign fund managers are required to hold positions in blue chip stocks.”

 

PSE is the only stock exchange in the Philippines with 258 listed companies and 135 active trading participants. – Siegfrid Alegado/VS, GMA News