2012 PSE index (PSEi): Cebu Pacific out, Petron in

Those holding Cebu Pacific (CEB) stocks are probably wondering what’s causing the stock to plummet during the past trading days. In just one week, the stock price of budget airline Cebu Pacific has declined by 9.3%, closing at P61.40 in last Friday’s (August 24) trading.

It’s actually been a losing battle for CEB stockholders since the company’s hyped initial public offering (IPO) in 2010. On its first trading day on the Philippine Stock Exchange (PSE) in October 2010, Cebu Pacific rose to P133.00 from its IPO price of P125.00. Unfortunately, the stock has not recovered from that all-time high price. It even ended the year 2011 at half the price, closing at P64.80 on the last trading day.

The stock recovered a bit in February 2012, hitting a year’s high of P75.65, but it subsequently succumbed to selling pressure due to rising fuel costs and stiff competition from other budget airline companies. Year to date (from January to August 2012), the stock is down 6.5%.

CEB’s stock price falls

Add to its current woes is the decision of the country’s bourse to remove Cebu Pacific’s stock from the Philippine Stock Exchange index (PSEi), a basket index of 30 publicly traded companies generally considered a benchmark of the state of the Philippines’ economic health.

Being delisted from the PSEi sends a subtle signal that a company is unable to perform at par with the 30 “top-tier” companies, which explains why some investors have decided to dump the Cebu Pacific stock after the revised PSEi was announced.

More importantly, the decline in prices may have been brought about by the sudden unloading of foreign fund managers who have a mandate to invest only in PSEi stocks.

PCOR replaces CEB in PSE index

Effective September 10, oil refiner Petron Corp. (PCOR) will take over CEB’s slot in the PSEi.  The decision is based on a regular assessment conducted by the PSE using “enhanced objective criteria for inclusion” that will “provide improved stability and predictability in our main index,” according to the PSE statement.

Cebu Pacific was delisted from the PSE index after its full market capitalization value fell below the top 35 position (among a list of 254 publicly listed companies) as a result of the stock’s dragging market price.

Petron Corp. was added following Section 3.2 of the PSE’s “Rules for Insertions and Removals (in the PSEi)” stating that a company shall be inserted in the benchmark index if “it rises above the 25th position by full market capitalization (MCAP), to replace the company that ranks the lowest.”

PSEi eligibility requirements

Aside from these rules, companies must abide by the following policies in order to remain in the PSE index:

  • 1. Free Float requirement — at least 12% of a company’s outstanding stocks must be public float, or shares that are freely available and tradable in the market;
  • 2. Liquidity requirement — the liquidity criterion requires stocks to belong to the top 25% by median daily value turnover per month for at least nine out of 12 months; and
  • 3. Full Market Capitalization — companies that pass the first two criteria are ranked from highest to lowest based on volume-weighted average price during the review period.

New PSEi composition, as of September 2012

With the entry of Petron Corp. and the removal of Cebu Pacific, the revised PSE index (PSEi) will now be composed of the following 30 companies starting September 10, 2012.

  1. Ayala Corp. (AC)
  2. Aboitiz Equity Ventures (AEV)
  3. Alliance Global Group Inc. (AGI)
  4. Ayala Land Inc. (ALI)
  5. Aboitiz Power Corp. (AP)
  6. BDO Unibank (BDO)
  7. Belle Corp. (BEL)
  8. Bank of the Philippine Islands (BPI)
  9. DMCI Holdings (DMC)
  10. Energy Development Corp. (EDC)
  11. First Gen Corp. (FGEN)
  12. Globe Telecom (GLO)
  13. International Container Terminal Services Inc. (ICT)
  14. Jollibee Foods Corp. (JFC)
  15. JG Summit Holdings (JGS)
  16. Metropolitan Bank & Trust Co. (MBT)
  17. Megaworld Corp. (MEG)
  18. Manila Electric Co. (MER)
  19. Metro Pacific Investments Corp. (MPI)
  20. Manila Water Co. Inc. (MWC)
  21. Petron Corp. (PCOR)
  22. Philex Mining Corp. (PX)
  23. Robinsons Land Corp. (RLC)
  24. Semirara Mining Corp. (SCC)
  25. SM Investments Corp. (SM)
  26. San Miguel Corp. (SMC)
  27. SM Development Corp. (SMDC)
  28. SM Prime Holdings (SMPH)
  29. Philippine Long Distance Telephone Co. (TEL)
  30. Universal Robina Corp. (URC)

Related reading:

About the Author

PSEi support seen at 6,200 and 6,000 amid weaker Peso

In a not-so-surprising move, the U.S. Federal Reserve (Fed) yesterday raised interest rates by 75 basis points (bps) or 0.75% in a bid to tame rising inflation in the United States. This was the third consecutive 0.75% rate hike by the Fed, which brings the federal funds rate, the central bank’s benchmark interest rate, to ... Read more

Official SWIFT Code of BDO, BPI, Metrobank, Philippine banks

When sending cash remittances or wire transfer to a bank account in the Philippines (such as BDO, BPI, Metrobank, Landbank, DBP, etc.), you’ll surely need the SWIFT Code of the bank. Look no further because you can find all the SWIFT Codes you need in this list! Make sure you’re using the right bank code ... Read more
blank

How to Waive your Credit Card Annual Fee (BDO, BPI, Metrobank, RCBC, Citibank, UnionBank)

Without a doubt, one of the most annoying fees that credit cardholders have to pay is the annual fee. Majority of cardholders are familiar with this fee and majority of us likely pay this grudgingly year after year after year. In the case of my credit card with BPI (Bank of the Philippine Islands), I’m ... Read more
blank

Why Filipinos do not become business owners or entrepreneurs

For a majority of Filipinos, entrepreneurship does not seem to be a typical, expected path. This is not surprising, considering that in school, students are primarily taught to become employees after graduation. Students train for years to become staff workers, reporting to a supervisor, and just waiting to receive their wages or salaries every month. ... Read more
blank

My experience investing in Mutual Funds in the Philippines

I started investing in mutual funds when I was 22 years old. As an Overseas Filipino Worker (OFW) then, I was fortunate to be able to save some money at that young age because of my work abroad. One time while I was on vacation in the Philippines, I saw a large billboard in EDSA ... Read more
blank

Income Tax Tables in the Philippines (2022)

The Philippines’ new tax reform bill, known as TRAIN or Tax Reform for Acceleration and Inclusion, was signed into law on December 19, 2017 and its implementation began on January 1, 2018. What are the new income tax rates under the TRAIN law? How will TRAIN affect income taxes of individuals and corporations? How is the ... Read more
blank

PSE Stocks Performance under each Philippine President (1987-2021)

Did you know that Philippine stocks were able to achieve an astounding growth of 800% in a span of 30 years? From 1987 until 2018, the Philippine Stock Exchange index (PSEi) rose from 1,000 points to a peak of 9,000 points — generating a return of 800% over 30 years. (The PSEi is an index ... Read more
blank

SSL 2022: Salary Increases for Teachers, Nurses, Gov’t Employees

Good news to all government employees! There’s a new round of salary increases beginning January 1, 2022! Millions of employees of the Philippine government — including public school teachers, nurses and staff of government hospitals, and workers in local and national government agencies, etc. — will be getting an automatic salary adjustment this 2022 under ... Read more
blank

PSE Trading Hours in 2022: What time open, when closed?

Before you take the plunge into stock trading and investing, make sure you understand what stocks are and how the Philippine Stock Exchange (PSE) operates. Unlike other investments that are relatively safe, stock trading is risky and loss of money is a possibility. So before you deep dive into the exciting world of stock trading, ... Read more

Price Floor and Price Ceiling of PSE Stocks

Trading bands in the PSE come in two forms: Price Ceiling, or the upper price limit, and Price Floor, or the lower price limit.

3 thoughts on “2012 PSE index (PSEi): Cebu Pacific out, Petron in”

  1. So for those who have CEB stock, what’s the next best course of action? Do I still hold it or sell already and just accept the loss (instead of waiting it to depreciate more)?

    Reply
  2. Wealthy and traveling anywhere and whenever I want with my doggie, plus helping get dogs fixed, and those that need homes, and organizations that do thus and such.

    Reply
  3. You’ve got a beautiful portrait of Rebecca Van Dyck. From a Levi’s Director of Marketing to Head of Marketing, Facebook, this lady must be a marketing genius.

    Reply

Leave a Comment