PSE clarifies SMPH index weight rebalancing

The Philippine Stock Exchange (PSE) issued a clarification on October 29 as regards the adjustment in the index weight of the Henry Sy-led property conglomerate SM Prime Holdings (SMPH).

The full text of the advisory posted in the PSE website goes:

The PSE would like to clarify to the investing public that the increase in the index weight of SMPH, which happened on October 25, was a result of the increase in outstanding shares of SMPH that took effect on the same day, pursuant to its merger with SM Land Inc.

The transaction was approved by the Securities and Exchange Commission and previously disclosed by the Corporation to the Exchange through Circular 7636-2013. No adjustment was made to the free float level of SMPH in the index.

Any adjustments to the free float level of index constituents arising from corporate actions are made, in general, on a quarterly basis, in accordance with Section 4.5 of the PSE Policy on Index Management. The adjustments are based on changes such corporate actions may have on the free float level as reflected in the public ownership reports submitted by listed companies.

The consolidation of all SM Group’s property units under SM Prime Holdings would make SMPH the Philippines’, and perhaps even Southeast Asia’s, largest property company in terms of market capitalization. The merger of the units under SMPH is expected to result to SMPH having a $14 billion market capitalization.

With the merger, SMPH has surpassed Ayala Land Inc. (ALI) which used to be the country’s biggest property developer with an $11 billion market capitalization.

The change in SMPH’s free float was not yet adjusted because the PSE has a rule that free float adjustments can only be made quarterly, in March, June, September and December.

SMPH shares surged 15.86% during the final minutes of Friday’s trading. It closed at P19.58 as the company’s weight in the PSEi nearly doubled to 5.3% from 3.2%. The weight rebalancing caused PSEi-tracking fund managers to buy SMPH stocks, driving upward its price.

On Wednesday, SMPH closed atP18.68, up almost 1%, while the PSE index closed at 6,597.21, up 0.82%.

Read these other interesting, related articles!


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

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

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

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

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

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

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

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.

Leave a Comment