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Analysis and Recommendation
AP, MPI out
The PSE made unscheduled changes to the benchmark PSE index (PSEi) after Metro Pacific Investments (MPI) disclosed its preliminary tender offer report, which shows that 19.04% of its outstanding shares has been submitted for tender. This would result to a public float of 2.78% once the shares are crossed on September 26, and will pave the way for MPI’s planned voluntary delisting.
Aboitiz Power Corp. (AP), on the other hand, submitted a Public Ownership Report showing that its public float has fallen to 19.98% as of September 18 following a series of related party and share buyback transactions. This disqualifies it from inclusion in the PSEi, which requires a public float of at least 20.0%. Additional transactions after the said date has taken AP’s public float lower to 19.86%.
BLOOM and CNPF are in
Enrique Razon’s integrated casino developer Bloomberry Resorts Corp. (BLOOM) and the Po Brothers’ processed food maker Century Pacific Food, Inc. (CNPF) are set to replace AP and MPI on the PSE Index.
BLOOM was previously removed from the index due to a massive drop in its market capitalization during the COVID-19 lockdowns, while CNPF will be added to the index for the first time. Changes to the index composition will take effect on market open on September 26.
Which company is next?
As things stand, we don’t expect further changes to be made when the scheduled rebalancing is announced in February. However, it is still too early to tell, and off-hand Converge ICT Solutions (CNVRG) is perilously close to falling out of the top 30 in terms of market capitalization.
In the event that its share price falls further, Nickel Asia Corp. (NIKL) would be next in line for inclusion in the index.
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