New strategy: Buy stocks deleted from PSEi and sell stocks added to PSEi?

Stock report by: AB Capital Securities
Category: FREE Reports

NOTE: This is a preview of a Premium-exclusive report we regularly provide to our Premium Access members! To access this and similar exclusive stock reports in full, upgrade today to Premium Access for as low as P399.00 a month. Be a smart investor with PinoyInvestor!


The PSE announced last Friday the results of its review of the widely followed PSE index (PSEi). As widely anticipated by the market, Megaworld Corporation (MEG) and Robinsons Land Corporation (RLC) will be replaced by DMCI Holdings, Inc. (DMC) and Union Bank of the Philippines (UBP) by February 6. These changes will be carried out on Friday, February 4, 2023.

Our recommendation: Buy ??? and sell ???.

Interestingly, what we have seen since 2020 is that the PSE index additions have… Meanwhile in the succeeding weeks, the other stocks further rose in price, peaking at 27% upside after around 120 days.

How the stocks fared throughout the next 228 days (approximately 1 year after effectivity) can be seen in the following table.

Stocks added to PSEiStocks deleted from PSEi
Effectivity day-5%5%
30 days afterUpgrade toPremium Access
60 days after??????
120 days afterto viewfull stock reports
180 days after??????
228 days after-??????

Data shows that stocks added to the PSEi saw price reductions, declining by 5% on effectivity date and …

For the February 2023 rebalancing, implementation day is on Friday, February 4, 2023. Based on the last 5 rebalancings, a holding period of … appears to be the optimal holding period that maximizes the return on this strategy.

This report is prepared by PinoyInvestor’s partner broker below. Find out more about our partner brokers and sign up to avail their complete trading brokerage services.

AB Capital Securities

AB Capital Securities

AB Capital Securities is one of the Philippines’ leading stock brokerage firms with over 65 years of industry experience. Learn more about them here.
Most Recent Special Reports
Latest PSE Outlook Reports
Most Recent Technical Analyses
Latest Company Analyses