{"id":331279,"date":"2025-01-28T00:16:20","date_gmt":"2025-01-27T16:16:20","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=331279"},"modified":"2025-01-28T00:16:21","modified_gmt":"2025-01-27T16:16:21","slug":"commentary-as-predicted-areit-cbc-joins-psei-while-wlcon-nikl-kicked-out","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/commentary-as-predicted-areit-cbc-joins-psei-while-wlcon-nikl-kicked-out\/","title":{"rendered":"Commentary: As predicted, AREIT, CBC joins PSEi while WLCON, NIKL kicked out"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">PSE index review was as expected<\/h3>\n\n\n\n<p>In line with our <a href=\"https:\/\/www.pinoyinvestor.com\/smartinvestor\/commentary-these-2-stocks-poised-to-join-psei-as-wlcon-nikl-faces-potential-forced-exit\/\">forecast weeks ago<\/a>, the PSE moved NIKL and WLCON from the benchmark PSE index to the Midcap Index. These two names will be replaced by AREIT and CBC. <\/p>\n\n\n\n<p>Notably, AREIT will be the first REIT to be included in the PSEi, highlighting the rising prominence of REITs as a viable investment instrument. CBC, on the other hand, will be making an index comeback after its rather short-lived inclusion from 2010-2011. <\/p>\n\n\n\n<p>CBC will be joining the Big Three banks (BDO, BPI, and MBT) on the PSEi, in line with its status as the fourth largest privately-owned bank in terms of assets. Other fun facts: AREIT will be the sixth Ayala-owned company on the index, joining AC, ACEN, ALI, BPI, and GLO, while CBC will be the fourth Sy-led company, joining BDO, SM, and SMPH. <\/p>\n\n\n\n<p>The changes will be effective on February 3, and we expect portfolio rebalancing activities to commence early and culminate on January 31.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Weight changes<\/strong><\/h3>\n\n\n\n<p>AREIT and CBC\u2019s combined free-float weighted market cap of P157.8-Billion is many magnitudes bigger than NIKL and WLCON\u2019s P30.2-Billion, which may result in fairly significant across-the-board downweights to existing index names to make room for the new entrants. <\/p>\n\n\n\n<p>One stock that may be spared from the sell-off is BPI, which may be upweighted due to its free-float increasing from 48.71% as of the last index rebal to 51.17% as of December 2024.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Action Plan<\/strong><\/h3>\n\n\n\n<p>We currently have a HOLD rating on CBC due to its last traded price being above the consensus Target Price (TP) of P63.50. <\/p>\n\n\n\n<p>We also have a HOLD rating on both NIKL and WLCON despite both having potential upside to their respective TPs of P3.56 and P16.79, due mainly to our expectations of index removal and some fundamental weaknesses that are unique to each company.<\/p>\n\n\n\n<p>On the other hand, we have a BUY rating on AREIT and it remains one of our top REIT recommendations for this year. <\/p>\n\n\n\n<p>The index changes have been widely anticipated and should be at least partially priced in at this point, but we may still see some buying pressure on AREIT and CBC and selling pressure on NIKL and WLCON.<\/p>\n\n\n\n<p>There would typically be a correction after portfolio rebalancing activities are completed, so we should see a retracement for the new inclusions and a short-term bounce on the removals. We should also expect a fairly substantial drop from the index on January 31 due to the expected downweight on existing index components.<\/p>\n\n\n\n<div style=\"height:26px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p style=\"font-size:16px\"><em><em>This report is prepared by PinoyInvestor\u2019s partner broker below. Find out more about <a href=\"https:\/\/www.pinoyinvestor.com\/smartinvestor\/our-partner-brokers\/\">our partner brokers<\/a> and sign up to avail their complete trading brokerage services.<\/em><\/em><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here\u2019s a commentary on an important issue or event affecting the stock market<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1124,11],"tags":[],"class_list":["post-331279","post","type-post","status-publish","format-standard","hentry","category-commentaries-special-reports","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/331279","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=331279"}],"version-history":[{"count":1,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/331279\/revisions"}],"predecessor-version":[{"id":331281,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/331279\/revisions\/331281"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=331279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=331279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=331279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}