PSE launches two new indices
The Philippine Stock Exchange, Inc. (PSE) launched the PSE MidCap Index and PSE Dividend Yield Index on Monday. The former was designed to showcase the mid-sized companies while the latter highlights the companies that consistently give high-yielding dividends.
PSE President and CEO Ramon Monzon said, “Ever since, we only have the main composite, All Shares and sectoral indices in the PSE. These thematic indices are long overdue and we are pleased to finally make available the first two sets of new indices.”
“In developing these indices, we consulted with market participants to ensure that the selection criteria and methodology are acceptable to those who want to track or benchmark on the new indices,” Monzon explained.
Both indices have 20 constituents and the index members as of the February 2022 recomposition stemmed from a review of companies from January to December 2021.
The base date and base level for both indices is December 30, 2010 at 1,000. At the launch, the PSE MidCap Index and the PSE Dividend Yield Index will have 1,195.10 and 1,708.56 as their starting levels, respectively, representing an increase of 19.5 percent and 70.9 percent from their base levels, based on the 11-year backtesting conducted by the PSE. The subsequent levels will be computed at the end of every trading day.
At the close of Monday’s trading, the PSE MidCap Index ended at 1,195.49 up by 0.39 points or 0.03 percent while the PSE Dividend Yield Index was at 1,708.00 down by 0.56 points or 0.03 percent.
For inclusion in the PSE MidCap Index, a company must be listed for at least 12 months during the review period and must have a free float of at least 15 percent of its outstanding shares at the end of the 12-month period. Market capitalization, liquidity and financial performance are the other criteria considered.
The companies included in the PSE Mid Cap Index are AREIT, Inc. (AREIT), Bloomberry Resorts Corporation (BLOOM), Cebu Air, Inc. (CEB), Century Pacific Food, Inc. (CNPF), Cosco Capital, Inc. (COSCO), DoubleDragon Corporation (DD), DMCI Holdings, Inc. (DMC), D&L Industries, Inc. (DNL), Filinvest Land, Inc. (FLI), GMA Network, Inc. (GMA7), AllHome Corp. (HOME), Manila Water Company, Inc. (MWC), Nickel Asia Corporation (NIKL), Petron Corporation (PCOR), Philippine National Bank (PNB), Philex Mining Corporation (PX), Robinsons Retail Holdings, Inc. (RRHI), Semirara Mining and Power Corporation (SCC), Pilipinas Shell Petroleum Corporation (SHLPH), and Vista Land & Lifescapes, Inc. (VLL).
To qualify for inclusion in PSE Dividend Yield Index, companies should have regularly issued cash dividends for the past three consecutive years. Companies must also be listed for at least 12 months during the review period and at least six months for Real Estate Investment Trusts. The free float, liquidity and financial performance of companies are also evaluated.
The companies included in the PSE Dividend Yield Index are Aboitiz Equity Ventures, Inc. (AEV), Aboitiz Power Corporation (AP), AREIT, Inc. (AREIT), Bank of the Philippine Islands (BPI), DMCI Holdings, Inc. (DMC), D&L Industries, Inc. (DNL), Globe Telecom, Inc. (GLO), GMA Network, Inc. (GMA7), International Container Terminal Services, Inc. (ICT), LT Group, Inc. (LTG), Metropolitan Bank & Trust Company (MBT), Manila Electric Company (MER), Metro Pacific Investments Corporation (MPI), Nickel Asia Corporation (NIKL), Robinsons Land Corporation (RLC), Robinsons Retail Holdings, Inc. (RRHI), Semirara Mining and Power Corporation (SCC), Security Bank Corporation (SECB), PLDT Inc. (TEL), and Universal Robina Corporation (URC).
According to Monzon, “The PSE Dividend Yield Index will create a proper benchmark for existing dividend-based mutual funds and UITFs. Currently, the performance of these funds are compared with the PSEi because the stock market does not have a dividend index to match it to.”
“With the launch of these two indices, we hope to see more funds created that will track these new benchmarks. We think this will also provide fund managers and investors the opportunity to diversify their portfolio.” Monzon added. PSE
