PSE launches indices for mid-cap firms, companies that give high dividends

By Luisa Maria Jacinta C. Jocson

THE PHILIPPINE Stock Exchange, Inc. (PSE) on Monday launched two new indices, one featuring midsized companies and another focusing on firms that give consistent, high-yielding dividends.

PSE President and Chief Executive Officer Ramon S. Monzon said these thematic indices are a long overdue addition to the local bourse, which only had a main composite index, all shares index and sectoral indices.

“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,” he said in a statement.

While the PSE index (PSEi) includes the 30 largest companies, the PSE MidCap index will include the next 20 biggest companies based on full market capitalization

These are AREIT, Inc.; Bloomberry Resorts Corp., Cebu Air, Inc.; Century Pacific Food, Inc.; Cosco Capital, Inc.; DoubleDragon Corp.; DMCI Holdings, Inc.; D&L Industries, Inc.; Filinvest Land, Inc.; GMA Network, Inc.; AllHome Corp.; Manila Water Co., Inc.; Nickel Asia Corp.; Petron Corp.; Philippine National Bank; Philex Mining Corp.; Robinsons Retail Holdings, Inc.; Semirara Mining and Power Corp.; Pilipinas Shell Petroleum Corp.; and Vista Land & Lifescapes, Inc.

To be included in the MidCap index, firms should have been listed for at least 12 months and have a free float of at least 15% of its outstanding shares. They should be among the top 35% in terms of median daily trade per month in nine out of the 12-month review period, while market capitalization should be among the top 95% of the cumulative market cap of eligible companies.

“Companies in the MidCap index may be viewed as a middle ground in terms of smaller- and larger-capitalized corporates,” the PSE said in a fact sheet provided to the media.

Meanwhile, the PSE Dividend Yield (DivY) index includes 20 companies selected based on liquidity and three-year average dividend performance.

Twenty firms with the largest three-year average dividend yield, and met the free float and liquidity requirements will be included in the DivY index.

The DivY index is comprised of Aboitiz Equity Ventures, Inc.; Aboitiz Power Corp.; AREIT; Bank of the Philippine Islands; DMCI Holdings; D&L; Globe Telecom, Inc.; GMA Network, Inc.; International Container Terminal Services, Inc.; LT Group, Inc.; Metropolitan Bank & Trust Co.; Manila Electric Co.; Metro Pacific Investments Corp.; Nickel Asia; Robinsons Land Corp.; Robinsons Retail; Semirara; Security Bank Corp., PLDT, Inc.; and Universal Robina Corp.

“The PSE Dividend Yield index will create a proper benchmark for existing dividend-based mutual funds and unit investment trust funds (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,” PSE’s Mr. Monzon said.

Analysts said that the two new indices will be useful for people who want to have more focused investments.

“Not all are geared to invest in large caps, as some would like to see how mid-caps and dividend plays are doing as they move to check out available alternatives. These new indices could provide good avenues to make such reviews. If such indices can one day be watched over and participated by other fund managers, it could add volume action, as well as volatility, to these new sub-index groups,” COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said in a Viber message.

Timson Securities, Inc. trader Darren Blaine T. Pangan said in a Viber message that investors can use these new indices as a tool to “more appropriately gauge the market as well as certain baskets of issues.”

“Market participants would be able to compare how indices have performed against one another, as well as how the indices have unfolded through time,” Mr. Pangan added.

On Monday, the MidCap index opened at 1,195.10, and closed 0.03% up at 1,195.49. The DivY index opened at 1,708.56, and ended the session 0.03% lower at 1,708.00.