Market capitalization up 25% to P5T

Total market capitalization of companies listed on the Philippine Stock Exchange (PSE) grew 25 percent in the first five months this year to P5 trillion, from P4 trillion the previous year period due to the improvement in stock prices.

Excluding the two foreign companies listed in the PSE, market capitalization jumped 46 percent to P2 trillion from P1.4 trillion. The two foreign firms – Canadian insurance giants Manulife Financial Corp. and Sun Life Financial Inc. – account for 60 percent of total market capitalization.

"This significant leap was a result of the general uptrend of market prices, together as well as the listing of four companies from June 2004 to May this year," PSE president Francis Lim said.

PetroEnergy Resources Corp. (PERC) was listed by way of introduction in August 2004 while International Exchange Bank, the sole initial public offering (IPO) in 2004, was listed in December. Manila Water Co., Inc. and SM Investments Corp. were both listed in March this year.

The general rise in market prices is supported by improved market activity as evidenced by a significant increase in value turnover, which ballooned by 162 percent to P196.5 billion from P74.9 billion a year ago.

Among sectors, the mining index registered the highest growth rate in both market capitalization and value turnover. Mining sector market capitalization expanded by 219 percent to P28 billion in May 2005 from P9 billion last year. Its value turnover, meanwhile, surged 8,340 percent to P12 billion from a measly P0.1 billion in the same period last year.

This translated to an increase in the percent share of the mining sector to domestic market capitalization to 1.4 percent from only 0.6 percent and likewise, to the percentage share in trading value to 6.1 percent from 0.2 percent. This showed that the mining sector clearly benefited from the December 2004 Supreme Court ruling which upheld the constitutionality of the Philippine Mining Act of 1995 and the Financial and Technical Assistance Agreements between the government and foreign mining firms.

The value of listed issues is measured by market capitalization. In the Philippine equities market, value can be evaluated using total market Capitalization, which considers all listed issues in the PSE.

Philippine Long Distance Telephone Co. (PLDT) and food conglomerate San Miguel Corp. (SMC) remained the two largest domestic listed companies with a capitalization of P252.1 billion and P223.5 billion as of May 2005, respectively.

SM Investments ranked third while companies under the Ayala conglomerate clinched the fourth to seventh slots – Ayala Corp. Globe Telecom Inc., Bank of the Philippine Islands, and Ayala Land Inc., respectively.

SM Prime Holdings Inc. ranked eighth while Metropolitan Bank and Trust Co. and Equitable PCI Bank (EPCI) made it to the ninth and tenth spot, respectively.