SM Prime doubles PSE index weight

MANILA, Philippines - The Philippine Stock Exchange (PSE) has shed light on the increase in weight of the country’s largest integrated property developer in the local bourse’s bellwether index.

Higher weight contribution of SM Prime Holdings Inc. (SMPH) in the PSE index (PSEi) prompted investors to gobble shares of Henry Sy’s umbrella property firm.

“The PSE would like to clarify to the investing public that the increase in the index weight of SMPH, which happened on Oct. 25, was a result of the increase in outstanding shares of SMPH that took effect on the same day, pursuant to its merger with SM Land Inc.,” the PSE said in a public advisory.

Early this month, the Securities and Exchange Commission approved the merger of SMPH and SM Land in line with the consolidation of all property assets of the SM conglomerate. The authorized capital stock of SMPH was also doubled to P20 billion from P10 billion.

Shares of SMPH surged 15.86 percent to P19.58 each on Friday as the company’s weight in the PSEi jumped to nearly six percent from around three percent. Index tracking fund managers then accumulated SMPH stocks.

“Any adjustments to the free float level of index constituents arising from corporate actions are made, in general, on a quarterly basis, in accordance with Section 4.5 of the PSE Policy on Index Management,” the PSE said.

The PSE said the adjustments are based on changes such corporate actions may have on the free float level as reflected in the public ownership reports submitted by listed companies.