Synergy Grid joins MSCI global index

MANILA, Philippines — Listed Synergy Grid and Development Philippines Inc. (SGP), the indirect controlling shareholder of power transmission operator National Grid Corp. of the Philippines (NGCP), is seen to attract investments from foreign funds after it has been included in the MSCI World Small Cap Index.

SGP was added in the index effective May 31, six months after it listed its shares from its follow-on offering in November last year.

With its current market capitalization of about $1.24 billion, SGP sits above the median capitalization of the MSCI World Small Cap Index, which currently sits at around $963.76 million as of the April Index update.

“The inclusion of Synergy Grid in the Index in a short amount of time from its listing late last year is proof of the notable performance of its main asset, NGCP. It is an affirmation as well that the route taken to list at the time we did was well-received by the market,” SGP vice chairman Robert Coyiuto Jr. said.

MSCI is the world’s leading index provider and is widely followed by foreign funds and institutions.

The MSCI World Small Cap Index captures small cap representation across 23 developed market (DM) countries. With 4,502 constituents, the Index covers approximately 14 percent of the free float-adjusted market capitalization in each country.

SGP’s inclusion in the MSCI World Small Cap Index bodes well for the company since many active and passive funds track this benchmark, Regina Capital Development Corp. Business Development head Luis Limlingan said in a Viber message.

“In addition, it builds on the company’s reputation, by getting the attention of funds. This is also a testament to the company’s strong financial performance and long term prospects moving forward,” he said.

SGP indirectly controls 60 percent of the outstanding capital stock and owns an effective interest of 40.2 percent of NGCP, its sole operating asset.

NGCP holds the sole and exclusive concession and franchise for the operation of the Philippines’ transmission network, linking power generators and distribution utilities to deliver electricity to power distributors and cooperatives nationwide.

In the next 13 years, NGCP has committed to invest approximately P440 billion across 211 projects that are aimed to support the growing electricity demand in the country and to make the country’s power backbone continuously reliable.

The massive multi-year investment will support the expected growth in demand at an annual average growth rate of 6.23 percent for 2021 to 2025, 6.73 percent for 2026 to 2030, and 6.49 percent for 2031 to 2040, as detailed in the 2021 consultation draft of the Transmission Development Plan (TDP), which details the plans to expand, develop, and monitor the grid throughout the country.

NGCP is 60 percent controlled by Filipino-owned entities One Taipan Holding Corp.’s Monte Oro Grid Resources led by Henry Sy Jr. and Pacific21’s Calaca High Power Corp. led by Coyiuto.  The remaining 40 percent is held by State Grid Corp. of China (SGCC) as its technical partner.