AREIT and Chinabank to be added to PSEi

The PSE announced that AREIT [AREIT 40.10 ?0.1%; 189% avgVol] and Chinabank [CBC 69.50 unch; 69% avgVol] will be added to the Philippine Stock Exchange Index (PSEi) [link], effective February 3. Nickel Asia [NIKL 3.11 ?1.3%; 10% avgVol] and Wilcon Depot [WLCON 9.35 ?0.8%; 0% avgVol] will be deleted from the PSEi on that date to make room for the two new entrants. AREIT is the first REIT to be added to the PSEi’s roster, which PSE President Ramon Monzon said was a “good example for REIT issuers that aspire to maximize this particular type of listing vehicle.”

MB BOTTOM-LINE:  I’ve since forgotten the specific stats, but the overwhelming majority of trading volume on our tiny exchange is focused on just the 30 stocks in the PSEi. While AREIT and CBC were getting enough volume organically outside the PSEi to support inclusion to the index, once effective, their addition will expose the stocks to a much larger pool of potential buyers. There are many foreign banks, funds, and private investment houses that invest in the PSE, but which are only authorized by their own governance or trading policies to play with stocks listed in the PSEi. Generally speaking, the greater the pool of potential buyers, the higher the price. 

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