The Philippine Stock Exchange (PSE) is removing Union Bank of the Philippines (UnionBank/UBP) from the PSEi, PSE Dividend Yield (PSE DivY), and Financials indices starting Oct. 4, 2023.
In a memorandum, the bourse said that “a downward adjustment was made to UBP's free float that resulted in UBP’s non-compliance with the 20 percent minimum free float level required for index inclusion.”
It added that, “the said adjustment was made based on further determination by the Exchange that a number of shares reported by UBP as public should be classified as non-public, in accordance with Section 2.2 of the PSE Policy on Index Management and consistent with the treatment of such shares that are similar in nature.”
Under the PSE's new rules, shares of the Social Security System in UnionBank are now considered non-public shares because the institution has seats in the bank's board of directors.
The PSE noted though that “UBP remains well-above the 10 percent minimum public ownership requirement for continuing listing." Nickel Asia Corporation will be taking UnionBank's place in the prestigious PSEi's basket of 30 stocks.
Just this week, the PSE removed Metro Pacific Investments Corporation (MPIC) and Aboitiz Power Corporation (AboitizPower) from its benchmark index and replacing them with Bloombery Resorts Corporation and Century Pacific Food Inc.
“In view of the recent developments in certain constituents of the PSEi (PSE index) and other indices, the PSE is announcing several changes to the PSEi, PSE Dividend Yield (PSE DivY), PSE MidCap, and sector indices,” the memo said.
It added that, “the index constituent update is based on the requirements for inclusion in the PSE Index Series under the Exchange’s Policy on Index Management.”
Both firms were removed from the index after their public floats fell below the required 20 percent for inclusion in the PSE index.
A tender offer from a management-led consortium reduced MPIC’s public float to just 2.78 percent with the consortium acquiring 19.04 percent of MPIC’s outstanding capital while the Government Service and Insurance System also took the opportunity to increase its stake in MPIC to 12 percent.
On the other hand, an ongoing share buyback program as well as acquisitions by its directors and officers from the market resulted in a drop in AboitizPower’s public ownership.