Shares of SM Prime Holdings, Inc. (SMPH) spiked by 15.86% to close at Php19.58 from Php16.90 as its weight on the Philippine Stock Exchange Index or the PSEi was revised upwards to 5.3% from 3.2%. SMPH’s announcement regarding the decrease in its public float to 26.50% from 30.49% and the increase in its authorized capital stock led the PSE to recalculate and rebalance its weighting. This triggered the major local index tracker (passive) funds to adjust their weights in their respective portfolios as well. Note that any change in the index must be followed religiously by the index trackers and any buy and sell orders are executed before the run-off to minimize their tracking error.
SMPH, however, is seen to normalize and fall to at least Php17.90 on once trading resumes next week. Moreover, any adjustment on the company’s shares outstanding may then negatively impact its share price.
Shares of ALI, SM, AEV, and AC fell as their weights have been reduced to accommodate the increase in SMPH.