Recently updated on: February 9, 2024
The Philippine Stock Exchange added two new thematic indices in our local bourse that will significantly help people looking for valuable companies in the middle of the pack through the PSE MidCap Index.
Table of Contents
- What is the PSE MidCap Index?
- PSE MidCap Index Company Composition 2024
- Advantages of Using PSE MidCap Index
What is the PSE MidCap Index?
According to the PSE Fact Sheet, the PSE MidCap Index aims to capture the performance of mid-sized companies in the Philippine Stock Exchange through these methodologies:
- Listing History. The company must be listed for at least 12 months.
- Free Float. Free float of at least 15% of its outstanding shares.
- Liquidity. Must be among the Top 35% of median daily trade per month in nine of the twelve months.
- Market Capitalization. MCAP must be among the top 95% of the cumulative MCAP of eligible companies.
- Financial Criteria. It must be financially sound.
- Financial Selection. The 20 largest companies are based on full market capitalization, excluding those already included in the PSEi.
Basically, the PSE MidCap Index will consist of the top 20 listed companies outside of the 30-company Philippine Stock Exchange Index (PSEi) that satisfy listing history, free float, liquidity, market cap, and financial criteria.
PSE MidCap Index Company Composition 2024
| # | Security Name (Industry) | Ticker Symbol |
|---|---|---|
| 1 | AREIT, Inc. | AREIT |
| 2 | Cebu Air, Inc. | CEB |
| 3 | China Banking Corporation | CHIB |
| 4 | Cosco Capital, Inc. | COSCO |
| 5 | DDMP REIT, Inc. | DDMPR |
| 6 | D&L Industries, Inc. | DNL |
| 7 | GMA Network, Inc. | GMA7 |
| 8 | Ginebra San Miguel, Inc. | GSMI |
| 9 | The Keepers Holdings, Inc. | KEEPR |
| 10 | Megaworld Corporation | MEG |
| 11 | MREIT, Inc. | MREIT |
| 12 | Manila Water Company, Inc. | MWC |
| 13 | Petron Corporation | PCOR |
| 14 | Philippine National Bank | PNB |
| 15 | RL Commercial REIT, Inc. | RCR |
| 16 | Robinsons Land Corporation | RLC |
| 17 | Robinsons Retail Holdings, Inc. | RRHI |
| 18 | Security Bank Corporation | SECB |
| 19 | Synergy Grid & Development Phils., Inc. | SGP |
| 20 | Shell Pilipinas Corporation | SHLPH |
Advantages of Using the PSE MidCap Index
1. Companies with the potential to be included in the PSEi.
Companies in the PSE MidCap index have a high chance of moving up to the Top 30 companies in the Philippines, potentially increasing their liquidity and demand, especially among large investors and institutions. This will, in turn, increase your potential gains in the market.
For instance, Bloomberry Resorts Corporation (BLOOM), Nickle Asia Corporation (NIKL), DMCI Holdings, Inc. (DMC), Century Pacific Foods, Inc. (CNPF), and Semirara Mining and Power Corporation (SCC) were all part of PSE MidCap Index's inaugural compositions but were now back to the PSEi.
2. A way to diversify your portfolio.
Since the MidCap Index is composed of companies in the middle ground of the PSE, there is a balance in terms of risks and rewards compared to the heavy large caps or the highly volatile small caps. It's also an excellent way to diversify your portfolio.
You can also use the PSE MidCap Index to measure the performance of some of your investments, similar to how the PSEi is used to measure the stock market.
3. You can use it to filter your watch list.
Similar to how some of these stocks are demoted from the PSEi or promoted from a growth story, you can use the PSE MidCap Index as your filter, especially when choosing stocks in the middle of the pack that can potentially move in the future.
Also, since the PSE reviews the MidCap Index twice a year, you can see how your stocks in the list are performing.
4. Dividend Opportunities
Although there is a separate PSE index for dividend stocks, called the PSE DivY Index, some of the stocks in the MidCap index are also listed in the Dividend Yield index, which are good options for your dividend investing strategy, like AREIT, CHIB, DNL, MREIT, RCR, RRHI, and SGP.