This comes after results from a draft simulation, meant only for feedback, sparked market volatility on Thursday when traders mistook the data as final, triggering sharp price swings in several top-listed firms.
Industry stakeholders yet to weigh in
“The Philippine Stock Exchange Inc. is soliciting comments from key stakeholders (e.g., fund managers and certain foreign and local brokers) on possible revisions to its index policy,” the PSE said in a statement sent to InsiderPH.
“Only after such comments are received and evaluated will PSE consider if there is even a need to change its present index rules,” it added.
PSE assures ample notice
“If and when PSE decides to institute any changes to its index policy, the appropriate announcement will be made and ample time will be provided before implementation,” the statement said.
The exchange is accepting comments until June 20 before proceeding with the consultation.
Traders jump the gun
The proposed rules and simulation results, labeled as confidential, showed how the new guidelines would affect the PSE index composition using market data from February this year.
Based on those results, index names like Sy-led China Bank Corp. and tycoon Ramon S. Ang’s San Miguel Corp. would be removed, while Aboitiz Power Corp. and William Belo’s Wilcon Depot would take their place.
Details from the test run quickly spread among trading groups on Thursday, causing China Bank shares to plunge over 9 percent to P65.70 each (trading value: P348.2 million), while Aboitiz Power rose 3.94 percent to P39.60 (trading value: P316.2 million).
SMC shares slipped 0.63 percent to P79, while Wilcon rose 0.69 percent to P7.31, as the benchmark PSE Index stayed flat at 6,376.79.
Simulation taken out of context
While the simulation was not intended for trading action, some market participants reacted prematurely to the leaked data.
Some traders also pointed to a now-deleted tweet by a top stock broker, but as the original post indicated, shares prices had already started moving before the tweet was released.
A stock market expert said some details from the simulation were likely “taken out of context" by investors and traders, as the data reflected conditions from earlier in the year.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
