How the index moves stock prices

In June 2025, a document leaked from the Philippine Stock Exchange (PSE)—a draft simulation showing how new guidelines would affect the composition of the Philippine Stock Exchange index (PSEi).

- KEITH LIM

The leaked simulation suggested that San Miguel Corp. (SMC) and China Banking Corp. (Chinabank) could be removed from the PSEi, while Aboitiz Power Corp. (Aboitiz-Power) and Wilcon Depot Inc. could be added. Word quickly spread among trading groups, causing massive price swings among the companies mentioned. Chinabank’s shares dropped more than nine percent in a single day, while AboitizPower gained nearly four percent. Wilcon also ticked a bit higher, while SMC slipped slightly.

The PSE clarified that the results were not final and that the new guidelines were still being drafted. The simulation was meant only for consultation, and no final decisions had been made. Stakeholders, including fund managers and brokers, were invited to provide feedback on the drafted rules.

“Only AFTER such comments are received and evaluated will PSE consider if there is even a need to change its present index rules. 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 bourse said.