Shares of home improvement retailer Wilcon Depot Inc. surged by 8.45 percent on Thursday as its surprise inclusion in the main-share Philippine Stock Exchange index (PSEi) stirred the stock market.
Effective Oct. 11, the Philippine Stock Exchange (PSEi) announced that Wilcon would replace Lopez-led First Gen Corp., following a tender offer transaction that reduced the latter’s public float.
But it was a “very big surprise” that First Gen would be immediately taken out of the main stock barometer too soon after the last PSEi rebalancing, said veteran stock broker Joseph Roxas, president of stock brokerage Eagle Equities.Investors dumped shares of First Gen ahead of its removal from the PSEi. It lost P2.40 or 8 percent to close on Thursday at P27.60 per share.
On the other hand, Wilcon was the day’s most actively traded company, advancing by P2.65 to close at P34 per share, ending with a market capitalization of P128.53 billion.
At its closing price on Thursday, First Gen was valued by the stock market at P107.9 billion.
“I don’t think this has happened before—in the middle of an index review,” Roxas said, noting this was creating a precedent that PSEi companies that would fall short of index requirements for a particular month could be immediately removed from the PSEi.
An entity under the KKR group recently accepted the tender offer for 7.3 percent of First Gen’s outstanding common shares. As First Gen’s public float was at 18.74 percent prior to the tender offer, this KKR transaction would reduce the public ownership to 11.44 percent.
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