1 month ago
9
MSCI Inc., a leading provider of critical decision support tools and services for the global investment community, is moving JG Summit Holdings Inc. and subsidiary Universal Robina Corporation from its large cap to the small cap index.
Based on the results of the MSCI’s February 2025 Index review, JGS and URC will be deleted from the MSCI Philippines Index or the standard (large cap) index and will add them to the MSCI Philippines Small Cap Index.
Monde Nissin Corporation will also be added to the small cap index. All changes for this review period will be effective at the close of February 28, 2025.
“We don’t have the data but what we know is that the standard index is much more widely followed than the small caps. This means the outflows from getting deleted from the former will be far greater than the inflows from being added to the latter,” said a stock analyst.
He noted that, “Therefore, expect both JGS and URC to drop significantly until the effectivity date at the end of the month. On a positive note, the next two weeks may provide the opportunity long-term investors have been waiting for to buy both stocks.
“As for MONDE, its addition to the small caps index may provide some support but investors will be looking forward more to its fourth quarter results for signs that things are getting better.”
“Accordingly, we expect JGS and URC to face temporary selling pressure as MSCI index-tracking funds adjust their portfolios to align with the updated index composition,” said COL Financial Research Analyst Denise Joaquin.
She added that, “In contrast, MONDE could see buying pressure upon its addition to the small cap index.” COL has a BUY rating on all three stocks due to their low market valuations.
Other highlights of MSCI’s February index review of the MSCI Global Standard Indexes include the addition of 23 securities to the MSCI ACWI Index while 107 securities will be deleted.
The three largest additions to the MSCI World Index measured by full company market capitalization will be United Airlines Holdings (USA), Reddit A (USA), and Natera (USA).
The three largest additions to the MSCI Emerging Markets Index measured by full company market capitalization will be Hyundai Motor India (India), Emaar Development (United Arab Emirates), and J&T Global Express B (China).
For the MSCI Global Small Cap Indexes, there will be 193 additions to and 297 deletions from the MSCI ACWI Small Cap Index.
For the MSCI Global Investable Market Indexes, there will be 124 additions to and 312 deletions from the MSCI ACWI Investable Market Index (IMI).
MSCI Global All Cap Indexes will see 111 additions to and 90 deletions from the MSCI World All Cap Index while the MSCI Frontier Markets Indexes will have 13 additions to and four deletions from the MSCI Frontier Markets Index.
The three largest additions to the MSCI Frontier Markets Index measured by full company market capitalization will be Koncar Eletroindustrija (Croatia), CFG Bank (Morocco), and Standard Chartered Bank (Kenya).
There will be 22 additions to and 12 deletions from the MSCI Frontier Markets Small Cap Index.
