The Philippines’ presence in MSCI indices has fallen to its lowest level in at least a decade as more local stocks drop out of the benchmarks and market values weaken.
Abacus Securities said the country’s MSCI weight is now at a “decade, if not all-time, low,” leaving the Philippines with the smallest presence among the major ASEAN markets it tracked.
The latest setback is the removal of Ayala Land Inc. of the Zobel family from the MSCI Philippines Standard Index, which will leave the benchmark with just nine Philippine stocks, down from 11 earlier this year.
That puts the Philippines well behind its regional peers, with just nine MSCI Standard constituents compared with about 21 for Malaysia, 18 for Thailand and 16 for Singapore, according to Abacus.
By index weight, .Abacus’ historical chart puts the Philippines at roughly 0.3% of the MSCI Asia ex-Japan Index, compared with about 3.7% for Singapore, 1.7% for Malaysia, 1.1% for Indonesia and 0.8% for Thailand. The Philippine share was close to 3% about a decade ago.
Abacus said possible changes elsewhere in MSCI’s emerging-market universe could further erode the Philippines’ already declining share of global investor attention.
Abacus said Indonesia could eventually be moved to frontier-market status, while South Korea could graduate to developed-market status. But even then, fund managers would still have a much broader pool of stocks to choose from elsewhere in ASEAN and other emerging markets.
