Ayala Land downgrades to MSCI small cap index

MANILA, Philippines — Property giant Ayala Land Inc. is set to drop to the MSCI Philippines Small Cap Index after losing its spot in the Standard Index.

MSCI confirmed that ALI would be the sole deletion from the MSCI Philippines Standard Index following its August review. No Philippine company will replace it in the Standard Index.

READ: Ayala Land 6-month earnings down 19%

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At the same time, MSCI listed ALI as the only addition to the MSCI Philippines Small Cap Index, confirming the property developer’s migration to the smaller-capitalization basket.

Still, the changes will take effect after the close of trading on Aug. 31.

Moreover, the downgrade could weigh on ALI’s foreign investor visibility and trigger portfolio adjustments among funds that track MSCI indexes.

Global fund managers closely watch MSCI indexes, as changes in their composition can drive passive fund flows, prompting portfolios to rebalance and align with their respective benchmarks.

In addition, the reclassification follows a period of weakness for ALI shares amid a challenging property market.

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ALI earlier reported that net income attributable to equity holders of the parent fell 19 percent to P11.5 billion in the first half from P14.2 billion a year earlier.

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In its August review, MSCI announced that it would add 55 securities and remove 92 from the MSCI All-Country World Index (ACWI) across its global standard indexes. Meanwhile, 203 securities will enter and 261 will leave the MSCI ACWI Small Cap Index. /pai