“The rules we adopted last year pertaining to the management of the index provide firmer support for stability and predictability in the index. The rally of the index shows that this composition, indeed, represents the positive investor sentiment in the market,”  Hans  Sicat, PSE president and chief executive officer, said in a statement on Wednesday.

The bourse said the results are based on a review of the trading activity of firms included in the index from January to December last year. The last revamp of the index was on September 12, 2011.

Changes in the index composition are closely watched by fund managers whose portfolios are sometimes benchmarked against the key measure.

To be included in the PSE index, a listed company must satisfy three criteria—the free float level, liquidity, and full market capitalization.

Free float, also known as public float, refers to the portion of the outstanding shares that are freely available and tradable in the market, or those shareholdings, which are nonstrategic in nature. The free-float portion should represent at least 12 percent of the outstanding shares of a listed stock.In order to pass the liquidity criterion for the main index, a stock must be among the top 25 percent by the median daily value turnover per month for at least nine out of 12 months.

Full market capitalization, on the other hand, refers to companies that pass the first two criteria and are ranked from highest to lowest based on volume-weighted average price during the review period.

In selecting companies that will comprise the sector indices, common stocks of the company must rank among the top 50 percent in terms of the median daily trade per month in eight out of the 12-month period in review.