Pharol, Ramada and Novabase on the PSI-20’s exit door

Pharol, Ramada and Novabase are preparing to leave the Portuguese stock market reference index in March, when new PSI-20 rules come into force.

Isabel Ucha, the CEO of Euronext Lisbon, admitted this Thursday that the main Portuguese stock market index will lose “two or three” listed companies in March, due to the new index methodology that will come into force that month.

The adjustments made in the PSI index now include the determination of a free-float market capitalisation of at least €100 million and the elimination of the requirement of a minimum number of constituents. It was also defined that it would no longer be called PSI-20, but only PSI.

According to Reuters, there are three listed companies that do not meet this requirement. The technology company Novabase has a free-float of only €37.8 million, with only 22% of its capital dispersed in the stock exchange, meaning there is a margin to reverse the delisting. Ramada is in the same situation: it has a free-float of €41 million, corresponding to 22% of its market capitalisation of €180 million.

In turn, Pharol, whose assets include a stake in the Brazilian operator Oi and Rioforte debt, has a free-float of €54.8 million, about 66% of the capital.

With a free-float of €113.5 million, Ibersol, which operates Burger King, Pizza Hut, KFC, among other restaurant chains, also risks leaving the PSI index if the company’s shares perform badly in the coming months and fall below the red line.

Isabel Ucha explained to journalists that the new rules aim to give greater dynamism to the PSI-20, which had been losing momentum because of smaller listed companies.

“If we wanted a stronger and more attractive index, we couldn’t have small companies,” she said.