Portugal: New rules may reduce number of companies in PSI20

The CEO of Euronext Lisbon, Isabel Ucha, expects that the main Portuguese stock market index, the PSI, will lose “two or three” listed companies in March when new rules come into force.  

In a press conference held on Thursday to present last year’s activities, Ucha acknowledged that the PSI20 index “will have fewer companies” from March on the occasion of the annual review.

The adjustments in the methodology of 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.

With the elimination of the minimum number of 18 companies in the index and “looking at the market capitalisation of companies listed in Portugal”, Isabel Ucha acknowledges that there may be “two or three companies” that “may not comply with the minimum of €100 million” in March.

The changes to the Lisbon stock exchange reference index were announced last August, and it was also defined that it would no longer be called PSI20 and would only become PSI.

“Given that we may have a number below 20, we understand that it would correspond better to the index with these characteristics to call it PSI,” said Isabel Ucha.

These changes come after “a broad public consultation process”, including Portuguese and international users of the index and intend to “improve its attractiveness and quality”, Euronext explained in August.

In 2021, the market capitalisation of the PSI20 increased 12% to €82 billion, by “a combination of IPOs, capital increases and a generalised rise in share prices”, reaching pre-crisis 2008 levels.

The Lisbon stock exchange owner’s balance sheet also highlights that the secondary market remained “very active”, maintaining “the high levels of trading of 2020” and about 30% above 2019 levels.

The PSI20 index currently includes 19 listed companies.

Euronext manages several European stock markets, such as Paris, Amsterdam, Brussels, Dublin, Lisbon, Oslo and Milan.