NZX50 - Additions and Removals

[noodles]

Possible Removal
COA - already confirmed delisting on 24 June
NPX - takeover candidate
STU - market cap dropped to $194m
SKL - market cap dropped to $246m
TWR - market cap dropped to $301m
KMD - market cap dropped to $300m

Possible Additional
SCL - market cap $451
PAY - market cap $527
TGH - market cap $583
VGL - market cap $469
THL - market cap $329
ARV - market cap $300
AFT - market cap $290

Of course it is not just market cap. The methodology is described here:
http://us.spindices.com/documents/methodologies/methodology-sp-nzx-index.pdf?force_download=true
Of note are any shareholder with more than 5% holding are excluded from the free float calculation. E.g. Tegal's free float is on 55% of market cap due to a 45% shareholder

Interesting is that CVT recently was added with a market cap of $400m. But nearly 30% would not be counted toward free float. So I estimate that at the time, CVT had a free float of $280M.

So of the above stocks, I think these would beat the $280m:
TGH -55% free float - $320m
SCL 82% free float - $370m
VGL: 69% free float - $329m
PAY: 55% free float $289m


STU: Free float 85% free float $165

But getting added is not that easy by quarterly reshuffle, the stock needs to beat the rank buffer. This means it needs to rank 44 or high to be added and 56 or lower to be dropped.

Thus it is much easier to get onto index if another stock is delisted.

If I were a betting man (I am), I would put my money on SCL replacing COA. Then if NPX was delisted, VGL would take their place. Whether STU is removed is not clear.

Caveat: It is tricky to work out the free float because some 5% shareholders may be in custodian account. I did not include these in my calculations.

[Beagle]

Good thread Noodles. I'm a betting man too and SCL is my top pick for entry into the NZX50 and my biggest current holding. I certainly enjoyed the 20% increase in CVT's SP that happened in double quick time after it was announced they were to be included in the NZX50 although its not crystal clear how much of this was attributable to their ongoing stellar performance and how much due to index tracking funds buying in.

What was clear though is that index inclusion can potentially have a meaningful positive effect on the SP so this is a great thread to ponder the possibilities.

I note the timetable regarding NPX might mean the takeover should be quite a drawn out matter and could drag out till as late as November 2016.

[trader_jackson]

SCL is also my 'bet' on what one would be included in NZX 50, ARV and AFT almost certainly not due to free float rules (especially AFT with around 88% locked up in escrow for another year! [I think])

[Snoopy]

Possible Removal
COA - already confirmed delisting on 24 June
NPX - takeover candidate
STU - market cap dropped to $194m
SKL - market cap dropped to $246m
TWR - market cap dropped to $301m
KMD - market cap dropped to $300m


What about PEB? Even with today's price rise to 64c, the market capitalisation is only:

0.64 x 376,543,478 = $240.6m

That would all be free float I would imagine, because there couldn't be any institutional investors out there foolish enough to invest?

SNOOPY

[Snoopy]

Possible Removal
COA - already confirmed delisting on 24 June
NPX - takeover candidate
STU - market cap dropped to $194m
PEB - market cap dropped to $241m
SKL - market cap dropped to $246m
TWR - market cap dropped to $301m
KMD - market cap dropped to $300m


With June approaching, time to update the 'small five' following Towers revised profit guidance today.

Possible Removal
COA - already confirmed delisting on 24 June
NPX - takeover candidate
STU - market cap dropped to $185m
PEB - market cap dropped to $237m
SKL - market cap dropped to $256m
TWR - market cap dropped to $263m
KMD - market cap dropped to $306m

Possible Additional
SCL - market cap $454 x 0.82 = $372m
VGL - market cap $480 x 0.69 = $331m
TGH - market cap $584 x 0.55 = $321m
PAY - market cap $495 x 0.55 = $272m

SNOOPY

[boysy]

Til might be one to watch MC $248 with results out Friday.

[Beagle]

I still reckon SCL is the favourite to be added. TWR could possibly tank even further in the next few days as the market digests their horror result and outlook.

[noodles]

Til might be one to watch MC $248 with results out Friday.
With 60% of the float locked up by 2 shareholders, I think TIL would need to more than double in price.

[JohnnyTheHorse]

You guys realise that it isn't based on a decision by someone? Read how it is determined and you can calculate exactly who will be added and removed.

[sb9]

My money is on SCL too for addition, as for TIL might be a long shot....what about THL though?

[Beagle]

You guys realise that it isn't based on a decision by someone? Read how it is determined and you can calculate exactly who will be added and removed.

Not that easy as its based on average free float market cap for the last six months and certain liquidity criteria as well. I tried to absorb it all and nearly lost the will to live...

[Lewylewylewy]

I used to work in a govt department, which is proof that you can exist without the will to live. In summary: come on Roger, you can sus it out 😃

[Beagle]

I think I have this sussed already, see posts above. SCL meet the liquidity requirements.

[Joshuatree]

On a side note NZX50 is still the best performing bourse over the last year out of re 28 Asia Pacific stock indexes with a 1 year return of 8.67%. Only other ones in the green beingAustralia All Ords (just), Indonesia JSX, Phillipines PSE and Thailand SET.

[Beagle]

Good to know JT.

Nice run up in SCL, is the word out on entry to NZX50 or is it the rise in the lead-up to the annual general meeting and the anticipation of a very positive FY16 update at same or some combination of the two ? you folks be the judge.

[Balance]

Good to know JT.

Nice run up in SCL, is the word out on entry to NZX50 or is it the rise in the lead-up to the annual general meeting and the anticipation of a very positive FY16 update at same or some combination of the two ? you folks be the judge.

Better than expected trade surplus announced today - 'Sales of fruit rose 16 per cent to $418 million in April from the same month a year earlier, led by a 53 per cent jump in sales of gold kiwifruit as volumes climbed 29 per cent, while apple exports rose 29 per cent in value terms and 13 per cent in volume. Annual fruit exports climbed 33 per cent to $2.42 billion, the fastest pace among the country's 12 export commodities that achieve sales of at least $1 billion'.

[Beagle]

Better than expected trade surplus announced today - 'Sales of fruit rose 16 per cent to $418 million in April from the same month a year earlier, led by a 53 per cent jump in sales of gold kiwifruit as volumes climbed 29 per cent, while apple exports rose 29 per cent in value terms and 13 per cent in volume. Annual fruit exports climbed 33 per cent to $2.42 billion, the fastest pace among the country's 12 export commodities that achieve sales of at least $1 billion'.

WOW many thanks for that Balance.

[Snoopy]

From the NBR today for those without access:

The companies which make up the benchmark Top 50 Index are under review and it appears likely that Steel & Tube Holdings [NZX: STU (https://nzx.com/markets/NZSX/securities/stu)] will be turfed out by the recently listed Tegel Group [NZX: TGH (https://www.nzx.com/markets/NZSX/securities/TGH)].
The results of the review are due to be announced after the market closes on Friday, June 10.
Forsyth Barr quantitative analyst Matthew Leach says the imminent exit of another couple of stocks, Coats [NZX: COA (https://nzx.com/markets/NZSX/securities/COA)] and Nuplex [NZX: NPX (https://nzx.com/markets/NZSX/securities/npx)], also makes it likely that Scales Corporation [NZX: SCL (https://nzx.com/markets/NZSX/securities/SCL)] and Tourism Holdings [NZX: THL (https://nzx.com/markets/NZSX/securities/THL)] will join the Top 50.

If Tegal has only 55% free float then the article can't be right, can it?

SNOOPY

[Fox]

If Tegal has only 55% free float then the article can't be right, can it?

SNOOPY

TGH free float cap of $330m, compared with SCL cap of $470m. Both have similair liquidity (excl. first few trading days of TGH), so I don't see how TGH would rank above SCL. Maybe it has something to do with brand/company recognition, but that is hardly an objective measure.

[Beagle]

TGH free float cap of $330m, compared with SCL cap of $470m. Both have similair liquidity (excl. first few trading days of TGH), so I don't see how TGH would rank above SCL. Maybe it has something to do with brand/company recognition, but that is hardly an objective measure.

Based on average market cap over the last 6 months. Likewise liquidly. I think TGH a certainty to replace NPX is due course when it gets delisted as by then, approx. Nov we would have had the requisite 6 month trading period.
(Disc: Pure speculation on my part...sorry but I don't have time to put the entry to NZX50 rules under an electron microscope). I continue to believe SCL the favourite for entry and still my #1 market position.

[stoploss]

Based on average market cap over the last 6 months. Likewise liquidly. I think TGH a certainty to replace NPX is due course when it gets delisted as by then, approx. Nov we would have had the requisite 6 month trading period.
(Disc: Pure speculation on my part...sorry but I don't have time to put the entry to NZX50 rules under an electron microscope). I continue to believe SCL the favourite for entry and still my #1 market position.

I thought one of the criteria was the new company had to be 10 % larger than the bottom company for a 3 month period to qualify ... might have changed , might have this wrong . Anyway time will tell .
Have a nice long weekend everyone :)

[LAC]

Where can I find the list of the companies that make up the nzx50 which arent links to pdf's? Can someone please post the link. Thanks.

[Fox]

Where can I find the list of the companies that make up the nzx50 which arent links to pdf's? Can someone please post the link. Thanks.

Don't usually like relying on Wiki info, but here is a nice summary: https://en.wikipedia.org/wiki/NZX_50_Index

[LAC]

Thanks. Would have thought the NZX website would just have a list aye...
Much appreciated.

[GTM 3442]

Thanks. Would have thought the NZX website would just have a list aye...
Much appreciated.

Ever since they flogged off their indexing to S&P, their index constituents aren't freely available. It adds a slight frisson of opacity to the process of investing in New Zealand.

[axe]

An IPO may be considered for inclusion in the S&P/NZX 50 Index once it has at least 20trading days’ of data available at the quarterly review.

https://my.spindices.com/indices/equity/sp-nzx-50-index

[Ace]

So guys, guess the boys at NBR was right. NZX 50 addition of tegel and removal of coats. I was rooting for Scales haha.
Heres the announcement.
https://www.nzx.com/files/attachments/237302.pdf

[noodles]

So guys, guess the boys at NBR was right. NZX 50 addition of tegel and removal of coats. I was rooting for Scales haha.
Heres the announcement.
https://www.nzx.com/files/attachments/237302.pdf

Scales should be next. Nuplex is to be delisted in late July (probably).

Then we can start to look to the September review.
Candidates for addition should be:
VGL(477), THL(317) ,ARV(322) PAY(487), AFT(305),
I think TIL could also be considered. With the business Bakery selling 20%, the free float will be a lot higher. Their market cap will likely be $270m.
Newly listed Investore will also be in a similar market cap range.

As for removals, STU will have a lower weighted average market cap and must surely get removed.
SKL and TWR both have a market cap of $242m and would likely be next on the chopping block.

If SCL,TIL, CVT, TGH, and THL all move to the NZX50, I may have to declassify myself as a small cap investor!

[DarkHorse]

DITTO noodles :) May have to change our names... Udon? and ?

[noodles]

Investore added to the index.
https://www.nzx.com/files/attachments/238659.pdf

Another contender is CBL with a Market Cap of $571m. Pretty poor liquidity however.

[Pixelator]

With the addition of IPL into the NZX50 on July 6th the NZX50 is temporarily NZX51, quarterly rebalance due in September, what are the likely adjustments?

NPX out(assuming takeover approved in time)
STU out (Mkt Cap only $220m)

SCL in (Mkt Cap $440m)

then NZX50 back to 50 constituents

[boysy]

TIL must be getting close to inclusion with a MC of $330m

[winner69]

TIL must be getting close to inclusion with a MC of $330m

Hope so - needs something to boost the share price, even if it is an artificial thing like being included in an index

[Beagle]

With the addition of IPL into the NZX50 on July 6th the NZX50 is temporarily NZX51, quarterly rebalance due in September, what are the likely adjustments?

NPX out(assuming takeover approved in time)
STU out (Mkt Cap only $220m)

SCL in (Mkt Cap $440m)

then NZX50 back to 50 constituents

That's the one.

[Pixelator]

NPX gone on Monday...maybe no rebalance required as NZX50 is 50 again.

STU to hang in there?

[Pixelator]

NZX15: CNU in, AIR out

NZX50: SCL & VGL in, SKL & STU out

[Jantar]

NZX15: CNU in, AIR out....

How do you figure that?
CNU $1,671,335,000
AIR $2,554,393,000

[blackcap]

How do you figure that?
CNU $1,671,335,000
AIR $2,554,393,000

Would AIR not have only half the shares count.... ie the govt portion is not free float? So that would make sense then...

[Pixelator]

Here is the announcement from last night. Less institutional buying/ more selling now Air out of NZX15?

Comvita got a lift when they entered NZX50 but not Tegel. Expecting to see some upward movement for Scales considering the recent pullback


https://www.nzx.com/regulators/NZXO/announcements/288411

[Jantar]

Would AIR not have only half the shares count.... ie the govt portion is not free float? So that would make sense then...
OK. I didn't grasp the concept that govt owned shares don't count. However as I see it there nothing preventing the govt from selling, or adding to their holding at any stage.

[Earthling]

Does anybody know the current composition of the NZX50? Can it be obtained and, if so, where?
The composition of the NZX10 can be found because the holdings of the SmartShares NZX10 fund, TNZ, can be found at http://smartshares.co.nz/types-of-funds/smartlarge/tnz because they give the top 10 holdings and there are only 10 holdings. Similarly the top 10 shares in the NZX50 can be found because the top 10 holdings of the SmartShares NZX50 fund, TNZ, can be found at http://smartshares.co.nz/types-of-funds/smartlarge/fnz. But what about the other 40?
Tim Bennett spoke at the recent NZ Shareholders Association conference. A friend told me that he asked Bennett about the availability of the indexes' composition and Bennett said that they could be obtained through the online sites of NZ sharebrokers. My friend couldn't find them on the ANZ website, and I had a quick look at the Craigs website and couldn't find them.

[Scrunch]

The link below is missing the most recent changes at the time of posting but is a start

https://en.wikipedia.org/wiki/NZX_50_Index

[Snow Leopard]

AIA
AIR
ANZ
ARG
ATM
CEN
CNU
CVT
EBO
FBU
FPH
FRE
FSF
GMT
GNE
HBL
IFT
IPL
KMD
KPG
MCY
MEL
MET
MFT
MPG
NZR
NZX
OHE
PCT
PFI
POT
RBD
RYM
SCL*
SKC
SKT
SPG
SPK
SUM
TGH
TME
TPW
TWR
VCT
VGL*
VHP
WBC
WHS
XRO
ZEL

Best Wishes
Paper Tiger

*SCL & VGL will replace SKL & STU from the 17-Sep

[blackcap]

Its just stupid how the NZX keeps this top 50 data "private" and that you have to pay to access it. I mean they run the TOP 50 ETF with their smartshares and the prospectus details which holdings they have. Also they have to announce to market which stocks are going in and which are going out at the quarterly reviews. So I do not understand the secrecy? Why play silly games.

[Balance]

Its just stupid how the NZX keeps this top 50 data "private" and that you have to pay to access it. I mean they run the TOP 50 ETF with their smartshares and the prospectus details which holdings they have. Also they have to announce to market which stocks are going in and which are going out at the quarterly reviews. So I do not understand the secrecy? Why play silly games.

Legacy of wunderkid Weldon - everything that can be charged and earn fees for his nest egg, will be.

Those of you who supported him when he raped and pillaged NZX - exactly as predicted, future generations pay.

[Snoopy]

Its just stupid how the NZX keeps this top 50 data "private" and that you have to pay to access it. I mean they run the TOP 50 ETF with their smartshares and the prospectus details which holdings they have. Also they have to announce to market which stocks are going in and which are going out at the quarterly reviews. So I do not understand the secrecy? Why play silly games.


Just had a look at the capitalisation of some of those NZX50 constituents.

Orion Health (OHE): $184.129m (based on a $1.15 share price).
Comvita (CVT): $222.913m (based on a $5,25 shareprice)
Pacific Edge (PEB): $227.736m (based on a 57c shareprice)
Tegal (TGH): $380.82m based on a $1.07 share price. But public float is around 55%
0.55 x $380.82 = $209.451m

Others must just about be due for a recall?

Warehouse (WHS): $728.321m (based on a $2.10 shareprice) {Although I guess the stakes of Sir Stephen 27%, the Tindall Foundation 21% and James Pascoe 16% come out of that.}
(1-0.56)x $728.321= $320.46m
Skellerup (SKL): $302.705m based on a $1.57 shareprice
Steel and Tube (STU): $225.564 (based on a $2.49 shareprice)
PGG Wrightson (PGW): $455.361m (based on a $0.59 share price). Take out the Agria 51% holding and you still get:
(1-0.51) x $455.361m = $223.12m

And what about the 'new guys'?

Oceania Healthcare Limited (OCA): $512.641m (based on a 84c shareprice.)

Could be quite an index shake out on the way?

SNOOPY