S&P DJI NZX - September Review

[Balance]

Should be quite a few changes comes the review to be announced this month.

Any thoughts?

[jonu]

Should be quite a few changes comes the review to be announced this month.

Any thoughts?

Will they signal MET's replacement in advance?

[Balance]

Will they signal MET's replacement in advance?

Will automatically happen once takeover is completed and MET is delisted.

[jonu]

Will automatically happen once takeover is completed and MET is delisted.

Thanks, but will they indicate which cab is next off the rank?

[Balance]

Thanks, but will they indicate which cab is next off the rank?

They never do - that's why the institutions spend a fair bit of time trying to figure out which are the ones mostly to go into the index, and go out of the index.

Go back over the last 9 months and there have been some huge movements in market capitalization on NZX - but only one change in June 2020 which was Napier Port replacing Gentrack on NZX50.

So expect there would be a few changes this time round?

[Greekwatchdog]

There was talk about PEB including. I posted this on the PEB Thread..Just in case someone gets hopes up...

This is For Barr insights into it posted a week ago.
All eyes on Pacific Edge — Liquidity is potentially the thorn in its side. The recent dramatic rise in Pacific Edge's (PEB) share price, which saw it quadruple over a matter of weeks, sees it as a potential entrant (based purely on size) for the S&P/NZX 50 indices at future index reviews. However, liquidity requirements must be satisfied first for members and non members alike. Based on our calculations, we believe PEB has (just) failed the liquidity threshold at the September 2020 review, implying that (should PEB's price hold/increase) PEB will not be eligible to enter until June 2021 at the earliest. We note that non-members must pass the liquidity threshold for three consecutive quarterly index reviews and actual liquidity outcomes are not made public by S&P DJI. Figure 2. Current rankings for S&P/NZX 50 Index inclusion/exclusion Ranking Code Current status 6-mth average price 6-mth average market cap
This is For Barr insights into it posted a week ago.

All eyes on Pacific Edge — Liquidity is potentially the thorn in its sideThe recent dramatic rise in Pacific Edge's (PEB) share price, which saw it quadruple over a matter of weeks, sees it as a potentialentrant (based purely on size) for the S&P/NZX 50 indices at future index reviews. However, liquidity requirements must be satisfiedfirst for members and non members alike. Based on our calculations, we believe PEB has (just) failed the liquidity threshold at theSeptember 2020 review, implying that (should PEB's price hold/increase) PEB will not be eligible to enter until June 2021 at theearliest. We note that non-members must pass the liquidity threshold for three consecutive quarterly index reviews and actualliquidity outcomes are not made public by S&P DJI.Figure 2. Current rankings for S&P/NZX 50 Index inclusion/exclusionRanking Code Current status 6-mth average price 6-mth average market cap

[Balance]

First Friday of September is upon us - so expect announcement to be made today

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZXO/340527/307185.pdf

Changes in 2019 - announced 6 Sept

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZXO/323580/286387.pdf

Changes in 2018 - announced 7 Sept

[Balance]

The two biggest falls in the NZX50 ranking:

SKT

NZR

The three biggest risers into the NZX50

PEB

SKO

ERD

By market capitalization only

Liquidity measure will be key determining factor too

[JSwan]

The two biggest falls in the NZX50 ranking:

SKT

NZR

The three biggest risers into the NZX50

PEB

SKO

ERD

By market capitalization only

Liquidity measure will be key determining factor too

Is there also a minimum volume requirement for being in the NZX50? Think SKT and NZR are fine with volume & liquidity, just market cap is not as good

[Grey]

I know liquidity would be an issue, but judging just by market cap wouldnt AFT go in that list too?

[Balance]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZXO/359285/330139.pdf

SKO in, NZR out

[Greekwatchdog]

Update on For Barr on this....
S&P DJI have confirmed at the September 2020 quarterly index review that The New Zealand Refining Company (NZR) willexit the benchmark S&P/NZX 50 indices, allowing Serko (SKO) to enter. Changes are effective close of market, Friday, 18September 2020.Serko confirmed to enter the S&P/NZX 50 benchmark indicesAs expected, SKO will enter the S&P/ NZX 50 benchmark indices due to NZR dropping below the required level of six-monthaverage market capitalisation. SKO will enter with an index weight of approximately 0.23% (rank 48). We estimate passive demand forSKO will be in the order of +1.4m shares (11.2x ADV) and -3.6m shares for NZR (7.8x ADV).Figure 1. September 2020 review: Confirmed changesIndex Enter Exit Expected Weight (rank)S&P/NZX 10 No changeS&P/NZX 20 No changeS&P/NZX 50 SKO NZR 0.23% (48)S&P/NZX 50 Portfolio SKO NZR 0.34% (48)Source: Forsyth Barr analysis, S&P DJIQuarterly re-weightings confirmed — Looking aheadAs with each quarterly index review, S&P have updated indexed shares along with Investable Weighting Factors (IWFs) for indexconstituents. The companies with the largest re-weightings are presented in Figure 2. Updated indexed shares (i.e. via revisedAdjustable Weighting Factors) for the S&P/NZX 50 Portfolio index will be released to index subscribers, close of market, Friday, 11September 2020.Looking forward, with the acquisition of Metlifecare (MET) by Asia Pacific Village Group (APVG) currently proceeding, we have againupdated our index inclusion/exclusion index model. Using current six-month average free float market cap rankings and liquiditycalculations, our model suggests that the most likely replacement for MET would be (1) Tower (TWR) or (2) Hallenstein Glasson(HLG), given, at this point, TWR's current liquidity figures are borderline.We again note that based on our calculations, Pacific Edge (PEB) will not be eligible for current index inclusion having (just) failed theliquidity threshold at the September 2020 index review. Should our calculations be incorrect, then PEB would rank ahead of TWR andwould enter the S&P/NZX 50 benchmark indices should MET be removed.Figure 2. September 2020 review: Major reweighting changes expectedIndex Current Weight Expected Weight Total ChangeS&P/NZX 50 IndexSKO n/a 0.23% +0.23%SKC 1.49% 1.70% +0.20%NZR 0.10% n/a -0.10%RYM 4.64% 4.23% -0.41%S&P/NZX 50 Portfolio IndexSKO n/a 0.34% +0.34%NZR 0.14% n/a -0.14%S&P/NZX 10 IndexAIA 10.77% 10.94% +0.17%RYM 7.29% 6.70% -0.59%

[Balance]

Thank you, Greekwatchdog. 👍

[Greekwatchdog]

Just thinking Balance, it will only take 1 maybe 2 positive announcements for PEB to get in?? Be interesting 3 months their..

[Balance]

Just thinking Balance, it will only take 1 maybe 2 positive announcements for PEB to get in?? Be interesting 3 months their..

Liquidity is the key issue with PEB - market cap is fine as PEB is comfortably well ahead of HLG & TWR.

So need to keep the volume of trades going!

[Greekwatchdog]

What so we buy 100k a day to keep pumping thru...Have enough already...Or can you have enough??

[Balance]

What so we buy 100k a day to keep pumping thru...Have enough already...Or can you have enough??

Need a couple of good announcements to pump the volume up again.

[Greekwatchdog]

Can't be far away about to close books for 1st half of financial year...