If Mr Beagle would be so kind to attatch the info page I sent him a while back, that would be good? PS-I must learn how to do that.
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As a starter:
The MSCI world index, which is part of the modern index strategy, is a broad global equity index that represents large and mid-cap equity performance across 23 developed markets countries. It covers about 85% of the free float-adjusted market capitalisation in each country.
The MSCI world index does not offer exposure to emerging markets.
Thanks for your reply, I understand what the MSCI is but dont understand "A2 will have about 30% of the total pie once added which means the other constituents are going to have to be sold down to keep the pie at 100%, should be a few bargins available on May 31st." I could not believe the total pie is the entire MSCI.
Thanks mate, basically nzsharetrade,MCY had a 6.55% weighting in the NZ index, A2 will replace it with an approximate 30% weighting, to keep the pie at 100% some serious reshuffling needs to occur(The NZ pie is made up of 7 constituents or slices) Currently FPH has the biggest slice of the pie at 22.26%.
As I see it with the market cap of ATM it will go to the head of the list and the others will all come down a bit with Mercury falling out.
That's how I have observed these things playing out before. Its not just the change of ATM and Mercury, the others get reweighted as well which as discussed could throw up an interesting buying opportunity.
TOP 7 CONSTITUENTS
Float Adj Mkt Cap ( USD Billions)
Index Wt. (%)
Sector
FISHER & PAYKEL HEALTH 5.43 22.26 Health Care SPARK NEW ZEALAND 4.42 18.11 Telecom Srvcs AUCKLAND INTL AIRPORT 4.23 17.33 Industrials RYMAN HEALTHCARE 3.06 12.52 Health Care FLETCHER BUILDING 3.03 12.42 Materials MERIDIAN ENERGY 2.64 10.81 Utilities MERCURY NZ 1.60 6.55 Utilities Total 24.41 100.00
I tried posting an image of what Couta1 sent me and had a bit of trouble as noted by Investor. hopefully the above will give people the info they need.
I believe the float adjusted market cap removes major shareholdings that are locked up.
Anyway if we look at FPH by way of example its float adjusted market cap is $5.43b and constitutes 22.26% of the MSCI N.Z. index. I believe this and the other constituents will decline such that they are reweighted to take into account ATM's float adjusted market cap which is probably bigger than any other share here.
Thanks couta1 and Beagle. I got this.
Its so good that A2 market cap is so so huge ......an inordinate amount of buying necessary
Punting on index inclusions isn’t really “Investing” is it ...never mind as long as the share price goes to $14.60 and beyond and sets new all time highs
It is investing but its index investing. I think you are dead right that there is going to be an inordinate amount of buying in the lead up to this change and especially on 31 May itself in the last 15 minutes closing match process. Could be a LOT of selling going on too with the existing constituents, especially Mercury exiting the index.
Disc: I topped up with some more ATM this morning.