StockTalk

Disclaimer - I am not holding myself out to be any sort of expert on how S&P make their decisions on constituent changes to this index nor suggesting there are certain gains to be made when changes do occur through index tracking funds being compelled to buy or sell large volumes of shares.
This post contains speculative thinking on possible future index inclusions which may or may not happen and if they do, this may or may not have a material impact on the share price of the companies mentioned.

That out of the way some index research kindly shared with me by one of the brokers dated late February leads me to the following initial conclusions:-

Apart from the regular quarterly index review, my understanding is that changes to the composition of the index occur when there's "reasonable assurance a takeover will proceed", or words very close to that effect.  With the revised PPH scheme implementation agreement at $1.42 garnering widespread support, and looking pretty much assured, it's probable from an index perspective that very shortly after the date of the new vote for the revised scheme, which I understand has an indicative timeline of late May, S&P will announce PPH is leaving the NZX50.  So which company will replace it?

Based on the six month average market capitalization as at 21 February (free float, so excludes strategic holdings like for example Tim Glasson's 20% stake in HLG), NPH (average price for last 6 months $2.88), and HLG ($5.37 average 6 month price). were neck and neck at $258m and $256m respectively, although if you used the current spot prices, the order would be reversed.

I've had a look at pricing of the two stocks since then and the results are inconclusive.  This is too close to call and from what I can see it depends largely on the relative share price of these two between now and late May. 

NPH recently removed profit guidance because of recent extreme weather events and their effect on Port volume. This may or may not affect their share price materially going forward and no doubt a lot of this has been factored into the share price already since that announcement.

So if it's a 50/50 call on HLG / NPH inclusion in the NZX50 with the imminent prospect of PPH being removed when might the one that misses out with PPH exit otherwise get included?

As part of the regular quarterly review changes. It is hard to say when this might happen as the research note I viewed was coy on the free float market cap of SKO position 50, SAN position 49, SML position 48 and WHS position 47, and my understanding is the regular quarterly index adjustment process has a system to stop changes happening too much and barring another takeover of a NZX50 company an incumbent member must drop to position 56 before it is booted out, in other words the share prices must "tank" quite a lot and stay down for a period of quite some months.

I do note however that the 6 month average price of SKO of $2.85 (position 50) is at a considerable difference to the current spot price of $2.40, SML position 48 appears to be in the process of a major downward move from its 6 month price average of $3.37, current price $2.40, (down 29%) and WHS position 47 at $2.99 average 6 month price, most recent price $2.01, (down 33%) so the chances of one or two of these getting booted out of the index in the next couple of quarterly index reviews, June and September, look pretty good to me.
WHS and SML look the most at risk of exiting the NZX50 in due course due to the massive reduction in their share prices. 

Conclusion from my perspective based on my holdings.
HLG - In my view there is a good chance, (not certain), that HLG will get included in the NZX50 in the near term either as a result of the PPH scheme of arrangement being implemented or as a result at some stage over the next 6-9 months with quarterly index reviews.  Apart from that I think the HLG investment case to hold is very sound indeed.

TRA. In the medium term I note TRA is coming into consideration, currently position 53 but will improve to 52 when PPH exits the NZX50.  I think Todd Hunter and his team are executing very well notwithstanding the recession and have a clear pathway for growth ahead. 

Disc I have added a few more TRA and HLG in the last week.

Just giving this topic a bump due to a material change in the expected timeline. Previously PPH had indicated a second vote would occur indicatively in late May. Yesterday PPH announced the vote on the new scheme will happen at a meeting on 27 April.
https://www.nzx.com/announcements/409400  I think it is likely the scheme will get the support it needs to get implemented and that at some stage fairly shortly after that S&P will announce PPH is exiting the NZX50 to be replaced by another company.
Which one remains in doubt.  Price and volume action between the above post on 27 March and now is very encouraging for HLG but its only been a week and it must be remembered that S&P use 6 month price averages and there are also liquidity requirements. 
Price weakness in SML, WHS and NPH has also been notable but again, this is only one weeks subsequent data so not too much can be read into that.

Much will depend on price and volume data for the rest of this month.

Quote from: Basil on Apr 04, 2023, 08:48 AMJust giving this topic a bump due to a material change in the expected timeline. Previously PPH had indicated a second vote would occur indicatively in late May. Yesterday PPH announced the vote on the new scheme will happen at a meeting on 27 April.
https://www.nzx.com/announcements/409400  I think it is likely the scheme will get the support it needs to get implemented and that at some stage fairly shortly after that S&P will announce PPH is exiting the NZX50 to be replaced by another company.
Which one remains in doubt.  Price and volume action between the above post on 27 March and now is very encouraging for HLG but its only been a week and it must be remembered that S&P use 6 month price averages and there are also liquidity requirements. 
Price weakness in SML, WHS and NPH has also been notable but again, this is only one weeks subsequent data so not too much can be read into that.

Much will depend on price and volume data for the rest of this month.

Both HLG and TRA are riding the very slow incoming tide for NZX50 inclusion ... with HLG ahead of TRA.
Can't see SML staying in especially in light of Fonterra reducing their payout forecast to farmers yesterday as an indication of further global milk price weakness.
Hoping TRA have turned the corner with not overly strong tailwinds, more of a breeze behind them at this stage ... noting current sp around $3.40, and MA50 for TRA closing in on the MA200 where support at sp $3.55 would take it above the MA200, something the bot traders love.

Quote from: Whome on Apr 04, 2023, 09:44 AMBoth HLG and TRA are riding the very slow incoming tide for NZX50 inclusion ... with HLG ahead of TRA.
Can't see SML staying in especially in light of Fonterra reducing their payout forecast to farmers yesterday as an indication of further global milk price weakness.
Hoping TRA have turned the corner with not overly strong tailwinds, more of a breeze behind them at this stage ... noting current sp around $3.40, and MA50 for TRA closing in on the MA200 where support at sp $3.55 would take it above the MA200, something the bot traders love.

Agree that SML's tenure in the NZX50 looks uncertain, but not quite sure about your reasoning.

Why would a lower milk price impact in any shape or form on SML's business? SML is just processing the milk and clipping the ticket. How much the milk costs if for their business absolutely irrelevant (as long as the farmers get enough money to survive).

Synlait have been very busy shooting themselves in the foot, some would say both feet and may struggle to run well or even walk well again any year soon.
Notable that the sixth month price average was $3.37 as recently as 21 February and now struggling to hold much above $2.  Investor day on 8 May will be interesting.  Downgrades 'never" come in 3's eh  ;)

Quote from: BlackPeter on Apr 04, 2023, 09:51 AMAgree that SML's tenure in the NZX50 looks uncertain, but not quite sure about your reasoning.

Why would a lower milk price impact in any shape or form on SML's business? SML is just processing the milk and clipping the ticket. How much the milk costs if for their business absolutely irrelevant (as long as the farmers get enough money to survive).

Not quite that simple. SML can hold the price they pay to their farmer suppliers and wear the additional costs when they sell the milk products, or they stay in step with Fonterra and also reduce their payout to their farmers, and risk losing some suppliers ... a delicate balance for a company that has become weaker in the last few years.

https://www.rnz.co.nz/news/business/487257/pushpay-s-dissenting-investment-funds-accept-new-offer

Quote from: Whome on Apr 04, 2023, 10:13 AMNot quite that simple. SML can hold the price they pay to their farmer suppliers and wear the additional costs when they sell the milk products, or they stay in step with Fonterra and also reduce their payout to their farmers, and risk losing some suppliers ... a delicate balance for a company that has become weaker in the last few years.

They lost because they did set on the wrong customer and put on top of that all their eggs into this one basket. Nothing wrong with their supplier relationships I can see.

Anybody who wants back to Fonterra anyway needs first to find lots of cash to buy back into Fonterra. Remember - Fonterra is a Co-Op and serves only their paid up members.

Synlait on the other hand is no Co-Op. The change from Fonterra to Synlait did free up plenty of capital for the farmers. The way back however ...  :(

No worries.

With the PPH scheme of arrangement vote tomorrow looking highly likely to be approved and another month of price data between the apparent two front runners to replace it in the NZX50 index, (NPH and HLG), I am feeling quietly confident that HLG now has its nose in front in this race.

Based on free float market cap on the average share price over the last 6 months to 22 February 2023, (Broker analysis), there was just on 1% difference with NPH in front. Since then NPH appears to have traded at an average price in the low $2.60's, (against an average 6 month price of $2.88 as at 22 February), whereas HLG despite paying a 24 cent divvy this month appears to have traded at an average price in the low $5.40's over the last 2 months, compared to its $5.37 6 month average as at 22 February.

This remains a close race and one cannot overlook that S&P also have liquidity requirements for NZX50 inclusion, so which company replaces PPH in the NZX50 if the scheme of arrangement regarding same is approved tomorrow, remains to be seen.    If the PPH vote is approved I am hopeful we will see an index constituent change announcement by S&P shortly thereafter, probably sometime in early May.

In other potential index changes on the horizon with quarterly index reviews in June and September, gosh WHS and SML are making huge strides downwards and appear to be both vulnerable to be booted out.  That brings whichever company is not included above with the probable PPH removal into front position with TRA the likely next cab off the rank if both WHS and SML are booted out in due course.  I reckon TRA are a real chance for inclusion later this year or in early 2024.
 

PPH takeover approved by shareholders.  Last day of trading for PPH shares is 10 May.  https://www.nzx.com/announcements/410536

Game on as to which company replaces them in the NZX50 index.  We should know the answer well before 10 May.

Quote from: Basil on Apr 27, 2023, 07:48 PMPPH takeover approved by shareholders.  Last day of trading for PPH shares is 10 May.  https://www.nzx.com/announcements/410536

Game on as to which company replaces them in the NZX50 index.  We should know the answer well before 10 May.

HLG to hit $8 if it is included in the NZX50.

Expecting S&P to issue an NZX50 index constituent change announcement later this week, Monday 8th May at the latest.

Very good news for HLG shareholders just announced.
https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20230503-1463800/1463800_20230503-nzx-pph.pdf

Quote from: Basil on May 03, 2023, 05:59 PMVery good news for HLG shareholders just announced.
https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20230503-1463800/1463800_20230503-nzx-pph.pdf

You called it ...you a genius

Quote from: winner (n) on May 03, 2023, 06:12 PMYou called it ...you a genius

Not at all mate.  Every dog has his day  ;)   I am most grateful to Shareguy for most generously sharing broker index research upon which my analysis and this thread was based.  I didn't do much, I merely extrapolated share price and volume data from that and took off 2+ months of price and volume data from the back end of the six-month price averaging process.    Any half reasonably skilled old bean counter could have done that.

I'm also most grateful for your superb work with your charts and images showing among other things the beautiful steady growth in Glassons market share in Aussie over the years and the strong correlation between the HLG share price and the PE of 12.5.   Those were very powerful images, (an image says a thousand words), and brilliant original work mate and very much appreciated.  Thank you!

Kudos to both Basil and Winner for first identifying the developing opportunity back in Nov'22 then following through with detailed logical analysis, some simple maths and clear easy to read graphs that even I could understand.

Yes, well done.

Craig's say

NZX Index Watch – the May Index rebalance for the MSCI will be announced next Friday (12 May) and is effective 31 May. At this stage we see no change to Index constituents following the recent inclusion of EBO which brings the number of constituents to 6 (FPH, MEL, AIA, SPK, MCY, EBO). The two stocks vying for inclusion are MFT and IFT. MFT remains ineligible for inclusion due to liquidity constraints. IFT passes liquidity tests but currently fails on the market capitalisation test....assuming its market cap continues to increase IFT appears next in line for inclusion.

Quote from: Shareguy on May 04, 2023, 11:24 AMCraig's say

NZX Index Watch – the May Index rebalance for the MSCI will be announced next Friday (12 May) and is effective 31 May. At this stage we see no change to Index constituents following the recent inclusion of EBO which brings the number of constituents to 6 (FPH, MEL, AIA, SPK, MCY, EBO). The two stocks vying for inclusion are MFT and IFT. MFT remains ineligible for inclusion due to liquidity constraints. IFT passes liquidity tests but currently fails on the market capitalisation test....assuming its market cap continues to increase IFT appears next in line for inclusion.

Craigs picking IFT as next candidate for NZX50 inclusion... Surprised they don't mention TRA as a possible ... in the process to replace SML or WHS.

Different index mate.  MSCI is a global index for the serious heavyweight stocks.

Turners will get their turn.  Looking forward to them reporting on 23 May.

I see now. Thanks for that.

NZX INDEX Watch – MSCI has announced their changes this morning (effective 31 May) as follows:
MSCI Small Cap – Additions (none), Deletions (CNU, PCT, SKC)
MSCI Micro Cap – Additions (none), Deletions (THL)

Think the MSCI index rebalance this afternoon affected quite a lot of shares.  Huge volumes in some shares.
Be interesting to see if "normal service" resumes tomorrow.

P.S. Yes it seems a lot of shares were affected https://www.goodreturns.co.nz/article/976521795/nearly-1b-changes-hands-on-nzx-as-indices-rebalance.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+31+May+2023

After the huge kerfuffle and vigorous debate about HLG index inclusion last month it's probably a good thing it's all quiet on the Western front with the June quarter index rebalance.
https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20230602-1464259/1464259_20230602-quarta-nzx-map.pdf

I dare not speculate about the September quarter rebalance....at this stage.  Lot of water to pass under the market bridge before that becomes much clearer.

This from For Bar this morning..

S&P DJI have announced no constituent changes will be made to the S&P/NZX benchmark indices at the June 2023 quarterly index review. There are a number of minor changes to index shares with changes effective close of market, Friday, 16 June 2023.

Looking towards the next review
Based on our calculations, liquidity could be a factor for the next S&P/NZX index quarterly review (September 2023). Our Forsyth Barr inclusion/exclusion model suggests that, for the members of the S&P/NZX 50 index, Sanford (SAN) is on liquidity watch, having failed one of the liquidity measures at the June 2023 review. Should SAN again prove to be illiquid (i.e. consecutive liquidity misses), index methodology states that it will be removed. Based on rolling forward six-month market cap levels, Gentrack (GTK) would be our pick as the likely replacement. However, again liquidity (based on our previous quarterly review calculations) could be a barrier to entry. Should that be the case, Napier Port Holdings (NPH) would currently be our next pick.

With regards to the S&P/NZX 20 Index, we remain with the view that Port of Tauranga (POT) is failing the liquidity requirements for the index inclusion and is at risk of been dropped. Genesis (GNE) is our pick as a likely replacement.   

Figure 1. June 2023 Index Review
Index   Enter   Exit   Expected Weight (rank)
S&P/NZX 10   No changes   
n/a
S&P/NZX 20   No changes   
n/a
S&P/NZX 50   No changes   
n/a
S&P/NZX 50 Portfolio   No changes   
n/a
Source: Forsyth Barr analysis, S&P DJI

Re-weighting changes
As with each quarterly review, index shares, Investible Weighting Factors (IWFs) and Adjustable Weighting Factors (AWFs) are also updated. Based on current proforma files received, the companies with the largest re-weightings are presented in Figure 2. Confirmation of indexed shares for the S&P/NZX 50 Portfolio and S&P/NZX 20 indices will be released close of market, Friday, 9 June.

Figure 2. June 2023 Review: Major re-weighting changes expected
Index   Current Weight   Expected Weight   Total Change
S&P/NZX 50 Index   


Minor changes only




S&P/NZX 50 Port Index   


To be confirmed market close, Friday, 9 June



S&P/NZX 20 Index   


To be confirmed market close, Friday, 9 June



S&P/NZX 10 Index   


Minor changes only




NZX All Real Estate Index   


Minor changes only

Freight forwarder Mondiale VGL likely to list on both NZX and ASX later this year

Could go straight into NZX50

Who will they kick off if that happened

I see the following as extremely vulnerable to expulsion.
PEB
SML
WHS
In addition, SAN is on liquidity watch according to Forbar

Apart from new possible listings GTK is red hot favorite for inclusion and NPH / TRA are in a race for second favorite, (price and volume discovery of those two over July and August will sort the ranking out).

Real chance of more than 1 change at the next index review to be announced after close of market trade on Friday 1 Sept.

NZX Index Watch – the May Index rebalance for the MSCI will be announced next Friday (12 May) and is effective 31 May. At this stage we see no change to Index constituents following the recent inclusion of EBO which brings the number of constituents to 6 (FPH, MEL, AIA, SPK, MCY, EBO). The two stocks vying for inclusion are MFT and IFT. MFT remains ineligible for inclusion due to liquidity constraints. IFT passes liquidity tests but currently fails on the market capitalization test....assuming its market cap continues to increase IFT appears next in line for inclusion. -- SG

I assume after the Cap raise the calculus of IFT inclusion has altered in their favor.

IFT $8,402,044,747 cap
MFT $7,189,876,327 cap

Expect the unexpected.

Craigs am update

NZX50 INDEX WATCH – There are 18 trading days for liquidity and market cap calculations impacting the September rebalance. We see SML as almost certain to fall out and GTK as almost certain to re-enter the index. At the margin we note there is also a small chance WHS goes out of the index with TRA, followed by NPH, the next likely for inclusion. If WHS doesn't exit in September, it is more likely to exit in December given the cumulative effect of its market cap decline.

•   INDEX – S&P/NZX50 Rebalance - Following a discussion with S&P, our interpretation of the methodology has changed, resulting in a change to our expectations for the upcoming September rebalance (see latest index rankings below). Looking historically, GTK failed the liquidity test at the March rebalance and therefore will not be eligible for entry to the NZ50 until the December rebalance. With only 7 trading days left, we currently expect no changes in the September rebalance. There are 5 stocks with a larger market cap than SML that are failing liquidity. Consequently this means that SML is ranked 55th within the eligible universe of companies, and therefore is within the safe zone, avoiding removal. Looking ahead to the December rebalance, there are 70 trading days to forecast so it is far too early to make any claims, but extrapolating out todays prices would result in PEB and SML being removed, and GTK going in. TRA just beats BGP to also go in, however there is only 0.25% between them.

Geneva, August 10, 2023 Rebalances which will take place as of the close of August 31, 2023.

MSCI GLOBAL SMALL CAP INDEXES - GENESIS ENERGY - Deletion
MSCI GLOBAL MICRO CAP INDEXES - TOURISM HOLDINGS - NEW ZEALAND RURAL LAND - Additions

Quote from: Cod on Aug 11, 2023, 09:47 AMGeneva, August 10, 2023 Rebalances which will take place as of the close of August 31, 2023.

...
MSCI GLOBAL MICRO CAP INDEXES - TOURISM HOLDINGS - NEW ZEALAND RURAL LAND - Additions

No action for NZL and THL at close. I suppose no funds track the MSCI Micro Cap indexes.

S&P confirms no change to NZX50 in Sept quarter rebalance.
Speculatively, as there's a fair bit of water to go under the bridge between before the December rebalance but I think it's looking likely SML and PEB will exit, GTK to go in and TRA.  WHS also a possibility to exit.  Time will tell.
My opinion is its only worth buying more of a share on possible index changes if you really like the company already. 

Still chatter about impending Mondiale VGL IPO .......dual listing ASX and NZX with automatic inclusion into NZX50

If that happened would upset a few guess as to who comes and goes

Quote from: Basil on Sep 02, 2023, 09:54 AMS&P confirms no change to NZX50 in Sept quarter rebalance.

Found the announcement here (https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20230901-1465872/1465872_20230901-quarta-nzx-map.pdf).

There are some changes to MidCap/All/SmallCap due to addition of dual-listed shares previously ineligible. Of note, ANZ, WBC and VSL are being added to MidCap. SmartShares NZ Mid Cap ETF (https://smartshares.co.nz/types-of-funds/new-zealand-shares/mdz) has $150M tracking that index, so there may be some early Xmas shopping happening on Friday 15th.

Quote from: Basil on Sep 02, 2023, 09:54 AMSpeculatively, as there's a fair bit of water to go under the bridge between before the December rebalance but I think it's looking likely SML and PEB will exit, GTK to go in and TRA.  WHS also a possibility to exit.  Time will tell.
My opinion is its only worth buying more of a share on possible index changes if you really like the company already. 

I'm with you on that, watching this thread put TRA on my radar (now holding), but I'd happily buy it anyway for the div yield and low P/E, let alone the earnings growth. I can't bring myself to touch GTK even if it's a shoo-in to the NZX50 - no profit, no tradable volatility, trading at 3x revenue, just isn't my beverage. NPH too dull to mention.

S&P DJI has confirmed no constituent changes will be made to the S&P/NZX benchmark indices at the September 2023 quarterly index review. There are a number of minor changes to index shares with changes effective close of market, Friday, 15 September 2023.

Looking towards the next review
Our Forsyth Barr inclusion/exclusion model suggests there could be a number of potential changes at the next quarterly review, that being Dec 2023. Rolling forward current pricing and assuming current liquidity calculations hold, our model suggests that both Pacific Edge (PEB) and Synlait Milk (SML) will drop below the exclusion ranking for the S&P/NZX 50 Index and will, therefore, be removed. The model indicates that Gentrack (GTK) and Turners Automotive (TRA) would be the most likely replacements. However, we note that historically, liquidity �������in GTK has been an issue and going forward �������will need to stay elevated for it to remain a likely contender for entry. Should this not be the case, our next pick would be Napier Port Holdings (NPH

Thanks Shareguy,

I really like TRA anyway, regardless of future possible index inclusion, although I agree this looks highly likely for December inclusion.  Any company that can grow eps in this dreadful economy commands respect and especially with their compelling business plan and execution strategy not to forget the highly attractive metrics, so I have backed up the truck on them and am preparing the trailer unit for duty as well. ;D

Have I mentioned before how much I like their brilliant award-winning marketing with Tina 👍

Geneva, November 14, 2023 Rebalances which will take place as of the close of November 30, 2023.

MSCI GLOBAL MICRO CAP INDEXES

MSCI NEW ZEALAND INDEX
Deletions ARVIDA GROUP

MSCI GLOBAL SMALL CAP INDEXES
Deletions SUMMERSET GROUP HOLDINGS, THE A2 MILK COMPANY

Expectations confirmed (https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20231130-1467789/1467789_20231201-quarta-nzx-map.pdf)!

S&P/NZX 50 & S&P/NZX 50 Portfolio Index – Effective Prior to the Open on December 18, 2023

Action - Code - Company
Addition - GTK - Gentrack Group Limited
Addition - TRA - Turners Automotive Group Limited
Removal - PEB - Pacific Edge Limited
Removal - SML - Synlait Milk Limited

So much for releasing 'after hours' - all of these are dual-listed and still trading on the ASX. No price action though.

Interesting that TRA and GTK also being added to the mid cap index.

2023 sure has been a fun year for index changes with some very good gains.
The outlook for 2024 looks very quiet to me, especially in the first half.  Doesn't look like a great year to be hitting it out of the park with index changes.

WHS is the only candidate for possible exclusion that I can see, but the share price would have to move a long way south of where it currently sits at $1.60, (this, a fresh multi year low), and stay there for 6 months, (the 6 month averaging process), for an exclusion event to be triggered.

NPH is the most likely candidate to replace it but the prospects of this happening sometime late in 2024 don't look especially high to me unless WHS shares continue to tank downwards towards a $1.  You never know eh, Nick is certainly making a huge impression with his management skills that's for sure.

Geneva, MSCI Small Cap and Micro Cap rebalances which will take place as of the close of February 29, 2024.
Small cap.png
Micro Cap.png

So - they are moving both Oceania as well as Warehouse from small cap to micro cap fund.

Looks like a non-event if the fund takes the shares out of the right pocket and puts them into the left pocket insead. I suppose all the people waiting for huge price moves had their fun already - nothing to see here.

More interesting might be the companies which move new into the microcap fund (i.e. not trickling down from the small cap) like e.g Arvida, Heartlands, Manawa, Skellerup and many more ...

I think it all depends what the depth is of index tracking funds that follow the small cap index v the micro cap index 

Quote from: BlackPeter on Feb 25, 2024, 04:33 PMSo - they are moving both Oceania as well as Warehouse from small cap to micro cap fund.

Looks like a non-event if the fund takes the shares out of the right pocket and puts them into the left pocket insead.

Not so - there's a lot of money linked to the Small Cap index through index funds, and little if any on the Micro Cap index.

This was evidenced by absence of buy volumes on NZL and THL when they were promoted to the Micro Cap index in August 2023.

I haven't found any index fund that tracks the Micro Cap index.

There's been heavy selling of OCA and WHS already since the change was announced on 12th Feb, and we can expect that to culminate in huge volumes on the 29th.

Quote from: Basil on Feb 25, 2024, 06:29 PMI think it all depends what the depth is of index tracking funds that follow the small cap index v the micro cap index 

No doubt ... but given that the people ("smart money"?) designing these funds / systems are not all demented, these funds are often suitably designed to avoid giving traders at index inclusion / exclusion events a free ride ...

Of course - it doesn't always work out (both ways). So easy to forecast the future, but so difficult to get it right with odds better than random ...

Quote from: bulltrap on Feb 25, 2024, 06:42 PMNot so - there's a lot of money linked to the Small Cap index through index funds, and little if any on the Micro Cap index.

This was evidenced by absence of buy volumes on NZL and THL when they were promoted to the Micro Cap index in August 2023.

I haven't found any index fund that tracks the Micro Cap index.

There's been heavy selling of OCA and WHS already since the change was announced on 12th Feb, and we can expect that to culminate in huge volumes on the 29th.

The anecdotal evidence around lack of buying, (in the lead-up to microcap index inclusion), of the other stocks mentioned recently that are going into that index is highly supportive of your viewpoint. 

Geneva, May 14, 2024 MSCI GLOBAL STANDARD INDEXES

EBOS GROUP moved from main cap to small cap

FB review

We pick that Napier Port Holdings (NPH) will gain entry in the benchmark S&P/NZX 50 indices at the upcoming S&P/NZX June 2024 quarterly index review, with Sanford (SAN) exiting. Official outcomes of the review will be announced close of market, Friday, 7 June 2024, with an effective date close of market Friday, 21 June 2024.

Quote from: Shareguy on Jun 01, 2024, 11:16 AMFB review

We pick that Napier Port Holdings (NPH) will gain entry in the benchmark S&P/NZX 50 indices at the upcoming S&P/NZX June 2024 quarterly index review, with Sanford (SAN) exiting. Official outcomes of the review will be announced close of market, Friday, 7 June 2024, with an effective date close of market Friday, 21 June 2024.

I suppose that's SAN failing liquidity, as flagged previously, and NPH is first in line to replace it.

That might be giving WHS a stay of execution, but it's well out of the top 50 now and heading down.

Also wondering about SPY as potential inclusion. Looks like it's tracking ahead of NPH on free float, but not enough liquidity I guess?

If NPH/SAN happens this time, maybe SPY or TWR will replace WHS in the following rebalance.

Announcement out (https://www.nzx.com/announcements/432497) - no changes to NZX indices for June.

See you in three months time...

Both ARV and the WHS are in the NZX50. Early days but who will fill the void if and when the takeovers are successful.

FB said in thier May note that SAN will exit due to failed liquidity in the June re balance with NPH joining the NZX50

Neither of these happened then.

TWR looks like an absolute certainty.  I bought a few yesterday because of the pending index inclusion.  Cheap PE too.  Napier Port also a frontrunner if WHS gets privatized but I suspect the price range Tindall and Co are indicating is very opportunistic and that deal may not proceed.

Quote from: Basil on Jul 24, 2024, 09:37 AMTWR looks like an absolute certainty.  I bought a few yesterday because of the pending index inclusion.  Cheap PE too.  Napier Port also a frontrunner if WHS gets privatized but I suspect the price range Tindall and Co are indicating is very opportunistic and that deal may not proceed.

Yes I also brought in recently.  The fundamentals looks good and trading on very good metrics.  Inclusion will be a bonus.

Quote from: Basil on Jul 24, 2024, 09:37 AMTWR looks like an absolute certainty.  I bought a few yesterday because of the pending index inclusion.  Cheap PE too.  Napier Port also a frontrunner if WHS gets privatized but I suspect the price range Tindall and Co are indicating is very opportunistic and that deal may not proceed.

NPH has a 55% shareholder in hawkes bay council
That will reduce the free float considerably and make it hard for it to get into index

Geneva, August 12, 2024

MSCI GLOBAL MICRO CAP INDEXES The following are changes in constituents for the MSCI Global Micro Cap Indexes which will take place as of the close of August 30, 2024.

MSCI NEW ZEALAND INDEX

Additions - BRISCOE GROUP
Deletions - METRO PERFORMANCE GLASS

Quote from: Cod on Aug 27, 2024, 08:02 AMGeneva, August 12, 2024

MSCI GLOBAL MICRO CAP INDEXES The following are changes in constituents for the MSCI Global Micro Cap Indexes which will take place as of the close of August 30, 2024.

MSCI NEW ZEALAND INDEX

Additions - BRISCOE GROUP
Deletions - METRO PERFORMANCE GLASS

Market caps:
BGP - $974M
MPG - $15M

That's quite a range! (Due to BGP's small free float I suppose.)

Micro cap index changes tend not to move the market, although MPG is so illiquid that anything could happen.

This index overlaps with the arse end of the NZX 50, so maybe BGP will have a crack in the next year or two.

Disc: Holding both

Quote from: Shareguy on Jul 24, 2024, 07:11 AMBoth ARV and the WHS are in the NZX50. Early days but who will fill the void if and when the takeovers are successful.

FB said in thier May note that SAN will exit due to failed liquidity in the June re balance with NPH joining the NZX50

Neither of these happened then.

TWR replacing SAN in NZX50 rebalancing announcement due Friday evening (6th Sep) looks like a safe bet, given TWR's strengthening share price and SAN's weakening liquidity in recent months.

If ARV delists as expected, that'll leave NPH in pole position for replacing it, and WHS will be more comfortable to stay in.

Disc: Accumulating TWR and holding some NPH. Reluctantly grabbed some WHS today given the above, along with renewed takeover murmurings (https://businessdesk.co.nz/article/markets/the-warehouse-adamantem-still-hunting-a-bargain).

As per TWR thread recently, VSL is also tipped to exit, presumably on liquidity. The bulk of its trading is on the ASX.

If that pans out, NPH should also be in this week.

ARV's replacement would then be... maybe BGP already? SPY and WIN have bigger free float by my rough calcs, but liquidity might be too low.

Quote from: lorraina on Aug 20, 2024, 07:55 PMForbar's thoughts today;

Index Enter Exit Expected Weight (rank)
S&P/NZX 10 no changes expected n/a
S&P/NZX 20 no changes expected n/a
S&P/NZX 50 NPH & TWR SAN & VSL 0.17% (49) & 0.27% (44)
S&P/NZX 50 Portfolio NPH & TWR SAN & VSL 0.27% (49) & 0.43% (43)

September NZX (https://www.nzx.com/announcements/437634) rebalance is another fizzer - no changes of note.

Those tipped NZX50 liquidity exits aren't happening for some reason. Nevertheless, on the free float capitalisation rankings, TWR must be getting very close to bumping SAN or WHS out.

(I'm consulting Yahoo! Finance for its Free Float figures, would be interested to hear if there's a better source.)

Bugger !  https://www.youtube.com/watch?v=ZUNJd06iyWU&embeds_referring_euri=https%3A%2F%2Fwww.bing.com%2F&embeds_referring_origin=https%3A%2F%2Fwww.bing.com&source_ve_path=MjM4NTE

NZX50 ARV -> TWR done and dusted!

The next tipped index hiccup is MSCI World tipped SPK -> IFT, which I spent much of the weekend convincing myself was really happening. I recently got stung buying some SPK thinking it's a bargain (maybe it is), but have now swapped half of it for IFT and hope to break even someday...

For the NZX50 December review, with ARV off the list, WHS is looking comfortable to stay in. All up, no changes expected.

After that though, MNW buyout and delist could come ahead of the NZX50 March 2025 review, at the earliest. I've got NPH first in line to replace it, but BGP is on a trajectory to take the lead, and ERD just needs to pull a U-ey to be back in the race.

At the March review, WHS exit on cap ranking, and SAN exit on relative liquidity, are distinct possibilities. VSL also continues to be dicey on liquidity, with most of its trading being on the ASX and therefore not counted.

I'd say NPH, BGP and ERD are all worth considering on their merits, with potential NZX50 inclusion in the next five months being a sweetener.

(This analysis hinges on my free-float numbers, which I may've copied from a cubicle wall somewhere in a daze.)

Geneva, November 06, 2024 MSCI GLOBAL SMALL CAP INDEXES

MSCI GLOBAL STANDARD INDEXES
Additions INFRATIL
Deletions SPARK NEW ZEALAND

MSCI NEW ZEALAND INDEX
Additions SPARK NEW ZEALAND
Deletions INFRATIL

MSCI GLOBAL MICRO CAP INDEXES
Additions GENESIS ENERGY
Deletions ACCORDANT GROUP

All changes will be implemented as of the close of November 25, 2024

S&P NZX rebalance (https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20241205-1475780/1475780_20241206-quarta-nzx-map.pdf) for Dec 2024 is out. Much as expected, there are no changes.

I still suspect that VSL and SAN will have both failed relative liquidity tests by a whisker or two this time. That puts them 'on watch' for removal if they fail again in March.

(I'm not sure if S&P indicates this in their 'proforma files' to subscribers, but looking forward to broker commentary on this question - ForBar often have something to say.)

I also suspect that RYM is very close to dropping out of NZX10, with EBO being in front to replace it. But I don't think NZX10 changes impact the market much.

A week out from expected announcement S&P NZX rebalance for March 2025, I had another look at the standings.

Don't be surprised if:

• VSL drops out of NZX50 on second liquidity fail, replaced by NPH
• RYM drops out of NZX10 on float cap ranking, replaced by ATM (not EBO, which should already be in NZX10 - it's hard to find an up-to-date list)
• SAN stays in NZX50, thanks to better trading volume this quarter
• WHS stays in too - although ranking behind NPH, BPG and ERD, it's crucially ahead of RBD (narrowly) and STU

MNW takeover is still up in the air, but if it happens soon I'd expect BGP (almost put BPG!) to replace it in the NZX50. And I haven't heard of any new big listings in the pipeline.

S&P NZX rebalance (https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20250306-1477240/1477240_20250307-quarta-nzx-map.pdf) for Mar 2025 is out.

The expected RYM->ATM change for NZX10 happened, but no changes to NZX50.

I'm puzzled as to how VSL squeaked through the relative liquidity test in either the December or March rebalance... will take another look at that.

Disc: I forgivably picked up some NPH recently in the hope of inclusion. Happy to continue holding, and NZX50 still looks more like a 'when' than an 'if'.

Some NZX-relevant changes to S&P ASX indices for Mar 2025 (https://company-announcements.afr.com/asx/pme/a51e6d5f-fb19-11ef-9ad2-9673c0dd99c7.pdf) (3rd-party link) too:

• All Ords adding SMI, VGL
• All Ords removing KMD

Look to market close on Friday 21st March for NZX/ASX index fund rebalancing.

Quote from: bulltrap on Mar 07, 2025, 08:13 PMSome NZX-relevant changes to S&P ASX indices for Mar 2025 (https://company-announcements.afr.com/asx/pme/a51e6d5f-fb19-11ef-9ad2-9673c0dd99c7.pdf) (3rd-party link) too:

• All Ords adding SMI, VGL
• All Ords removing KMD

Look to market close on Friday 21st March for NZX/ASX index fund rebalancing.

More opportunities coming for ACC and NZ Superfund to keep filling their boots with KMD?

Remember - they just did ...
https://www.nzx.com/announcements/447666
https://www.nzx.com/announcements/447565

But then ... how many Australian Index funds do hold KMD anyway?

A bit late - oops

The following are changes in constituents for the MSCI Global Standard Indexes which took place as of the close of February 28, 2025.

MSCI GLOBAL STANDARD INDEXES
Additions CONTACT ENERGY
Deletions MERCURY NZ

MSCI GLOBAL SMALL CAP INDEXES
Additions MERCURY NZ
Deletions CONTACT ENERGY

MSCI GLOBAL MICRO CAP INDEXES
Deletions GENESIS ENERGY

Quote from: BlackPeter on Mar 08, 2025, 11:51 AMBut then ... how many Australian Index funds do hold KMD anyway?

Not many, if any. At least, there are no ETFs that track the All Ords - Motley Fool discusses (https://www.fool.com.au/2021/03/25/why-is-there-no-asx-all-ordinaries-etf/).

There is some money on the NZX10 though. Smart TNZ (https://www.smartinvest.co.nz/funds-and-performance/etfs/new-zealand-shares/smart-nz-top-10-etf) has around 1.25M RYM ($3.75M) to offload, to be replaced by around 1.5 times that value in ATM - let's say roughly $5.5M or 625K shares. More than a typical Friday's trading volume.

Hey Basil. 
Looking ahead to the June rebalancing. It's looking like the WHS and KMD will drop out.  What do you think of BGP and NPH sneaking in this time 😁

Prospects for those changes look good to me Scooter but I think a lot of that is already in the BGP' share price. Haven't looked at NPH for a while.

Thanks for that.  Where's the best info for looking at that sort of data.   I'd probably stay away from retail at the mo regardless of how good bgh. NPh I was one of the hawkesbay locals who Brought max allotment plus parents sold at 3.50 so I was quite happy. But I don't see it's divi return being very good.  Tower on the other hand as long as its all plain sailing it's a great hold for at least another 6 months. 

Announced on March 7th, effective Monday March 24th, though not the NZX50 (ATM is already on it), RYM has been removed and replaced with ATM on S&P/NZX 10 Index and the S&P/NZX Midcap Index.

https://api.nzx.com/public/announcement/448076/attachment/439244/448076-439244.pdf

Quote from: Scooter on Mar 21, 2025, 09:47 PMHey Basil. 
Looking ahead to the June rebalancing. It's looking like the WHS and KMD will drop out.  What do you think of BGP and NPH sneaking in this time 😁

Not directed at me, but I'd say for now KMD looks comfortably within the 55th place minimum ranking for staying in NZX50.

Taking MarketScreener's current market cap and free-float percentages as a point of reference, the ranking between NPH and WHS is something like:

Rank	Ticker	Market Cap (NZ$M)	Free-float (%)	Free-float (NZ$M)
49	NPH (https://www.marketscreener.com/quote/stock/NAPIER-PORT-HOLDINGS-LIMI-103506280/)	515	43%	220
50	KMD (https://www.marketscreener.com/quote/stock/KMD-BRANDS-LIMITED-103506238/)	256	80%	204
51	BGP (https://www.marketscreener.com/quote/stock/BRISCOE-GROUP-LIMITED-6495562/)	947	16%	148
52	ERD (https://www.marketscreener.com/quote/stock/EROAD-LIMITED-20708126/)	177	73%	129
53	RBD (https://www.marketscreener.com/quote/stock/RESTAURANT-BRANDS-NEW-ZEA-6492062/)	437	25%	107
54	WHS (https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/)	297	28%	84

(Some others including SEK, NZM, NZL, and DGL are also around this range, but mightn't meet the liquidity requirements.)

Thanks Bull trap.  Where do you find this info or do you put it together yourself.   I like you mentioned Seeka. I went overweight in that last week. Looks too good to be true. Be nice if they were added but a long term thing still at the mo 😁

Quote from: Scooter on Mar 26, 2025, 12:26 PMThanks Bull trap.  Where do you find this info or do you put it together yourself.  I like you mentioned Seeka. I went overweight in that last week. Looks too good to be true. Be nice if they were added but a long term thing still at the mo 😁

I linked to MarketScreener, but Yahoo Finance also gives free-float numbers, e.g. for NPH (https://finance.yahoo.com/quote/NPH.NZ/key-statistics/) currently:

Float / Shares Outstanding = 86.27M / 199.88M = 43%

They both give similar numbers, usually within 5% or so. Not sure why they differ, or if either is a better guide to S&P's IWF (Investable Weight Factor) as used in the official index calcs.

Digging deeper, S&P documents their methodology in methodology-sp-float-adjustment (https://www.spglobal.com/spdji/en/documents/index-policies/methodology-sp-float-adjustment.pdf), and NZX considerations in methodology-sp-nzx-index (https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-nzx-index.pdf). Companies whose NZX listings are secondary (including WBC, ANZ, VSL) are given special treatment. S&P do offer subscriptions to index data but it'd cost, and trying to reproduce their numbers independently (by poring through major shareholdings in annual reports I guess) would be tedious and error-prone.

From the other channel, rise of ETF's are creating opportunities with indexes.


The red hot method professionals are using to thump the ASX and ETF investors

https://www.livewiremarkets.com/wire...rm=Read%20More
"the passive money phenomenon is now "distorting markets" so much that it's something active investors have no choice but to consider if they want to get ahead. "

Quote from: Sideshow Bob on May 05, 2025, 09:22 AMFrom the other channel, rise of ETF's are creating opportunities with indexes.


The red hot method professionals are using to thump the ASX and ETF investors

https://www.livewiremarkets.com/wire...rm=Read%20More
"the passive money phenomenon is now "distorting markets" so much that it's something active investors have no choice but to consider if they want to get ahead. "

actually - try this link:
https://www.livewiremarkets.com/wires/the-red-hot-method-professionals-are-using-to-thump-the-asx-and-etf-investors
It does work :) ;

If you look into the comments, he even explains when the method works: If the share performs a bit better than funds assumed, then they all need to buy a bit more shares, and this way driving the price up. Pocket your profit - so easy.

However - if the share performs prior to inclusion a bit lower than funds assumed ... guess what  :'( ; - and you can ditch your options. not even paper to burn these days.

So - its just another method to make or loose money - like playing roulette. Only difference - there are no limits (in both directions).

The de-listing of Manawa Energy from the NZX50 will see NPH as the next likely inclusion in the NZX50. As a reminder the next rebalance (announced 6 June) is expected to see WHS removed and replaced by Briscoes  (effective 20 June.

STU have aspirations to be a NX50 company

Quote from: Shareguy on May 07, 2025, 01:42 PMThe de-listing of Manawa Energy from the NZX50 will see NPH as the next likely inclusion in the NZX50. As a reminder the next rebalance (announced 6 June) is expected to see WHS removed and replaced by Briscoes  (effective 20 June.

From MNW's announcement (https://www.nzx.com/announcements/451119) today, takeover is expected to go ahead in July, but needs shareholder approval first, presumably early June (no date set yet for meeting).

Given the S&P rebalance announcement is also early June, I'm leaning towards S&P not preemptively dropping MNW, and instead aligning with the delisting schedule - even though that might only be a couple of weeks later.

As per my previous post, I wasn't expecting WHS to drop out of the NZX50 based on ranking, and estimate NPH free-float to be well ahead of BGP. That hinges on BGP having a very low free-float - feel free to correct that if you have a good source.

VSL relative liquidity on the NZX has been continuing to worsen, so a VSL->NPH replacement in June is also plausible.

Once MNW and/or VSL is out, WHS moves up a slot and is even more comfortable. Best bet to knock it out would be a resurgence from two of STU, PEB and RAK - or some big new listings. Could happen eventually, unless WHS gets taken private first.

Briscoes only making $30m NPAT this half but confident of more second half.  Gosh even if they make $33m second half that's only eps of 28 cps for the year and forward PE of 15.7 for a company with no growth.   By comparison I have TRA on forward FY26 metrics of 11.8 and HLG on 10.5 for FY26, average of 2 analysts covering it.  Both those companies are growing... 

Quote from: winner (n) on May 07, 2025, 03:38 PMSTU have aspirations to be a NX50 company

It's a sad indictment of the local landscape that the current NZX50 contenders - NPH, BGP, ERD, STU, PEB, RAK - are all supplicants for readmission.

https://api.nzx.com/public/announcement/452991/attachment/445198/452991-445198.pdf

Briscoes in, WHS out in the cold where frankly, management deserve to be.  Good stuff.  This clears the road for the next biggest company by free float market market cap, which according to Forsyth Barr is NPH to be included in the NZX50 when the Manawa energy takeover receives final approval.
Disc: Modest position recently acquired in NPH.

Quote from: Basil on Jun 06, 2025, 05:36 PMhttps://api.nzx.com/public/announcement/452991/attachment/445198/452991-445198.pdf

Briscoes in, WHS out in the cold where frankly, management deserve to be.  Good stuff.  This clears the road for the next biggest company by free float market market cap, which according to Forsyth Barr is NPH to be included in the NZX50 when the Manawa energy takeover receives final approval.
Disc: Modest position recently acquired in NPH.

Mea culpa! I like the change, but it's another fail for my attempts to track the index calcs.

Clearly there's a big difference between the free float weightings used by S&P, and the ones I'm scrounging from third parties. BGP in particular has large strategic holdings, that I expected to rank it below NPH, despite its market cap being higher.

I'm going to have to do more debugging... and buy some BGP. This is going to be a squeeze on the available sell volumes.

(Still holding NPH, and that is at least going well, especially with the buybacks.)

https://www.goodreturns.co.nz/article/976524502/index-reshuffle-lifts-briscoe-group-as-australian-holiday-subdues-nzx-trading.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+9+Jun+2025

I topped up with more NPH today.  I'm also pretty sure its the next cab off the rank.  Still trades cum 6.5 cps fully imputed divvy.

A reminder that next Thursday (19 June) the NZX50 rebalance sees Briscoes ENTER the NZX50 and The Warehouse EXIT.

Thanks Shareguy.  Pretty sure it happens on Friday 20th.
BGP on a FY25 PE of 20.9 at $5.74 and I note it has had declining eps in recent years, 

Opps, apologies, I think you are right Shareguy.  Matariki day, is on 20 June so the markets will probably be closed, so index rebalance is on 19 June.

So the next index change is upon us imminently with Manawa shareholders voting to take the scheme implementation agreement and its provisionally scheduled to be suspended from trading on the NZX on 7 July, which is Monday week, so not far away !

With NZX usually giving 4-5 working days notice of change it would appear whoever is going to replace Manawa in the NZX50 is highly likely to be announced very early next week, (if it hasn't already and I have missed it ?)

Forsyth Barr are picking NPH.  It was interesting to see Briscoes come in for a huge run after its index inclusion was announced.  Could the same happen for NPH next week ?  I guess we will see.
Disc: Small position in NPH.

Quote from: Basil on Jun 28, 2025, 05:39 PMSo the next index change is upon us imminently with Manawa shareholders voting to take the scheme implementation agreement and its provisionally scheduled to be suspended from trading on the NZX on 7 July, which is Monday week, so not far away !

With NZX usually giving 4-5 working days notice of change it would appear whoever is going to replace Manawa in the NZX50 is highly likely to be announced very early next week, (if it hasn't already and I have missed it ?)

Forsyth Barr are picking NPH.  It was interesting to see Briscoes come in for a huge run after its index inclusion was announced.  Could the same happen for NPH next week ?  I guess we will see.
Disc: Small position in NPH.

Will be some interesting index movements as a $2 billion cap company replaced with a $350m cap company. Should see all other nzx50 components increase their weightings

Quote from: Poet on Jun 28, 2025, 06:24 PMWill be some interesting index movements as a $2 billion cap company replaced with a $350m cap company. Should see all other nzx50 components increase their weightings

Not sure it's going to be quite as dramatic as that as it's based on free float market cap so Infratil's stake in Manawa would have been excluded for NZX50 market weight calculations but yes, you make a very good point about other index constituents reweightings. Next week could be quite interesting.

Speaking of index inclusion bumps.

IFT heading for ASX50 inclusion later this year.....possibly Sept according to CFO of Morrisons at a recent S/Holders meeting.

Quite a big deal apparently.

Confirmation as Forsyth Barr predicted, Manawa Energy out of the NZX, Napier Port in, effective prior to open on Tuesday 8 July.
https://api.nzx.com/public/announcement/454260/attachment/446615/454260-446615.pdf

Quote from: Basil on Jun 30, 2025, 06:57 PMConfirmation as Forsyth Barr predicted, Manawa Energy out of the NZX, Napier Port in, effective prior to open on Tuesday 8 July.
https://api.nzx.com/public/announcement/454260/attachment/446615/454260-446615.pdf

Congratulations NPH! Long time spent knocking on that door.

That puts ERD squarely next in line, maybe as a replacement for THL if takeover goes ahead.

After that, who knows what might get trawled from the depths of the NZX? It'll depend very much on S&P's dubious implementation of their own relative liquidity test. I'd put NZM and SPY next on free-float cap, but unlikely candidates due to low liquidity and/or being current targets for acquisition. Then there's RBD, maybe SEK, even STU or NZL.

The wildcard in the deck is PEB... it could jump out of the box with any news of Medicare coverage reinstatement, with the pending cap raise as a force multiplier.

Disc: holding NPH and ERD, while juggling PEB with my feet.

Briscoes down 17% since inclusion day

But at $5.20 still a pretty respectable price

Just highlights what inclusion can do ...maybe we need to feel sorry for the funds who bought an over priced share ...hopefully off stocktalk punters

For Bar's thoughts

S&P DJI has announced that Manawa Energy (MNW) will be removed from the benchmark S&P/NZX 50 indices, subject to the final court approval of the scheme of arrangement, whereby the company will be acquired by Contact Energy (CEN). Napier Port Holdings (NPH) has been confirmed to replace MNW in the S&P/NZX 50 benchmark indices, effective close of market, Monday, 7 July 2025.

Napier Port Holdings confirmed to enter the S&P/NZX 50 benchmark indices
Napier Port Holdings (NPH) is confirmed as the replacement for MNW in the benchmark S&P/NZX 50 and 50 Portfolio indices, with expected weights of 0.23% (rank 48) and 0.36% (rank 48) respectively. We expect passive demand for NPH will be in the order of ~3.8m shares (48x average daily volume [ADV]). MNW will exit at the last traded price on the effective date.


The (new) current status
Figure 2 outlines our current calculations for inclusion and exclusion in the benchmark S&P/NZX 50 indices. Our updated model now has EROAD (ERD) as the next cab off the rank, should any existing index member drop out. We note Vulcan Steel (VSL) continues to be on liquidity watch and is at risk of being removed from the benchmark 50 indices due to a lack of liquidity.

Quote from: winner (n) on Jul 01, 2025, 06:16 PMBut at $5.20 still a pretty respectable price

This is probably not the right thread for this but for what its worth I can't get my head around Briscoes share price.  Trades on a historic PE of 19.1 at $5.20 but where's the growth to support such a metric ?  Over my standard 5 year analysis timeframe I note EPS in FY20 of 28 cps and in FY25 of 27 cps.

That compares to HLG over the same timeframe growing EPS from 45 cps to forecasted 62 cps in FY25 a CAGR of 6.5% and trades on a historic PE 14.6.
I think its clear that "Blind Freddy" can tell you Glassons Au growth prospects are vastly better than Briscoes and it has a proven track record of growth but trades on a significantly lower metric.

Briscoes valuation looks even worse compared to Turners which trades on a historic PE of 16.1 but a forecast next year's (FY27) PE of 13.2 and yet despite this modest forward metric has grown eps from 24 cps to 43 cps over the same timeframe a CAGR of just over 12%

I do note that analysts think Briscoes can grow earnings to 30 cps next year, 32 cents in FY27 and 35 cps in FY28, presumably on the back of households having more discretionary spend with lower interest rates but if they do make 35 cps in FY28 at that stage of the economic cycle that's still 5 cents lower earnings than the last time interest rates bottomed in FY22 when they made 39 cps.  Where's the growth and what's the investment case on a PE of 19 ?  I don't see it.  By my reckoning Briscoes is a no growth cyclical stock that deserves a PE of 8.5.  Maybe if Briscoes has a 60% off sale of its own shares I will buy some lol.

 

No change and no surprises in S&P NZX indexes for September 2025 (https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20250905-1479723/1479723_20250905-quarta-nzx-map.pdf).

There are some changes to S&P ASX indexes (https://announcements.asx.com.au/asxpdf/20250905/pdf/06nwybq98lf9h0.pdf) for dual-listed companies though. These are posted as company announcements on the ASX, but apparently not on the NZX.

Effective close Friday 19th September:

• EBO add to ASX 200
• SKC remove from ASX 300
• ERD add to ASX All Technology Index

Fun fact: S&P averages six months of price data for NZX index rankings (https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-nzx-index.pdf), but starting from this rebalance, this is reduced to three months for ASX (https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-asx-australian-indices.pdf). So ERD's recent upward rerates have double the effect on the ASX, which likely helped it over the line.

EBO and SKC both had significant drops right about the end of the price window, so they don't factor significantly here. That's unlike MSCI indexes, which use a single recent day's closing price.

With restaurant brands highly likely to leave the nzx50 once takeover complete. Does this put erd in prime postion?
Just a add onto this post from earlier today.  I'm guessing others have cottoned on to this

Quote from: Scooter on Sep 30, 2025, 01:18 PMWith restaurant brands highly likely to leave the nzx50 once takeover complete. Does this put erd in prime postion?
Just a add onto this post from earlier today.  I'm guessing others have cottoned on to this

RBD has been out of the NZX 50 since March 2023 (https://api.nzx.com/public/announcement/407811/attachment/390079/407811-390079.pdf).

If RBD is delisted, that doesn't help ERD get in sooner, but it should make it within the next year one way or another.

After ERD makes it in though, RBD had been looking like a contender for readmission. With both out of the way, I'm leaning a bit more towards SEK or (optimistic outside chance) PEB to follow. Still too early for a trade, but never too early to invest.

Disc: Holding ERD and PEB... regrettably missed out on RBD

Quote from: bulltrap on Sep 30, 2025, 06:55 PMRBD has been out of the NZX 50 since March 2023 (https://api.nzx.com/public/announcement/407811/attachment/390079/407811-390079.pdf).

If RBD is delisted, that doesn't help ERD get in sooner, but it should make it within the next year one way or another.

After ERD makes it in though, RBD had been looking like a contender for readmission. With both out of the way, I'm leaning a bit more towards SEK or (optimistic outside chance) PEB to follow. Still too early for a trade, but never too early to invest.

Disc: Holding ERD and PEB... regrettably missed out on RBD

Thanks for that bulltrap. 
Ive always struggled to pull the right website to show me this info.   Today I tried chatgtp as I wasn't sure.   I even asked if it was sure. It's why I dont trust it for info.  More as a confirmer of information I already know.  I didn't wait around today and sold out of resturant brands. It's only 15 cents.  So I can put it in other things.

Quote from: Scooter on Sep 30, 2025, 07:53 PMThanks for that bulltrap. 
Ive always struggled to pull the right website to show me this info.  Today I tried chatgtp as I wasn't sure.  I even asked if it was sure. It's why I dont trust it for info.  More as a confirmer of information I already know.  I didn't wait around today and sold out of resturant brands. It's only 15 cents.  So I can put it in other things.

Totally agree. As the saying goes, a bird in the hand is worth more than 1.03 in the bush. Especially if it's already seasoned and fried.

I'm also yet to find a good public source of NZX 50 index constituents. There's one at interest.co.nz (https://www.interest.co.nz/nzx50) that is actively maintained and looks correct on which companies are included, but not on their percentage weightings or rankings - e.g. BGP is at #27 but should be more like #49 when adjusted for free-float.

Forsyth Barr puts out a liquidity analysis piece each quarter (e.g. Sep 2025 (https://secure.forsythbarr.co.nz/research/library/PBGDd9Jl), Jun 2025 (https://secure.forsythbarr.co.nz/research/library/ApPvPgJb)) that includes the up-to-date constituents and their rankings. They subscribe to the official data from S&P, and also do their own modelling, so this should be dependable - but it isn't at a fixed URL, and not strictly public as you need a client web account.

This ex For Bar

S&P DJI has confirmed no constituent changes will be made to the S&P/NZX 50 benchmark indices, whilst announcing one change in the S&P/NZX 20 index in the latest December 2025 quarterly index review. Changes are effective close of market Friday, 19 December 2025.

GNE enters the S&P/NZX 20 Index
Gentrack Group (GTK) will exit the S&P/NZX 20 index, having dropped below the automatic exclusion threshold for the six-month average free-float market cap. This has allowed Genesis Energy (GNE) to enter. We expect passive demand for GNE to be in the order of +2.5m shares (6x average daily volume [ADV]). Selling in GTK will be in the order of -0.5m shares (4x ADV).

Another review of indices due in next week or so

Who might get into NZX50? Or kicked out?

Quote from: winner (n) on Feb 24, 2026, 06:13 PMAnother review of indices due in next week or so

Who might get into NZX50? Or kicked out?

For Bar put out a note recently and said no changes

Quote from: Greekwatchdog on Feb 25, 2026, 06:19 AMFor Bar put out a note recently and said no changes

Quote from: Greekwatchdog on Feb 25, 2026, 06:19 AMFor Bar put out a note recently and said no changes

I took up some business with ForBar with their index commentary as a perk. Here's my take on their latest update (here (https://secure.forsythbarr.co.nz/research/library/8pqwg4Jl) if you have access):

• No changes to NZX50 or other S&P NZX indices expected
• VSL still iffy on meeting liquidity requirements, but expected to pass
• ERD is still next in line, followed by SEK, PEB, RAK and then SMI

I get the impression that ForBar doesn't know for sure if VSL passed liquidity in the Dec 2025 review. If it actually failed, it's likely it fails again, which would trigger VSL exit with ERD replacing it. Consider it an outside chance.

If ERD doesn't make it this time, I expect it'll lose its front-runner spot for the next review. It went 'parabolic' last year, and its September high of NZ$2.94 is still in the 6-month pricing window, giving it an average price (per ForBar) of $1.76. But then it literally went parabolic back to ground zero, down to around $0.90 this week. The average price is already following it down.

Meanwhile, PEB is on the resurgent, and the bull-bait case for the year is that it could regain both Medicare coverage and its spot on the NZX 50.

That said, let me make a case for SMI. Its primary listing is in Australia, so only some fraction of its free-float counts towards NZX index rankings. ForBar apparently have this fraction a bit under 25% - again, not sure if they get this from S&P or their own modelling. But I think this number is on the low side, noting that SMI's traded volume on the NZX is closer to a third of NZX+ASX, and that by mid-2024 when the NZX listing was announced over 40% (https://www.listcorp.com/asx/smi/santana-minerals-limited/news/santana-applies-to-add-new-zealand-stock-exchange-listing-3050907.html) of the share registry had NZ addresses.

The 'IWF' fraction actually used, according to the index methodology (https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-nzx-index.pdf), comes from the number of shares registered in NZ. That's influenced by whether NZ-based investors bothered going through the tedious (and perhaps pointless) process of shunting their holdings over. I'm not aware of these numbers being available publicly, and S&P might get privileged info from the share registry (MUFG in this case) or maybe the exchanges.

(As an aside, until 2023 the IWF would've been based instead on what proportion of revenue came from NZ.)

The combined effects for SMI of an upward IWF revision, cap raisings, and further upward price moves, could easily put it in pole position for the June 2026 review.

Disc: Holding ERD through the potholes. It's been good to me in the past and my holding is all free carry. PEB likewise. Also holding SMI.

Quote from: bulltrap on Feb 25, 2026, 08:58 PMI took up some business with ForBar with their index commentary as a perk. Here's my take on their latest update (here (https://secure.forsythbarr.co.nz/research/library/8pqwg4Jl) if you have access):

• No changes to NZX50 or other S&P NZX indices expected
• VSL still iffy on meeting liquidity requirements, but expected to pass
• ERD is still next in line, followed by SEK, PEB, RAK and then SMI

I get the impression that ForBar doesn't know for sure if VSL passed liquidity in the Dec 2025 review. If it actually failed, it's likely it fails again, which would trigger VSL exit with ERD replacing it. Consider it an outside chance.

If ERD doesn't make it this time, I expect it'll lose its front-runner spot for the next review. It went 'parabolic' last year, and its September high of NZ$2.94 is still in the 6-month pricing window, giving it an average price (per ForBar) of $1.76. But then it literally went parabolic back to ground zero, down to around $0.90 this week. The average price is already following it down.

Meanwhile, PEB is on the resurgent, and the bull-bait case for the year is that it could regain both Medicare coverage and its spot on the NZX 50.

That said, let me make a case for SMI. Its primary listing is in Australia, so only some fraction of its free-float counts towards NZX index rankings. ForBar apparently have this fraction a bit under 25% - again, not sure if they get this from S&P or their own modelling. But I think this number is on the low side, noting that SMI's traded volume on the NZX is closer to a third of NZX+ASX, and that by mid-2024 when the NZX listing was announced over 40% (https://www.listcorp.com/asx/smi/santana-minerals-limited/news/santana-applies-to-add-new-zealand-stock-exchange-listing-3050907.html) of the share registry had NZ addresses.

The 'IWF' fraction actually used, according to the index methodology (https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-nzx-index.pdf), comes from the number of shares registered in NZ. That's influenced by whether NZ-based investors bothered going through the tedious (and perhaps pointless) process of shunting their holdings over. I'm not aware of these numbers being available publicly, and S&P might get privileged info from the share registry (MUFG in this case) or maybe the exchanges.

(As an aside, until 2023 the IWF would've been based instead on what proportion of revenue came from NZ.)

The combined effects for SMI of an upward IWF revision, cap raisings, and further upward price moves, could easily put it in pole position for the June 2026 review.

Disc: Holding ERD through the potholes. It's been good to me in the past and my holding is all free carry. PEB likewise. Also holding SMI.

You mentioned SEK in your list. They doing pretty well lately. 2 divs over 2 months and another due next month.

Quote from: seaweed on Feb 25, 2026, 09:59 PMYou mentioned SEK in your list. They doing pretty well lately. 2 divs over 2 months and another due next month.

Supposing things go sideways from here, SEK falls behind PEB pretty soon. Getting a place needs a couple of surprise exits, and no new big listings.

It would've been a fantastic long-term hold for the last couple of years - doubling share price and good dividends. But on the face of it, retaining the earnings might be more helpful for getting in the index.

Quote from: bulltrap on Feb 25, 2026, 08:58 PMI took up some business with ForBar with their index commentary as a perk. Here's my take on their latest update (here (https://secure.forsythbarr.co.nz/research/library/8pqwg4Jl) if you have access):

• No changes to NZX50 or other S&P NZX indices expected
• VSL still iffy on meeting liquidity requirements, but expected to pass
• ERD is still next in line, followed by SEK, PEB, RAK and then SMI

I get the impression that ForBar doesn't know for sure if VSL passed liquidity in the Dec 2025 review. If it actually failed, it's likely it fails again, which would trigger VSL exit with ERD replacing it. Consider it an outside chance.

If ERD doesn't make it this time, I expect it'll lose its front-runner spot for the next review. It went 'parabolic' last year, and its September high of NZ$2.94 is still in the 6-month pricing window, giving it an average price (per ForBar) of $1.76. But then it literally went parabolic back to ground zero, down to around $0.90 this week. The average price is already following it down.

Meanwhile, PEB is on the resurgent, and the bull-bait case for the year is that it could regain both Medicare coverage and its spot on the NZX 50.

That said, let me make a case for SMI. Its primary listing is in Australia, so only some fraction of its free-float counts towards NZX index rankings. ForBar apparently have this fraction a bit under 25% - again, not sure if they get this from S&P or their own modelling. But I think this number is on the low side, noting that SMI's traded volume on the NZX is closer to a third of NZX+ASX, and that by mid-2024 when the NZX listing was announced over 40% (https://www.listcorp.com/asx/smi/santana-minerals-limited/news/santana-applies-to-add-new-zealand-stock-exchange-listing-3050907.html) of the share registry had NZ addresses.

The 'IWF' fraction actually used, according to the index methodology (https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-nzx-index.pdf), comes from the number of shares registered in NZ. That's influenced by whether NZ-based investors bothered going through the tedious (and perhaps pointless) process of shunting their holdings over. I'm not aware of these numbers being available publicly, and S&P might get privileged info from the share registry (MUFG in this case) or maybe the exchanges.

(As an aside, until 2023 the IWF would've been based instead on what proportion of revenue came from NZ.)

The combined effects for SMI of an upward IWF revision, cap raisings, and further upward price moves, could easily put it in pole position for the June 2026 review.

Disc: Holding ERD through the potholes. It's been good to me in the past and my holding is all free carry. PEB likewise. Also holding SMI.

Thank you for the excellent commentary

S&P's NZX index review for March 2026 just in (https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20260305-1482257/1482257_20260306-quarta-nzx-map.pdf).

No changes! How exciting. :(

... the ASX 200 index review (https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20260306-1482258/1482258_20260306-quarta-200.pdf) is also out now, with EBOS dropping out being the highlight for NZX watchers.

That's due for close on Friday March 19th.

It was only just added in the September 2025 review, so this is a nasty little rug pull for EBO holders, including ETFs who will be forced to sell low after buying high. (Edit: actually the ETFs got a lucky break buying in 33% down from then-recent highs... but even then, latest prices suggest a 20%+ haircut on that six-month hold.)

I suppose this instability is partly due to the recent shift to 3-month average prices for index ranking for S&P ASX indices, down from six months. The NZX still uses six months, which IMO is better as it blends across two review periods.

One thing I noticed is that exits on the ASX are often anticipated by a buildup of short positions over several months, which I interpret as instos buffering the exit. An example is CAT (https://www.shortman.com.au/stock?q=CAT) whose exit was just announced - shorts up from 3% at the December review to 6.5% now. In the case of EBO (https://www.shortman.com.au/stock?q=EBO), the short position is quite small, so it may be harder to re-home the ex-ETF holdings. But maybe the rules or dynamic is different for dual-listed shares.

In the asx all ordinaries these are removals. Looks like it's on the back of all the mineral companies going up in big values. So nzx companies taking the hit
Air New Zealand
Ike gps
Michael hill
Nzme
Vista

Strange that S&P only shows the ASX 200 changes on their announcement page (https://www.spglobal.com/spdji/en/media-center/news-announcements/#indexNews).

So far I can only see the full ASX release (https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-03065624_PS-6A1315175&v=undefined) in ASX news (https://www.asx.com.au/markets/trade-our-cash-market/announcements) for some of the affected companies.

Something positive buried in amongst all the dual-listed exits... SMI being added to the ASX 300. 8)

For Bar update

Updating the Forsyth Barr Quant inclusion/exclusion model

Rolling forward current pricing and assuming current liquidity calculations hold, our model suggests the June 2026 index review will also see no changes to the headline S&P/NZX indices.

However, that being said, Vulcan Steel (VSL) continues to walk the liquidity tightrope. There has also been a change in the leaderboard for non-indexed companies.

Using rolled forward pricing, the highest-ranked (by free float six-month average market cap) non-indexed company is now Seeka (SEK), closely followed by Pacific Edge (PEB).

We note that although Rakon (RAK) ranks as the highest non-index member, it is currently under takeover and we have therefore looked to the next candidates.

Taking another look at my mocked-up NZX 50 standings, roughly mid-cycle... while there's a lot going wrong in the world, the most consequential boo-boo in this niche has been KMD announcing (https://www.nzx.com/announcements/470163) that its apparel business is effectively pants, and launching a deeply-discounted and dilutionary capital raise to try and stitch it up.

At last count after S&P's March review, KMD was tipped to be squarely in last place in the NZX 50, and already ranking below several contenders to take its spot. So there was already a big question of if and when KMD might drop out and be replaced.

Important detail: Paraphrasing the S&P NZX Indices methodology (https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-nzx-index.pdf), when the index review rolls around, if a laggard such as KMD ranks 56th or worse over a six-month window, it gets the boot.

When KMD resumed trading on 2nd April following its cap raise announcement, its share price dropped from 19.5c last traded, to close at 8.8c. Based on the number of shares actually on issue, that gave it a market cap of only around $63M, and a ranking of dead last across the whole NZX for free-float for that particular day. (There are smaller companies, but none that ace the trading liquidity requirements for index inclusion.)

At that point, it's tempting to declare KMD gone-burgers in the coming June index review, and pass the mantle to SEK as the likely replacement - and some have been saying just that, including Seeka's CEO.

But that scenario hinges on the bonkers outcome that by raising $65M (underwritten, no less), KMD somehow ends up worth significantly less than before the raise - despite boosting capital by almost 50%, compared to its pre-raise market cap of $139M.

Bonkers as it may seem, at today's close price of $0.066, the market is signalling that once the deal is done, with 1.8B total shares on issue, KMD will only be worth $119M. That is, $65M of proverbial 'good money' thrown in with $20M of 'bad'.

To be fair, KMD management did serve the market several courses of dog's breakfast all at once. So let's assume the repricing is justified, and not just a knee-jerk reaction.

Taking KMD's free-float ratio ('IWF' in the index calc) to be 0.93 and assuming the cap raise doesn't change it by much, this puts KMD's free-float at around $110M, behind credible replacement candidates SEK, SMI, PEB and ERD, and partying with the likes of NZM, DGL, AFT and NZL. It'd only take two of the latter bunch to meet trading liquidity requirements (they're all borderline), not fall victim to a takeover attempt, and nudge ahead on free-float, to push KMD down to 56th.

So the answer to the if question is 'maybe', and the answer to the when should be 'let's see'...

This is very sensitive to the details of how S&P calculate market cap for ranking purposes, the main points being:

- a trailing six-month window is considered - history matters, not just the latest standings
- prices are adjusted for corporate actions, before averaging
- average price is multiplied by the latest count of outstanding shares, to get the average market cap
- market cap is scaled down to isolate the free-float

The handling of corporate action price adjustment is documented in Equity Indices Policies & Practices (https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-equity-indices-policies-practices.pdf), but takes some second-guessing to interpret.

For the KMD situation:

- About 70% of the window for the June review falls prior to the cap raise
- My best guess (see footnote): pre-raise prices should be scaled down to about 0.58x, consistent with scaling that 19.5c down to the TERP of 11.3c
- Shares outstanding was about 712M pre-raise, and expected to bloat to 1.8B, scaling by a factor of 2.53x.

Combining the effect of downward price adjustment with new share issue, the historical pre-raise market cap considered for index ranking is treated as being 47% higher than it actually was.

That's another bonkers result, rewarding rather than punishing, and it puts KMD back up to 50th place for the June review at current prices. It gets to stay in even if it trades at $0.001 henceforth.

It's doubly-bonkers that this historical revision even applies to the three-month window overlap that S&P already considered for the March review.

Ideally S&P would consider the actual market cap history to avoid such aberrations - all that would technically require is a daily feed of shares outstanding. On those terms, KMD's chances in the June review would be too close to call.

Summing up, KMD looks pretty safe for the June review, largely due to silly technicalities, unless perhaps S&P can make a discretionary call to drop them.

For September and beyond, I think the chances of KMD dropping out are going to be high, particularly if they stay in the sub-10c range. But it's too soon to tip a likely replacement.

Footnote: Market data sources I checked generally now show the 25th March close price as 11.7c, scaled down from the original 19.5c. That's consistent with a TERP calculated from a 1-for-0.73 rights issue, but different from the 11.3c TERP given by KMD based on shovelling the placement in with the rights. I think S&P will use the latter TERP (see 'Accelerated Rights Offering' in the S&P doc), but I do have some doubt around whether the adjustment is really by scaling as opposed to subtracting. For current purposes the choice of adjustment formula doesn't matter, KMD ends up safely around 50th place in June review projections.