NZX 50 Index - Forthcoming potential Changes.

[bulltrap]

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.

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.

[BlackPeter]

I 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 ...

[Basil]

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.

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. 

[Cod]

Geneva, May 14, 2024 MSCI GLOBAL STANDARD INDEXES

EBOS GROUP moved from main cap to small cap

[Shareguy]

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.

[bulltrap]

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.

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.

[bulltrap]

Announcement out - no changes to NZX indices for June.

See you in three months time...

[Shareguy]

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.

[Basil]

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.

[Shareguy]

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.

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

[Poet]

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.

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

[Cod]

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

[bulltrap]

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

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

[bulltrap]

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 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.

[bulltrap]

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.

Forbar'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)