Every three months Standard & Poors (S&P) announces a quarterly re-balancing of the ASX index hierarchy. It reviews each index, including the All Ordinaries (INDEXASX: XAO)(ASX: XAO).
Some businesses are added and some are removed from each index as their market capitalisations change. A company’s market capitalisation is calculated as the share price multiplied by the total number of shares that have been issued.
All of the below changes will take effect when the market opens on 19 March 2018.
In the S&P/ASX20 Index, the mining company South32 Ltd (ASX: S32) is going to be added but QBE Insurance Group Ltd (ASX: QBE) is going to be removed. The $930 million cash write-down that QBE had to make in its full year report was a major cause of this re-balance. Meanwhile, South32’s rising revenue and special dividend from its half year report helped its market capitalisation catch up to QBE’s.
In the S&P/ASX100 Index, Xero Limited (ASX: XRO) has joined the top 100 businesses with its growing number of subscribers. Cleanaway Waste Management Ltd (ASX: CWY) was the other company to be added to the ASX 100.
Fairfax Media Limited (ASX: FXJ) was kicked out of the ASX 100 after divesting some of its Domain Holdings Australia Limited (ASX: DHG) holdings, the remaining stake of Domain has dropped in value in part due to the CEO’s departure. Vocus Group Ltd (ASX: VOC) was another share to lose its place due to its falling share price and profit.
The S&P/ASX 200 Index (INDEXASX: XJO)(ASX: XJO) saw several changes. Organic infant formula company Bellamy’s Australia Ltd (ASX: BAL) is now in the index after delivering profit growth of more than 200%. Ausdrill Limited (ASX: ASL), Smartgroup Corporation Ltd (ASX: SIQ) and Xero also joined the index.
It wasn’t such good news for Myer Holdings Ltd (ASX: MYR) which saw it lose its spot in the ASX 200. Myer’s share price has fallen all the way down to $0.43. Australian Agricultural Company Ltd (ASX: AAC) and HT&E Ltd (ASX: HT1) were the other businesses to lose their position in the ASX 200.
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