ASX200 Index Change Opportunities

Australian Stock Exchange analysts, Macquarie Research Equities have recognised some trading opportunities as ASX200 has an Index change. The analysts' quant team has done some work around the changes to the Standard & Poor indices which were announced last Friday. New additions and deletions to the Australian indices were announced by S&P on 1 June with changes taking effect at close on 15 June. Demand by index (and enhanced index) funds, when stocks enter/exit indices, generally sees stocks outperform/underperform following announcement. Research on index changes shows that the greatest impact comes from additions/deletions to the ASX200, presumably because this is the major institutional benchmark. Additions to the ASX200 are News Corp (NWS), Boart Longyear (BLY), Mincor Resources (MCR), SingTel (SGT), Queensland Gas (QGC) and Sally Malay Mining (SMY). Deletions are Australian Pharmaceuticals (API), ARC Energy (ARQ), Bendigo Mining (BDG), Kimberley Diamond (KIM), Kingsgate Consolidated (KCN) and Tower (TWR). Stocks that are added to both the ASX200 and ASX300 generally have even stronger outperformance in the lead-up to inclusion. NWS, BLY and Singapore Telecommunications (SGT) fit these criteria in the current crop of changes. Note that the analysts have an Outperform recommendation for both NWS and BLY.