Saturday, November 3, 2007

Upcoming TSX Index Rebalancing

I have always wondered what kind of performance boost a stock gets when it's added to an index. One would think there would be extra demand for such a stock and hence a higher share price but from what I recall from casual observation, this is not always the case. So as a bit of an experiment, let's make a note of the likely candidates and revisit these stocks at year's end to see how they performed.

On November 2nd, The National Post's FP Trading Desk noted that:

Ahead of the December 2007 rebalancing of the S&P /TSX composite index – due to be announced by Dec. 14 and to take effect after markets close a week later – CIBC World Markets analyst Yin Luo is making his predictions as to what some of the changes may be.
QLT Inc., Angiotech Pharmaceuticals Inc., Cyries Energy Inc. and Ballard Power Systems Inc. are the four members of the benchmark index consider likely to be removed, based on data as of Oct. 30.
Meanwhile, nine companies meet the criteria for addition, Mr. Luo said in a research note. These include Allen-Vanguard Corp., Canadian Hydro Developers Inc., Canaccord Capital Inc., Mega UraniumLtd., Gold Eagle Mines Ltd., Gateway Casinos Income Fund, Timminco Ltd., Absolute Software Corp, and Sandvine Corp. European Goldfields Ltd. is also on his watch list for potential candidates for addition.


White Eagle said...

Latest story on this topic:

Possible changes to TSX composite index, expected in December

Published Thursday, November 15, 2007 11:09 AM by David Pett

"With six likely additions and 10 deletions, the S&P/TSX composite index could look a whole lot different after its expected quarterly rebalancing next month.

CIBC World Markets analyst Yin Luo lists Angiotech Pharmaceuticals, QLT, Cinram International, True Energy, Cyries Energy, and MEGA Brands as potential deletions.

Allen-Vanguard, Canadian Hydro Developers, Mega Uranium, Absolute Software, High River Gold Mines, Canaccord Capital, Sandvine, Jazz Air, Timminco, and Gold Eagle Mines, meanwhile, are all expected to be added to the list.

Mr. Luo also pointed out that European Goldfields Limited is also on the potential addition watch list.

The analyst expects S&P will make the announcement on or before Dec 14, with the changes taking effect after markets close on Dec 21."

White Eagle said...

A final prediction for December's TSX rebalancing

Posted: December 05, 2007, 11:01 AM by David Pett

CIBC World Markets analyst Yin Luo published his final forecast on Wednesday of likely additions and deletions to the S&P/TSX composite index when it gets rebalanced later this month.

Mr. Luo told clients that eight companies are likely to be added the the index, including Allen-Vanguard, Absolute Software, Canadian Hydro Developers, Gold Eagle Mines, Jazz Air, High River Gold Mines, Aecon Group, and Sandvine.

The analyst added that Canaccord Adams is on the watch list and could also be added to the list.

Meanwhile, MEGA Brands, Quebecor World, True Energy Trust, Gabriel Resources, Cinram International, Cyries Energy, ATS Automation Tooling Systems, Angiotech Pharmaceuticals, and QLT are all potential deletions.

The analyst expects S&P will make the announcement on or before Dec 14, with the changes taking effect after markets close on Dec 21.

White Eagle said...

Standard & Poor's Announces Changes in S&P/TSX Canadian Indices

December 14, 2007

TORONTO, Dec. 14 /CNW/ - Standard & Poor's Canadian Index Operations announces the following index changes as a result of the Quarterly S&P/TSX Composite Index Review. These changes will be effective at the open on Monday, December 24, 2007:



Aecon Group Inc. (ARE)
Allen-Vanguard Corporation (VRS)
Gold Eagle Mines Ltd. (GEA)
High River Gold Mines Ltd. (HRG)
Jazz Air Income Fund (JAZ.UN)


Angiotech Pharmaceuticals Inc.
ATS Automation Tooling Systems Inc.
Cinram International Income Fund
Cyries Energy Inc.
Gabriel Resources Limited
MEGA Brands Inc.
QLT Inc.
Quebecor World Inc.
True Energy Trust

Changes were also made to the following indices:
S&P/TSX Canadian Dividend Aristocrats Index

For more info:
Refer to the news release