Which Stocks Will Get MSCI Index Entry Ticket? Analysts Ponder
The quarterly MSCI index review is fast approaching, and analysts have started predicting on which stocks may be added and deleted
(Bloomberg) -- The quarterly MSCI Inc. index review is fast approaching, and analysts are starting to give predictions on which stocks may be added and deleted.
For Asia, a candidate for inclusion is Showa Denko K.K., Churchill Capital and Instinet Pacific Services said ahead of MSCI’s decision due Aug. 14 early Hong Kong time. The company, one of Japan’s top chemicals firms, has seen its market value almost double in the past year to 774 billion yen ($7 billion), thanks to an improving earnings outlook and acquisition plan in Europe.
“Due to its increased market cap, it should now pass the required level in order to move from the small caps to the MSCI Japan Index,” said Todd Rice, a sales trader at Churchill Capital in Singapore. That would trigger a jump in volume as passive funds would buy the shares in the two days following the inclusion, he said.
MSCI reviews its index members every quarter, based on criteria such as market value and geographies. Almost $14 trillion in equity assets are estimated to be benchmarked to the index provider’s gauges globally, MSCI says on its website, based on data as of December.
Other potential additions this round are Page Industries Ltd., an Indian seller of underwear, and China’s Hua Hong Semiconductor Ltd., Churchill Capital and Instinet said. Japan’s Suruga Bank Ltd. and Indian financial firm Vakrangee Ltd. may be removed.
MSCI’s index changes will take effect at the close of markets on Aug. 31.
To contact the reporter on this story: Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Cecile Vannucci, Margo Towie
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