A number of shares could be on the move on Friday after S&P Dow Jones Indices announced its September 2019 quarterly rebalance of the S&P/ASX Indices.
Below is a summary of the changes that have been made, effective at the open of trading on September 23.
S&P/ASX 100 index changes.
There is just one change to the S&P/ASX 100 this quarter. That change will see private health insurance company NIB Holdings Limited (ASX: NHF) added to the index at the expense of struggling fund manager Pendal Group Ltd (ASX: PDL).
S&P/ASX 200 index changes.
The benchmark S&P/ASX 200 index has seen six changes this quarter. Added to the index are quick service restaurant operator Collins Foods Ltd (ASX: CKF), gold miner Gold Road Resources Ltd (ASX: GOR), high-flying lottery ticket seller Jumbo Interactive Ltd (ASX: JIN), investment platform provider Netwealth Group Ltd (ASX: NWL), medical device company Polynovo Ltd (ASX: PNV), and WA-based gold miner Silver Lake Resources Limited (ASX: SLR).
They will be replacing Dreamworld operator Ardent Leisure Group Ltd (ASX: ALG), pharmacy chain operator and distributor Australian Pharmaceutical Industries Ltd (ASX: API), fleet management company Eclipx Group Ltd (ASX: ECX), earthmoving equipment rental company Emeco Holdings Limited (ASX: EHL), packaging company Pact Group Holdings Ltd (ASX: PGH), and another pharmacy chain operator and distributor, Sigma Healthcare Ltd (ASX: SIG).
When a company is added to an index it can lead to an increase in demand for its shares from exchange traded funds that are designed to track an index and from fund managers that may have investment mandates which permit them to only buy shares on certain indices.
Conversely, when shares are removed it can lead to increased selling pressure as exchange traded funds dump them and fund managers are forced to sell them. Because of this, I wouldn’t be surprised to see some of these shares pushing higher or sinking lower today.