The ASX 200 is of course the flagship index covering ASX shares. It represents the largest 200 companies on the ASX, weighted by market capitalisation. But an ASX share’s market cap changes every trading day (i.e. when its share price moves). As such, the index has to be continually rebalanced to ensure that it accurately reflects the ASX’s largest 200 companies.
The index provider S&P Global does this rebalancing every three months. And the latest rebalance took effect on Monday after being announced back on 3 June.
So yes, this was when BrainChip shares joined the ASX 200, alongside other ASX 200 newcomers like Lake Resources N.L. (ASX: LKE) and Core Lithium Ltd (ASX: CXO). These companies took the place of shares like Appen Ltd (ASX: APX) and Polynovo Ltd (ASX: PNV), which were kicked out of the ASX 200.
Conventionally, joining an index like the ASX 200 is viewed as a potentially positive catalyst for a company’s share price for a number of reasons. But has this been the case for Brainchip?
How has BrainChip’s first week as an ASX 200 share been?
It’s going well so far. Upon joining the ASX 200 on Monday, the BrainChip share price lifted. It ended its first day as an ASX 200 share up 1.1% at 92 cents.
But since then, BrainChip shares have drifted lower. They just closed at 89 cents each, down 3.26% on yesterday’s close. So overall, BrainChip has lost ground since becoming a member of the ASX 200 index.
But this is a company that routinely gives investors spades of volatility. The BrainChip share price has now lost almost 30% over the past month alone. But even so, it remains up more than 35% over the past six months, and up close to 70% over the past year.
At the company’s closing share price of 89 cents today, BrainChip shares have a market capitalisation of $1.57 billion.