The December ASX Index rebalance is expected to bring some key changes that echo the stock movements seen on ASX lately.
Particularly, ASX has seen Australian shares falling for the first time in three sessions at the back of impact from big miners where short selling is seen as a trend (for example short positions in Rio were stated to have moved up to 9%). Further, S&P/ASX 200 Index was seen to drop marginally on October 10 and this slashed the year’s rise to 1.2%. Primarily, a lot of movements is seen in shares of many blue-chips and mid-caps with some small companies now moving to a better position. For instance, shares of Commonwealth Bank of Australia have been slipping in anticipation of bank dropping its internal return on equity targets at the back of the recent regulatory debacle related to Austrac allegations. On the other hand, AMP shares have seen some sunshine with rating upgrade by brokers post underperforming the market for few months based on its first half 2017 results. Platinum Asset Management also added to gains with its improving funds under management position.
The key stock that has grabbed a lot of attention lately is A2 Milk Company and the market now expects A2 Milk to be sitting in the top 100 while Vocus or Tatts Group may be out given the 3-month run-up of about 88% for A2M shares.
The 200 index is expected to see the additions of Pilbara Minerals, Wisetech Global and Lynas Corp while FlexiGroup, Japara Healthcare, Regis Healthcare or Tatts are seen as candidates that might be ousted. Amcor is also expected to take a position in the top 20 while Cochlear can move in top 50 replacing Incitec Pivot. Further, the Tabcorp and Tatts merger development is closely watched that can also bring changes with respect to the rebalance.
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