There have been a few changes in the S&P/ASX indices today as part of their quarterly rebalance. The changes are effective after the close of trade on December 19, 2014.
Although any changes made will not influence a company's prospects in the medium-to-long terms, it can cause some volatility in the near term. This is because most fund managers are restricted to owning stocks in a certain index, and thus may be forced to make some necessary adjustments to their portfolios. In addition, some companies could receive more or less coverage in the months to come while the rebalance can also be useful as a reflection on which companies have performed well and which have not.
As part of the rebalance, Healthscope Ltd (ASX: HSO) and TPG Telecom Ltd (ASX: TPM) both found themselves promoted to the S&P/ASX 100 Index, while Arrium Ltd (ASX: ARI) and Myer Holdings Ltd (ASX: MYR) were both pushed out.
Other major additions included APN News and Media Limited (ASX: APN) and Vocus Communications Limited (ASX: VOC) into the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO); Ramsay Health Care Limited (ASX: RHC) into the S&P/ASX All Australian 50 Index, and Corporate Travel Management Ltd (ASX: CTD) into the S&P/ASX All Australian 200 index following its incredible run over the last 12 months.
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