In March the regular rebalancing of ASX indices such as the flagship ASX 200 did not happen because of the confusion and intense volatility triggered by the COVID-19 pandemic.
The irony is that by March 30/April 1 the market has steadied and was starting its rusk towards the most recent peak last Tuesday of 6,198, so with the benefit of hindsight the change could have happened.
But it didn’t because the change happens around the 22nd of the last month of the quarter (as it will happen next week) and officially starts the first trading day of the new quarter.
That’s to allow investors to rebalance their holdings if they are index hugging or following funds or have other strategies involving one or more measures.
So three months on and after the big rally, the various indices will change from next week.
Gold mining stocks benefit thanks to the rise in world prices and increased volatility since February thanks to COVID-19 with several being promoted up the lists in the various indices.
Coal mining wasn’t in favour with the country’s largest locally owned miner, Whitehaven being dropped from the ASX 100.
Retailing was mixed – international shopping mall group, shopping mall owner Unibail-Rodamco-Westfield was dropped from the ASX 100 reflecting the weak retailing in Europe and the US, but The Reject Shop is back in the All Ordinaries while Kathmandu and City Chic have been added to the ASX 300.
Online furniture and homewares group, Temple & Webster is in the All Ords, as is retail Food Group which returns.
Media stocks are on the nose with Seven West Media adding to its slide by being dropped from the ASX 300. A year ago Seven lost its place in the benchmark ASX 200. Radio and outdoor advertising group, HT&E was also dropped from the ASX 300.
In the ASX 200 aged care operator Estia Health and drugmaker Mayne Pharma are among the major companies dropping out of the index from June 22 along with investment platform HUB 24, lithium miner Pilbara Minerals, lottery retailer Jumbo Interactive and fund manager Pinnacle Investment.
They have been replaced by Centuria Industrial REIT, litigation funder Omni Bridgeway and pharmaceuticals firm Mesoblast, which has been in the news for its trial of a drug to treat COVID-19 along with software services firm Megaport and gold miner Perseus will also join the list.
The additions have been among the best-performing stocks in the COVID-19 market volatility and each has recovered between 40% and 110% of their value since the market’s March 23 lows.
In the top of the range ASX 20 poker machine and gaming group, Aristocrat Leisure replaces packaging giant Amcor (it is now dual-listed in the US where a lot of international buying interest happens).
In the biggest change the troubled wealth manager, AMP drops out and is replaced by the still growing a2 Milk Company.
Mall owner Unibail-Rodamco-Westfield and coal miner Whitehaven Coal are out of the ASX 100 index, to be replaced by data centre operator NextDC and gold miner Saracen Minerals.
Embattled fintech company iSignthis has been fighting a court battle against the ASX since last December over its long-suspended shares was removed from the All Ordinaries and the ASX 300 indexes.
Cash Converters was also off the list, along with Regional Express (The Singapore controlled regional airline). But the government-controlled Air New Zealand is on the All Ords.
