Different calculation methods could see a rejig in company weightings when the new S&P/NZX equity indices are implemented in June.
According to NZX spokesperson, Kate McLaughlin, following a deal inked last month with S&P, the new co-branded indices will differ slightly from the previous versions published by the stock exchange.
“The only material methodology change is to the calculation of Free Float shares, being the number of shares considered to be available for public trading,” McLaughlin said.
“SPDJI [S&P Dow Jones Indices] excludes from the free float shares any holding over 5% considered to be held by shareholders concerned with the control of the company. While NZX has also excluded strategic shareholdings, the method of determining what is strategic is different.”
Craig Stent, Harbour Asset Management director and research analyst, said any changes to the index are likely to be at the margins.
“There may be some index changes in companies where founders still hold a significant stake – like Delegats or Xero,” Stent said. “But the changes probably won’t be material.”
While the revenue split between NZX and SPDJI for licensing the new indices remains confidential, Daphne van der Oord, SPDJI head of Australia and New Zealand, said there was “immense potential” for growing the NZ index business among local and international investors.
“To name but a few, we see there is demand for yield-driven strategies (eg. high dividend), single sector (infrastructure, property, etc.), socially responsible investing (ex-tabaco, armaments), etc,” van der Oord said. “Such demand is not necessarily limited to the domestic issuers and domestic constituents, but potentially as a blend of AUS/NZ or ASEAN, which international investors are keen to look at.”
The new NZX/S&P equity indices are due to go live on June 21 this year.