Change in the Constituents of Nifty Inde x; Dabur India Ltd getting replaced by NTPC w.e.f. September 24, 2007
Sr Index Excluded Included
(1) S&P CNX Nifty Index Dabur India Ltd NTPC Ltd.
(2) CNX 100 Index Dabur India Ltd NTPC Ltd
(3) CNX IT Index Mastek Ltd. MindTree Consulting Ltd
As a regular activity of reshuffling of index constituents Dabur India Ltd will be replaced by NTPC w.e.f. September 24, 2007. Going back to history whenever Nifty index constituents have been reshuffled significant action has been witnessed in the excluded and included counter.
This time the included stock is NTPC having market Cap of INR 1,358bn which is nearly15x against the excluded stock Dabur having market Cap of INR 88bn. As a result of this reshuffle the long only funds on the Nifty Index will start adjusting their portfolio by buying NTPC on one hand and selling Dabur on the other. The other stock weight s will also get adjusted as NTPC will gain the 4th highest weight (nearly 5.75%). Slight changes are expected in the other index constituents (the attached excel shows the adjusted weights of nifty constituents)
The buying pressure in NTPC will be significantly higher as compared to the selling pressure in Dabur.
Recommended Strategy:
Buy NTPC and hedge against market risk by selling Nifty Futures on a money natural basis.
Sr Index Excluded Included
(1) S&P CNX Nifty Index Dabur India Ltd NTPC Ltd.
(2) CNX 100 Index Dabur India Ltd NTPC Ltd
(3) CNX IT Index Mastek Ltd. MindTree Consulting Ltd
As a regular activity of reshuffling of index constituents Dabur India Ltd will be replaced by NTPC w.e.f. September 24, 2007. Going back to history whenever Nifty index constituents have been reshuffled significant action has been witnessed in the excluded and included counter.
This time the included stock is NTPC having market Cap of INR 1,358bn which is nearly15x against the excluded stock Dabur having market Cap of INR 88bn. As a result of this reshuffle the long only funds on the Nifty Index will start adjusting their portfolio by buying NTPC on one hand and selling Dabur on the other. The other stock weight s will also get adjusted as NTPC will gain the 4th highest weight (nearly 5.75%). Slight changes are expected in the other index constituents (the attached excel shows the adjusted weights of nifty constituents)
The buying pressure in NTPC will be significantly higher as compared to the selling pressure in Dabur.
Recommended Strategy:
Buy NTPC and hedge against market risk by selling Nifty Futures on a money natural basis.
No comments:
Post a Comment