The S&P Dow Jones Indices has announced the various changes to the S&P/ASX indices, which will be effective on 24 December 2018.
Each index, like the S&P/ASX 200, is made up of the largest ASX businesses that fit into the index.
S&P/ASX 100 Index
The merger between TV business Nine Entertainment Co Holdings Ltd (ASX: NEC) and media business Fairfax will see Nine enter the ASX 100. The combined entity plans to be a media powerhouse, challenge News Corp (ASX: NWS) and grow Domain Holdings Australia Ltd (ASX: DHG).
The other entrant to the ASX 100 is Worleyparsons Limited (ASX: WOR), it recently raised a lot of capital for a large acquisition. The bigger business is now big enough to enter the exclusive ASX 100 group.
However, to make space for Nine and Worleyparsons, two had to be kicked out. CSR Limited (ASX: CSR) and Harvey Norman Holdings Limited (ASX: HVN). The falling housing market is seemingly having on effect on the short term futures of both of them.
Make way for Coles Group Limited (ASX: COL)
The recent Wesfarmers Ltd (ASX: WES) divestment has entered straight into the S&P/ASX 20 and S&P/ASX 50. To make space for Coles, Origin Energy Ltd (ASX: ORG) has been kicked out of the ASX 20 and Unibail-Rodamco-Westfield (ASX: URW) has been ejected from the ASX 50.
The best way for businesses to avoid being removed from an index is to make sure that profit keeps growing, which should result in the share price rising over time. The shares in the below report have a history of long term profit growth.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).