re: Ann: Company Interview. Strong Outlook f... Below is the...

re: Ann: Company Interview. Strong Outlook f... Below is the official explanation from the S&P as to why OGC was omitted while PRU and SLR managed to stay in. I also was given further details over the phone. They only used the 6 months average of 140mill CDI’s listed on the ASX to calculate mc of OGC but that still gives a mc around $210 mill compared to $100 mill for PRU. Then they also look at the average price over 6 months so PRU, SLR and some others must have just sneaked in thanks to that average pricing rather than recent pricing. Seems like a less than perfect method to me but that’s the way it is.

“OGC is a foreign domiciled security on the ASX where its CDIs trade, and as a result we use the latest 6 month average of CDIs held in Australia when running our analysis as per our methodology (attached). Based on the latest ASX report (http://www.asx.com.au/products/foreign-entity-data.htm) OGC’s latest 6 month average of CDIs held in Australia is roughly 140 million, rather than the entire 300 million quoted on the ASX.

As a result, the market capitalisation of OGC in our analysis is less than half of the $500m you were referring to.

I trust this helps clarify the treatment, but please don’t hesitate to contact me with any further concerns.”

This does suggest PRU in particular and to a lessor extent SLR are going to need a big rise in sp to keep their ave 6 month price high enough not to get omitted next qtr.
That may result in OGC being re-included at their expense. The fundamentals for OGC are much stronger so the sp should recover when this is out of the way (all else being equal). Then if it does rally well into and post the next qtrly results it might even rally further on anticipation of re-inclusion for next qtr's rebalance?