*PSU stocks hit with Nifty moving to free float * **
** ** *New method of index calculation from June 26. * *Our Bureau * Mumbai, June 19 With the date of Nifty moving to a free-float market cap index nearing, stocks that will lose their weightage in the index have seen sharp falls in share prices in the past few days. The NSE had announced in March that Nifty index would be calculated using free-float market cap methodology from June 26. The stocks that will lose the weightage most following the new methodology would be NTPC, ONGC, Power Grid, SAIL and Bharti Airtel. In the last week, Power Grid, SAIL, NTPC and ONGC have lost more than 10 per cent each. Free-float market capitalisation takes into consideration only those shares issued by the company that are readily available for trading in the market. In free-float market capitalisation methodology, the level of index at any point of time reflects the free-float market value of Nifty component stocks relative to a base period. *Free float* The market capitalisation of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalisation is further multiplied by the free-float factor to determine the free-float market capitalisation. The free-float factor (investible weight factor) for each company in the index would be determined using the public shareholding of the companies. The free-float factor for each company in the index will be updated based on the shareholding pattern submitted on a quarterly basis by companies to the stock exchanges. “There has been a lot of selling by mutual funds that have index funds. These funds have to re-jig their portfolios to align it with the index weightages after June 26. The stocks whose weightage will decrease will see a dip in their share prices. While those scrips whose weightage will increase will see a rise in price,” said Ms Anita Gandhi, Head of Institutional Business at Arihant Capital Market. Stocks whose weightage will increase include Infosys, ICICI Bank, HDFC, ITC and HDFC Bank. Infosys and HDFC share prices have risen in the last week. As on Friday, NTPC’s weightage was 6.08 per cent, ONGC’s was 8.04 per cent and Power grid’s was 1.96 per cent. Reliance has the most weightage in the index with 11.96 per cent followed by ONGC and NTPC. Bharti Airtel has 5.7 per cent, Infosys 3.77 per cent, ICICI Bank 2.96 per cent and HDFC 2.43 per cent http://www.thehindubusinessline.com/2009/06/20/stories/2009062051551000.htm --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
