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I didn't say S&P was *winning* the competitive battle of
benchmarking... ]8}
Regards
DanG
Gary Funck wrote:
>
> > -----Original Message-----
> > From: Daniel Goncharoff [mailto:thegonch@xxxxxxxxxx]
> > Sent: Sunday, July 14, 2002 12:35 PM
> > To: realtraders@xxxxxxxxxxxxxxx
> > Subject: Re: [RT] S&P 500
> >
> >
> > In this case, I believe you are wrong. The change was specifically made
> > to better reflect the markets, by making the S&P 500 more of a US index.
> > The benchmarking of equity indices for institutions, hedge funds, money
> > managers, etc. is big business for S&P, DJ and MS. The stocks removed
> > from the index are important components of other geographic segments,
> > and were an issue for index traders and investors.
> >
>
> It might've been a little more international-friendly if this rebalancing was
> done back in the bullish 1998-99 days of the market:
>
> http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020710/bs_nm/markets_sp_eur
> ope_dc_1
>
> [...]
> S&P said it took the seven out because it had long wanted to make the index a
> purely U.S. one, now that it had a well established stable of international
> indices.
>
> It said it also wanted to avoid double counting of the seven foreign companies
> in its other global indexes and to reweight the index that had become
> overweight on energy and underweight in financial stocks.
>
> But European fund managers were angry at the speed with which the adjustment
> would be made. Some also said it smacked of protectionism. "I do understand the
> reasoning of creating a 100 percent U.S. index, but we are sort of mad that
> there are only 10 days left before the actual rebalancing," said Gert-Jan Geels
> at Eureffect Asset Management.
>
> At least seven percent of Royal Dutch's shares and 10 percent of Unilever's
> will now come on the market, he said. "It is absurd to just out of the blue
> announce something like this."
>
> The move helped lop 3.5 percent off Amsterdam's blue chip AEX index, where
> Royal Dutch and Unilever have a combined weighting of more than 20 percent.
>
> "It's a pathetic move. it's political," said one.
>
> "It's a cheap trick to boost U.S. exchanges. They are killing these two shares
> and the entire AEX index today.
>
> "This smacks of the protectionist steel import tariffs they (the United States)
> imposed this year," said another fund manager. "It leaves a bitter taste." In
> London, the Dutch groups' UK associated stocks Shell and Unilever Plc fell
> about four percent each.
>
> Royal Dutch is the 12th largest stock by market value in the S&P 500 and joined
> the index when it was first inaugurated in 1957. Unilever followed in 1961.
>
> Barrick Gold was the last foreign stock to joint the index in 1993, after which
> the criteria were changed to exclude non-U.S. companies.
>
>
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>
>
>
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