Thanks for your invitation.
I think the selling of DCN shares would have been more or less completed by now by all the ETF providers. If not, then they have not done their job properly i.e. know how the ETF works and the expected removal of DCN from the ASX 300 and therefore the sale of the DCN shares well before this announcement to avoid the disorderly exit and therefore the potential huge loss of the DCN value and therefore a small value of the ASX 300 ETFs.
Just out of curiosity, lets do the maths using Vanguard VAS (ETF for ASX 300).
1) Vanguard VAS has a value of $7.25B.
2) As for 1st June 2020 ASX 300 total market capitalisation is valued as $1.8T.
3) Current DCN MC is $236m.
Proportion of DCN value in the ASX 300 is = 236m/1.8T = 0.0001311 or 0.01311%
Proportion of DCN value in VAS (out of $7.2B) is = 0.0001311 * $7.2B = $944,000 or 2.22mil DCN shares that need to be disposed in the coming 5 trading days
i.e. if they haven't done the job of disposing them well ahead in anticipation of the removal from ASX 300.Out of 2.22mil DCN shares, one would expect Vanguard to dispose about 440,000 shares per day in the coming 5 days. Is that going to be a big deal and affect DCN share price? I doubt very much given the indication that investors are buying up DCN shares lately.
Perhaps the last few days of a sudden jump in shorts are in part due to this dumping (5.4mil shorts) by Vanguard and other ETF providers in anticipation of the removal of DCN from ASX 300:
Pretty sure that there will be minimal impact to DCN SP, come Monday. One thing less to worry about.
Time to have a good night sleep if GP does not deteriorate further (not looking good at the moment though!
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