I've done some research on the ASX 200 eligibility rules, here's what I found:
1. How are ASX 200 companies selected?Constituents are selected by a committee from Standard & Poor’s (S&P) and the Australian Securities Exchange (ASX).All companies listed on the Australian Securities Exchange (ASX) are ranked by market capitalisation. Exchange traded funds (ETFs) and Listed Investment Companies (LICs) are ignored. The top 200 ASX stocks that meet minimum volume and investment benchmarks then become eligible for inclusion in the index.
I found these companies that have bigger MC currently than LKE, but are ETFs or managed funds, and don't seem to be eligible for the ASX 200:
VAS, MGOC, IVV, VGS, STW, IOZ, VTS, QUAL, GOLD, IOO, NDQ, VAP, VHY, A200, MGF, VEU, ETHI, HYGG, HBRD, AAA, IAF, VGAD, VDHG, MVW, RCAP
All together 25 companies.
2. There's a buffer for deletion from ASX 200, only 221st or lower float adjusted MC, but the Index Committee has complete discretion to bypass these rules:
3. Other eligibility rules are:
Market capitalization:
A stock's weight in the index is determined by the float-adjusted market capitalization of the stock. This is a function of current index shares, the latest available stock price and the Investable weight factor (IWF). The IWF represents the float-adjusted portion of a stock's equity capital. Therefore, any strategic holdings that are classified as either corporate, private or government holdings reduce the IWF which, in turn, results in a reduction in the float-adjusted market capital. Shares owned by founders, directors of the company, trusts, venture capitalists and other companies are also excluded. These are also deemed strategic holders, and are considered long-term holders of a stock's equity. Any strategic shareholdings that are greater than 5% of total issued shares are excluded from the relevant float.
Liquidity:
The trading volume in terms of dollar value and the number of transactions must exceed at least 0.025% of the sum of all eligible securities' trading volume. To ensure that no single company dominates trading, they are capped at a maximum of 15% for value, volume and transactions.
Listing:
Only stocks listed on the Australian Stock Exchange will be considered for inclusion in any of the S&P/ASX indices.
4. Summary:
Currently LKE is nr. 271th by MC on the ASX.
Considering that there are 25 companies with bigger MC than that of LKE, that are not eligible for inclusion in ASX 200, LKE's position for ASX 200 inclusion is 246th.
LKE should be 221st or lower for consideration for deletion.
The way that the Index Committee calculates the MC is complex (IWF), and I couldn't find a list of up-to-date IWF adjusted MCs, so the position of the IWF adjusted companies can differ from what the simple MC based list shows.
At the end of the day, the Index Committee seems to have complete discretion to bypass these rules.
My estimate is that LKE should have about $1.09 SP to stay in the ASX 200, during the time of data observation period, but the SP of all companies are moving, so that's a moving target, and because all the above things I listed, this is really just a best guess.
All imho, dyor, etc, etc.
(20min delay)