LRS General Discussion, page-13745

When a stock is added to the MSCI Global Small Cap Index, it can have an impact on its price, but the effect may not be uniform or immediate. Here are a few factors to consider:

1. Increased visibility: Inclusion in an index like the MSCI Global Small Cap Index can lead to increased visibility and awareness among investors. This heightened attention may attract more buying interest, potentially leading to an increase in demand for the stock, which could drive up its price.
2. Passive fund buying: Index funds and ETFs that track the MSCI Global Small Cap Index will need to buy the stocks that are part of the index. When a stock is added to the index, these funds will typically purchase shares of that stock, which can put upward pressure on its price.
3. Company fundamentals: Ultimately, a stock's price is influenced by its underlying fundamentals, such as earnings, revenue, and growth prospects. While inclusion in an index can influence short-term price movements, the long-term trajectory of a stock's price will depend on these fundamentals.
4. Market sentiment: Market sentiment and investor perceptions can also play a role. If investors perceive the addition to the index as a positive signal for the company, it may lead to more buying interest.

It's important to note that the impact of index inclusion can vary widely depending on the specific stock, market conditions, and investor sentiment. Additionally, there may be a delay between the announcement of index inclusion and the actual buying by index funds, so the price impact may not be immediate.