s&p announcement

An interesting transition phase for NCP to US base and S&P 500 inclusion. The initial phase is 100% inclusion in the US S&P 500 and 25% reduction in ASX200. A 3 month pause before another 25% reduction in the ASX200, and then another 3 months pause before another 25% and so on until 100% reduction out of the ASX200 is reach.

Does this mean demand for NCP share in the US at the start but slow sell down in Oz. The question is why not buy in OZ and re-sale in the US or US funds buying into Oz and convert into US holding.

Comments ?

Press Release
Standard & Poor’s Announces Transition Period
For News Corporation Ltd.
Sydney, Aug. 6, 2004—Standard & Poor’s, the leading provider of equity indices in Australia, announced today its decision with regard to the transitioning of News Corporation Ltd. from the S&P/ASX indices, subject to the following preconditions.
This transition is conditional upon:
• Shareholder approval for News Corporation Ltd.’s proposed change of domicile; and,
• Inclusion of News Corporation Ltd. in the S&P 500 index.
If conditions are met, News Corporation Ltd. will be transitioned from the S&P/ASX indices over a nine-month period. Throughout that time it will be exited from the S&P/ASX indices in four equal (25%) phases. The start date of the transition will be announced with a minimum of three weeks notice.
Standard & Poor’s will also calculate a parallel index throughout the nine-month transition period, providing an alternative for market participants that would prefer a shorter transition time. This parallel index will be calculated with News Corporation Ltd. being 100% excluded from the S&P/ASX indices on the day that it is included in the S&P 500 index.
“Standard & Poor’s has actively consulted the market to canvass participants' views on the most appropriate process for the transition of News Corporation Ltd. These views have been a key consideration in the S&P Australian Index Committee formulating this decision,” said Tim Eisenhauer, Head of Index Services at Standard & Poor’s. “The purpose of this announcement is to provide further clarity to the market, in particular, shareholders of News Corporation Ltd.”
Summary of News Corporation Ltd. Transition*
Phase 1: News Corporation Ltd. is included in the S&P 500 index at 100% weight. Simultaneously, News Corporation Ltd. will be down-weighted in the S&P/ASX indices by 25%, to 75% of its index weight.
(Three-month pause)
Phase 2: News Corporation Ltd. down-weighted a further 25% from the S&P/ASX indices to 50% of its index weight.
(Three-month pause)
Phase 3: News Corporation Ltd. down-weighted a further 25% from the S&P/ASX indices to 25% of its index weight.
(Three-month pause)
Phase 4 (final phase): Remaining 25% of News Corporation Ltd. removed from the S&P/ASX indices to 0% index weight.
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