sandp index

New names to join TSX composite index: UBS
DAVID PARKINSON

7 March 2007
The Globe and Mail (Breaking News)

The ranks of the S&P/TSX composite index should grow by at least seven members this month when the index's keeper, Standard & Poor's, conducts its quarterly review of the Canadian benchmark, according to research conducted by UBS Securities Canada Inc.

Analyst Garry Cooper, who tracks the Canadian indexes for UBS, has crunched the numbers and determined that seven stocks look likely to be added to the index around mid-month, while two others are possible additions but may not meet minimum liquidity criteria. Meanwhile, he believes that no stocks are at risk of being removed from the index.

The likely new additions include four junior mining companies: Anvil Mining Ltd., Dynatec Corp., Eastern Platinum Ltd. and Fronteer Development Group Inc. Oil and gas junior Addax Petroleum Corp., commercial property owner/operator Cominar Real Estate Investment Trust and investment firm Pinetree Capital Ltd. are the others in line to join the index.

The analysts expect S&P will announce its official changes within the next week, with the changes becoming effective after market close on March 16.

To be added to the S&P/TSX composite index, a stock must have a market capitalization equal to at least 0.05 per cent of the total market cap of the index. It also must have an average three-month trading price of more than $1 and must meet a series of liquidity criteria, including a minimum average trading volume of at least 0.025 per cent of the overall index average.

Getting added to the index is typically a boon to a stock's value, as it exposes the stock to buying from index-linked investment funds and institutional fund managers, many of whom are required to only buy stocks that are part of a major index.

Source: Globe and Mail Update