sino strategic, page-4

re: sino strategic s&p 300 This is how I see it,

Firstly it is not automatic, it is up to S&P.
To qualify there are a number of things to consider, market cap
it depends on the day end price of the previous 6 months.

I note the lowest member has a market cap of $40 mill so it was more than that before the extra shares, but with the 6 month rule the extra will hurry that up.

Liquidity - Only stocks that are actively and regularly traded are considered for inclusion in any S&P/ASX index. A stock’s liquidity is measured relative to its size peers. The minimum relative liquidity for purposes of inclusion will depend upon the size of the company.

Relative liquidity = stock median liquidity / market liquidity
And again the 6 month rule applies.
Daily liquidity for each stock is the daily value traded divided by day-end market capitalisation adjusted for free float.

Market liquidity is determined using the weighted average of the stock median liquidities of the largest 500 domestic stocks. The six-months average market capitalisation used as part of the market
capitalisation criteria is used for this purpose.

So as far as the market cap goes, it started to rise in May so 6 months is pretty close,
Liquididty, that is a bit harder to work out.

It is reviewed on a monthly basis so if it is included there would be considerable upside I would think given they would have to buy.

If there is a good chance it would be included some fund managers may decide to take a position before it is included, for obvious reasons.

Now the only question is about liquidity.

By the way the lowest in the top ASX 200 is $185 Mill.

So it is easy to see how a stock can rise quickly if admitted to these indexes, they need to buy so it pushes price up, then maybe reaches ASX200 which in turn creates more buying and pushes price up.

Now I am not saying it will qualify for either, but market cap is covered, and was before, remembering the 6 month rule.

Liquididty has always been a problem and may in this case,

And will there be other listings, that maybe more important,

Any comments.