Sappi to slip out of JSE top 40
Sappi, the world’s largest manufacturer of dissolving wood pulp, will fall out of the JSE’s top 40 index next Monday due to the listing of Prosus, the new internet subsidiary of Naspers. /
Sappi, the world ’ s largest manufacturer of dissolving wood pulp, will fall out of the JSE ’ s top 40 index next Monday due to the listing of Prosus, the new internet subsidiary of Naspers.
Naspers said on Monday 96.3% of its N ordinary shareholders chose to receive shares in Prosus, which had its stock market debut in Amsterdam last Wednesday, valuing it at about R1.9-trillion and handing Europe its biggest consumer internet company.
Prosus has a secondary listing on the JSE, while Sappi ’ s R25.1bn market capitalisation means it will slip from the index that is widely used by tracker funds.
Pick n Pay, with a market capitalisation of R31bn, will on Monday fall out of the JSE ’ s Industrial 25 index. Tiger Brands, with a market capitalisation of R42.5bn, will fall out of the JSE ’ s financial and industrial 30 index.
Wayne McCurrie of FNB Wealth & Investments on Tuesday said, while slipping out of the top 40 index was not good for the Sappi share, it would not lead to a massive sell-off.
He said being part of the top 40 index was, however, significant because a number of funds tracked it.
“Those funds will eventually sell Sappi if it is no longer part of the top 40 index but will not lead to a collapse of the share.”
“If tomorrow Sappi makes an announcement that is seen to be positive, the share price will react positively whether the company is part of the index or not,” McCurrie said.
Cratos Capital analyst Ron Klipin on Tuesday said a number of JSE indices would “rebalance ” later this week, with significant changes expected in the top 40 and the Swix 40 indices.
“So a number of shares will exit the indices, with new counters being added to the relevant index.
“The JSE looks at the free float adjusted market capitalisation and decides which shares remain and which ones exit the indices,” Klipin said.