| Fri 29 Aug 2003, 12:29 | | Anglo may move up a notch to the Stoxx 50 |
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Anglo may move up a notch to the Stoxx 50
August 29, 2003
By Bloomberg
Frankfurt - Anglo American plc may be selected next week to join the Dow Jones Stoxx 50 index, reflecting the emergence of companies that produce raw materials as stock market leaders.
The world's biggest precious metals mining company might replace Munich Re, the world's largest reinsurance company, or UK insurer Prudential, after an annual review of the index's membership on Monday, investors and equity strategists said.
The index consists of 50 of the largest companies in the 17 western European stock markets.
"Investors are betting on an economic recovery," said Nerea Heras at Axa Investment Management in Frankfurt. "Demand for gold, copper, platinum and nickel is rising, and supply is controlled by only a handful of companies, including Anglo American."
Iberdrola, Spain's second-biggest power company, may be picked at the same time to replace HVB Group, Germany's second-biggest bank by assets, in the Euro Stoxx 50 index.
The measure tracks 50 of the biggest companies in the 12 European countries sharing the euro.
Stocks can benefit from inclusion in the indices because fund managers seeking to mirror the benchmarks' performance have to buy the shares.
About e5 billion (R40 billion) was linked to the Stoxx 50 and e70 billion tracked the Euro Stoxx 50, said Stephanie Schleidt, a spokeswoman for Stoxx in Frankfurt. Stoxx, a joint venture of Dow Jones & Co, Deutsche Boerse and SWX Swiss Exchange, compiles the indices.
Euro Stoxx 50 entrants outperformed the index in the week or two before changes took effect during three of the past four years, according to a study by Peter Allen, head of European equity derivative strategy at JP Morgan in London.
The value of a company's publicly traded stock determines eligibility for membership in the Stoxx 50 and Euro Stoxx 50.
Companies ranked among the top 40 are picked to replace the smallest members. Companies falling below 60 are removed.
This year's review will be based on market values as of today. Changes will be announced after the close of Monday's trading in Germany, which has Europe's longest trading hours, and will take effect on September 22.
Shares of Anglo American, based in London, have climbed 35 percent during the past 12 months. The company is the best performer in the Stoxx 600 basic materials index, composed of metals and forestry companies as well as mining houses.
The advance lifted Anglo American to 36th place among Europe's biggest companies, according to index researchers. The company was 42nd in Stoxx's latest official ranking, on August 1.
