Probleme bei der Darstellung von ARIVA.DE?
By Ivor Ries
The triumph of new-economy over old-economy stocks
that caught most of the country`s top fund managers by
surprise in 1999 becomes official next week when the
Australian Stock Exchange rejigs its major indices.
In a move that should be headed, ´´Out with the old, in with
the new´´, the new ASX indices promote a raft of
new-tech companies into the elite and relegate a number
of old-tech clunkers to the dustbin of index history.
Companies that are the major beneficiaries of the index
tinkering include the soon-to-merge Solution 6 and Sausage
Software, MYOB, Davnet, Keycorp, Melbourne IT, Open
Telecommunications and Secure Network Solutions.
If most of those companies mean nothing to you, you`re in
good company. Many of the companies being promoted to
the new ASX100 and ASX200 indices - likely to replace
the All Ordinaries Index as benchmarks of institutional
performance - are not household names.
Indeed, some of them, despite billion-dollar capitalisations,
are yet to reach their third birthdays and it will be quite a
few years before they pay a dividend.
The ASX`s index changes, because they create winners
and losers, have sparked controversy.
Those complaining the most are fund managers with
portfolios stuffed full of old-economy stocks and chief
executives of the same companies. Faced with a falling
share price as a result of exclusion from the new
benchmarks, some companies have become vulnerable to
takeover.
Perhaps the most important change in the ASX indices is
the creation of two new ASX100 and ASX200 indices - to
be jointly designed by US ratings agency Standard&Poor`s
- that will edge out the old All Ordinaries Index as the
market bellweathers.
The ASX move to push the All Ords into retirement
(perhaps for a later burial, after a proper interval?)
represents a triumph of big institutional power over popular
sentiment.
Big institutions don`t like small stocks. They want to invest
only in the top 100 stocks, which make up 80-90 per cent
of market capitalisation, but they`ll invest in the top 200 if
they are in a mood to go slumming. Most big funds have
no more than 60-70 stocks at any one time. Having to
keep tabs on 250 stocks is just too tiresome.
For this reason, the institutions want to be judged against
the new ASX100 and ASX200 indices, not the old
´´everyone gets a feed´´ All Ords. To speed its demise, the
All Ords has been loaded up with another 250 small-cap
stocks, which means it essentially becomes the ASX500.
It`s not just tiddlywinks companies that get the short straw
from the big index shakeout. Relatively well-known names
- Central Equity, Freedom Furniture, Harris Scarfe,
Spotless Services and Arthur Yates - all miss a mention in
the new bellweather indices. Hopefully such companies
have loyal small shareholders: most major institutions won`t
be bothering them from now on.
While the big institutions have had the victory they were
always going to have, the new index regime won`t be
without its challenges.
The inclusion of so many new-economy stocks on
stratospheric multiples - and media, telecommunications,
internet and technology stocks will be 35 to 38 per cent of
the ASX100 - will have old-style, number-crunching fund
analysts craving a Bex and a good lie down.
The massive weight of new-economy stocks in the new
bellweather index means that a whole new raft of
valuation skills will be required. Unfortunately, Australian
funds are chronically short of the analytical firepower
needed to tell a new-economy sheep from and
old-economy goat in drag.
The next big market shake-out will thus be ruinous for
several of the country`s top-20 equity managers: they`ll be
stuck with a book full of worthless goats.
While having to choose from 100 rather than 250-plus
stocks means much less analytical grunt work for the big
end of town, in this country`s small-capital pond, it may
also mean greater volatility and more risk. The full
consequences of the great index reshuffle will take some
time to emerge.
© This material is subject to copyright and any
unauthorised use, copying or mirroring is prohibited.
The triumph of new-economy over old-economy stocks
that caught most of the country`s top fund managers by
surprise in 1999 becomes official next week when the
Australian Stock Exchange rejigs its major indices.
In a move that should be headed, ´´Out with the old, in with
the new´´, the new ASX indices promote a raft of
new-tech companies into the elite and relegate a number
of old-tech clunkers to the dustbin of index history.
Companies that are the major beneficiaries of the index
tinkering include the soon-to-merge Solution 6 and Sausage
Software, MYOB, Davnet, Keycorp, Melbourne IT, Open
Telecommunications and Secure Network Solutions.
If most of those companies mean nothing to you, you`re in
good company. Many of the companies being promoted to
the new ASX100 and ASX200 indices - likely to replace
the All Ordinaries Index as benchmarks of institutional
performance - are not household names.
Indeed, some of them, despite billion-dollar capitalisations,
are yet to reach their third birthdays and it will be quite a
few years before they pay a dividend.
The ASX`s index changes, because they create winners
and losers, have sparked controversy.
Those complaining the most are fund managers with
portfolios stuffed full of old-economy stocks and chief
executives of the same companies. Faced with a falling
share price as a result of exclusion from the new
benchmarks, some companies have become vulnerable to
takeover.
Perhaps the most important change in the ASX indices is
the creation of two new ASX100 and ASX200 indices - to
be jointly designed by US ratings agency Standard&Poor`s
- that will edge out the old All Ordinaries Index as the
market bellweathers.
The ASX move to push the All Ords into retirement
(perhaps for a later burial, after a proper interval?)
represents a triumph of big institutional power over popular
sentiment.
Big institutions don`t like small stocks. They want to invest
only in the top 100 stocks, which make up 80-90 per cent
of market capitalisation, but they`ll invest in the top 200 if
they are in a mood to go slumming. Most big funds have
no more than 60-70 stocks at any one time. Having to
keep tabs on 250 stocks is just too tiresome.
For this reason, the institutions want to be judged against
the new ASX100 and ASX200 indices, not the old
´´everyone gets a feed´´ All Ords. To speed its demise, the
All Ords has been loaded up with another 250 small-cap
stocks, which means it essentially becomes the ASX500.
It`s not just tiddlywinks companies that get the short straw
from the big index shakeout. Relatively well-known names
- Central Equity, Freedom Furniture, Harris Scarfe,
Spotless Services and Arthur Yates - all miss a mention in
the new bellweather indices. Hopefully such companies
have loyal small shareholders: most major institutions won`t
be bothering them from now on.
While the big institutions have had the victory they were
always going to have, the new index regime won`t be
without its challenges.
The inclusion of so many new-economy stocks on
stratospheric multiples - and media, telecommunications,
internet and technology stocks will be 35 to 38 per cent of
the ASX100 - will have old-style, number-crunching fund
analysts craving a Bex and a good lie down.
The massive weight of new-economy stocks in the new
bellweather index means that a whole new raft of
valuation skills will be required. Unfortunately, Australian
funds are chronically short of the analytical firepower
needed to tell a new-economy sheep from and
old-economy goat in drag.
The next big market shake-out will thus be ruinous for
several of the country`s top-20 equity managers: they`ll be
stuck with a book full of worthless goats.
While having to choose from 100 rather than 250-plus
stocks means much less analytical grunt work for the big
end of town, in this country`s small-capital pond, it may
also mean greater volatility and more risk. The full
consequences of the great index reshuffle will take some
time to emerge.
© This material is subject to copyright and any
unauthorised use, copying or mirroring is prohibited.
