Who made the cut after the ASX’s quarterly index rebalance?

S&P Dow Jones Indices has announced the quarterly rebalance of the entire S&P/ASX index hierarchy, revealing which companies have been added and removed.

This review of the ASX’s major indices – the S&P/ASX 20, 50, 100, 200, 300 and the All Ordinaries – usually takes place quarterly to reflect the changing conditions of listed companies.

However, the March rebalancing did not occur because of market volatility triggered by the COVID-19 pandemic, so today’s announcement shows more changes than normal.

Whether or not a company makes the cut is important as billions of dollars are invested in funds that track certain indices and fund managers are often limited to only buying shares of companies on a particular index.

The changes will be effective at the open of trading on 22 June 2020.

ASX 100 index

Major packaging company Amcor (ASX: AMC) has been booted out of the S&P/ASX 20 index, the ASX’s list of top 20 companies, and replaced by gambling giant Aristocrat Leisure (ASX: ALL), while dairy company The A2 Milk Company (ASX: A2M) has taken battered wealth manager AMP’s (ASX: AMP) spot on the ASX 50.

The broader top 100 list has welcomed data centre operator NextDC (ASX: NXT) and gold miner Saracen Mineral Holdings (ASX: SAR) but removed commercial property giant Unibail-Rodamco-Westfield (ASX: URW) from the index after the COVID-19 pandemic shut down retail stores across the globe.

Coal miner Whitehaven Coal (ASX: WHC) was also dropped from the ASX 100 index.

ASX 200 index

The benchmark S&P/ASX 200 index added listed property trust Centuria Industrial REIT (ASX: CIP), software network Megaport (ASX: MP1) and litigation financier Omni Bridgeway (ASX: OBL), along with gold miner Perseus Mining (ASX: PRU), which earlier this month proposed a $64 million takeover offer to West Africa-focused gold explorer Exore Resources (ASX: ERX).

Also joining the ranks is pharmaceuticals company Mesoblast (ASX: MSB), which has experienced strong revenue growth as it makes progress on a drug trial to potentially treat COVID-19 patients in respiratory distress.

Leaving the top 200 is Estia Health (ASX: EHE), Hub24 (ASX: HUB), Jumbo Interactive (ASX: JIN), Mayne Pharma Group (ASX: MYX), Pilbara Minerals (ASX: PLS) and Pinnacle Investment Management Group (ASX: PNI).

The reason six companies were dropped from the index and only five were added is because there was actually 201 stocks on the ASX 200 index after Graincorp (ASX: GNC) spun off its United Malt Group (ASX: UMG) business in March.

ASX 300 and the All Ords index

There were quite a few changes on the S&P/ASX 300 and the All Ordinaries index – the top 500 largest ASX-listed companies.

Retail companies including Kathmandu (ASX: KMD), City Chic (ASX: CCX) and The Reject Shop (ASX: TRS) have been interesting additions to the All Ords (with the first two also making the ASX 300 list) given the weak performance of retail globally as a result of the COVID-19 pandemic.

Although in line with an increase in online shopping, online furniture and homewares retailer Temple & Webster (ASX: TPW) has made the All Ords index, along with online bookie PointsBet (ASX: PBH) and Retail Food Group (ASX: RFG), which owns brands including Crust Pizza, Donut King, Gloria Jean’s and Brumby’s Bakery.

Another new entrant on the All Ords is biotech Zoono (ASX: ZNO), which has rapidly gained in popularity since the start of the pandemic as demand surged for sanitisers.

Healthcare stocks Next Science (ASX: NXS), PYC Therapeutics (ASX: PYC), and Reapp Health (ASX: RAP) and fitness company Viva Leisure (ASX: VVA) also joined the All Ords ranks, along with new tech stocks including Netlinkz (ASX: NET), Nitro Software (ASX: NTO) and Dubber (ASX: DUB).

Mining and exploration companies Alkane Resources (ASX: ALK), De Grey Mining (ASX: DEG), Emerald Resources (ASX: EMR) and Legend Mining (ASX: LEG) were added to the list, while cannabis companies Auscann (ASX: AC8) and Cann Group (ASX: CAN) were dropped.

Cash Converters (ASX: CCV) and regional airline Regional Express (ASX: REX) were scrapped from the list, although Air New Zealand (ASX: AIZ) has been added as its share price starts to recover from the coronavirus-induced plunge.

Another company cut from the index is troubled fintech company iSignthis (ASX: ISX), which has been battling the ASX in court since late 2019 over its long-suspended shares.