Tuesday March 31, 2020

Highly liquid stocks get Iseq reward

The Irish Stock Exchange’s decision to switch to a free float basis of calculating its Iseq index will reward highly liquid stocks by increasing their index weighting.

17th February, 2007

However, it will be bad news for companies with significant strategic shareholders, as their index weighting will be cut to reflect the true number of shares in play.

Having a lower weighting in the Iseq index hurts demand for shares, as fund managers who are required to track movements in the index are required to buy fewer shares in an individual company if its importance in relation to the index declines.

A company with a...

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