On May 14, 2024, late in the evening, the restructuring of the MSCI indices for the quarterly review is expected to be announced. The potential changes will be implemented on June 3, 2024, with investors taking their positions a day in advance. A company's entry/exit to the MSCI benchmark index results in massive inflows/exits from foreign investors following the index, unlike entry/exit to the MSCI Small Cap Index, where nothing fundamentally changes for the stock.
It is no coincidence that on these 4 days (4 quarterly reviews) of the year, AA's turnover is usually the highest of the year! It is noteworthy that the date taken into account for capitalization is one of the last 10 business days of April for the May quarterly review, i.e. from 18 to 30 April 2024. The stocks participating in the MSCI benchmark index are now 10, with the largest weight given to the National Bank by 16.3%, and the smallest for motor oils at 5.3%, as shown in the table.
MSCI index reviews are now quarterly, and the indexes are being completely restructured, as was the old semi-annual. According to MSCI data, in February 2024, the range of total market capitalization that a company must include in the benchmark index (for emerging markets) was between $2.42 billion and $5.56 billion, while in November 2023 the corresponding market capitalization range was $2.18 billion to 5.01. Billion dollar.
Therefore, it is clear that the current revision barrier will be higher, because since January 18, 2024, when the above-mentioned threshold was announced, the markets have been higher.
More specifically, the MSCI World Index rose by 5%, raising the limit more or less by a corresponding percentage.
At the same time, the capitalization that does not belong to major shareholders (free shares) must exceed 50% of the above-mentioned limits to enter the index (this criterion does not apply to existing companies in the index, but only to new companies). entries). That is, the maximum weighted capitalization of the last review was about $1.21 billion, which makes it very difficult for stocks like ELPE, AIA and Titan.
Interest is now focused on the ELPE share, as it may cover the total capitalization limit, but is far from the weighted capitalization limit. However, if ELPE shareholders, according to press reports, make about 20% of the shares they own available to the investing public, the stock will marginally meet the conditions and could be included in the benchmark MSCI Greece Index.
In particular, the weighted capitalization will reach €1.3 billion, enabling it to be included in the benchmark MSCI Greece Index. Whether this will be done at the disposal of the price or at regular review is of little importance.
Looking to the future, A.A. He sees the upgrade to advanced level coming in 2025. The column's opinion is clear: second place in a city is better than first place in a small village called emerging markets!
Therefore, identifying 5 companies needed by the Greek market, where the rest of the quantitative criteria are covered, as shown in the table, is not difficult at all. Yes, obviously no one knows where the markets will be in a year, but I think the 5 markets where Mytilenos is marginally distant and Piraeus Bank follows a short distance away would not be a problem meeting this particular criterion.
Finally, in the current review, we do not expect any additions/deletions from the benchmark MSCI Greece Index.
For five years, Forlis underperformed against the GTT
Fourlis reported financial results for the fourth quarter of 2023, which were generally slightly above market estimates. Dr.. Would suggest a regular GS. Distributing a dividend of 0.12 euros per share, with the deadline being June 26, 2024, while the dividend yield reaches 2.8%.
Net debt (loans – cash) amounted to €282 million as of 12/31/2023, and the acquisition of Smart Park at the end of the year contributed to this. In fact, the share of net lending corresponding to individuals affiliated with the Group does not exceed 85 million euros at the end of 2023, while the remaining amount of 197 million euros is used by the Real Estate Department. Trade Estates increased its net asset value by 41%, to close to €298.4 million.
Looking ahead, management said in the ETH presentation that 2024 sales are estimated at €600 million, a 12% growth, while sales in 2027 are expected to approach €750 million. However, what concerns us most is profitability, as management estimates an operating margin of 8% in 2027, versus 4% in 2023! Look at a stock that has systematically underperformed for at least the past five years!
A strong start to the first quarter financial results in the United States
Overall, 6% of S&P 500 companies released their first-quarter 2024 financial results, of which 83% beat market EPS estimates, 3% were in line with estimates, and the remaining 13% were worse than market estimates.
The percentage of companies beating EPS estimates is above the 1-year average (78%), above the 5-year average (77%), and above the 10-year average (74%).
It is understood that the historical averages reflect actual results from all 500 companies, and not actual results from the 6% of companies reporting results at this time.
At the sector level, the Financials and Technology sectors have the absolute number, meaning that 100% of the companies that posted were above estimates, while the Consumer Goods and Industrials sectors were at 2/3 above expectations.
In conclusion, we have mentioned in the past that it is common for analysts to be more conservative in their estimates and in the end companies show results that are above estimates. However, the above measurements only relate to earnings per share, which only explains a partial truth. A typical example is the financial sector, where while all companies announcing through April 12 were above estimates, all stocks with the announcement fell significantly due to the quality of the results. Finally, the negative climate may have increased the pressures, without being a cause of decline.
Agenda (23 – 28/4/2024)
Handles the first quarter financial results announcements
Tuesday Sarantis holds an ordinary general meeting, while Alpha Trust Partitions announces financial results for the fourth quarter/12 months of 2023.
Wednesday Sarantis and Alpha Trust – Andromeda AEEX is expected to announce financial results for the first quarter of 2024, CNL Capital EKES-IDOE and Loulis Food to publish financial results for the fourth quarter/12 months of 2023, while the 6-month EGED auction will be held.
Thursday Mytileneos is expected to announce financial results for Q1 2024, EYDAP, Safe Bulkers Partitions, Space Hellas and Alpha Real Estate Services to announce financial results for Q4/12 months 2024, while OPAP and Athens International Airport hold regular meetings c.
Industry Logismos, Intertech and Mermeren Kombinat AD Prilep announce financial results for the fourth quarter / 12 months of 2023, while I. Kloukinas – I. Lappas held an extraordinary general meeting. On the same day, the Bank of Greece announced bank financing and deposits for March.
Interest is focused on inflation (Friday) and GDP (Thursday), amid economic results
Tuesday Germany and the Eurozone manufacturing PMI are released in the morning, while the manufacturing PMI and corresponding services PMI are published in the afternoon before March new home sales. Financial results are published by Freeport-McMoRan, Halliburton, PepsiCo, Philip Morris, Tesla, Visa (Dow Jones – MtK).
Wednesday In the morning, a business climate index will be released based on April data from the Ifo Institute, while in the early afternoon, the focus is on consumer durable goods orders for March. Boeing (Dow Jones), AT&T, Meta Platforms (MtK) and IBM (Dow Jones – MtK) ranked by financial results.
Thursday The first figures for the change in US GDP in the first quarter were announced, while financial results were published by Bristol-Myers Squibb, Dow (Dow Jones), Honeywell (Dow Jones), Merck & Co. (Dow Jones) and Intel (Dow Jones – MtK).
Industry In the early hours of the morning, the Bank of Japan's decision on interest rates on the yen is announced, while all eyes turn to 3:30 p.m., when the PCE inflation index (the change in prices of personal consumer goods) is published, which the Reserve Bank takes Federal in mind. Calculating the path of interest rates on the dollar. Financial results were announced by AbbVie, Chevron (Dow Jones) and Colgate-Palmolive. Finally, the week concludes with the announcement of short- and long-term consumer and inflationary expectations based on April data.
* Demosthenes Tringas is a certified stock and market analyst at Beta Exchange – [email protected]
** Copied from Kivalio newspaper
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