Q: CTS's deletion from the TSE index was announced last week. Do index funds hold a significant quantity of cts shares that they now have to sell? Would these funds already have sold in anticipation? Is deletion likely to affect cts share prices and, if so, for how long a period?
Jack
Jack
5i Research Answer:
**edited for error.
Institutions own 28%, and likely some of that is index funds. However, with its small index weighting, weak performance and share liquidity, we would not expect a big impact to the price. Index funds cannot typically sell before the change, but other market players step up and try to front-run the move. Thus, we often see high volume but little price change.