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Each day, the Australian Securities Exchange publishes the best and worst-performing stocks in the S&P/ASX 200 Index (ASX: XJO), and on Monday, the three worst performers all have one thing in common.
If you guessed it was because they went ex-dividend, you’d be close to the mark, but not quite right.
In fact, shares in salary packaging services company Smartgroup Corporation Ltd (ASX: SIQ) did go ex-dividend, meaning you’d have to have owned the shares before today to be in line to receive the 19.5 cents per share dividend on September 23.
But the same can’t be said for the other two biggest losers, auto accessories company Amotiv Ltd (ASX: AOV) and synthetic skin company Polynovo Ltd (ASX: PNV).
What all three do have in common is that they will be dropped from the ASX 200 Index effective prior to the start of trade on September 22.
This is important for the price of a stock because inclusion in the index means it must be held by exchange traded funds (ETFs) and other funds which track the index, usually in proportion to how much of the index they represent.
Being punted from an index in the regular quarterly rebalance announced by S&P Dow Jones reduces the number of institutions that must own the stock and creates new selling pressure as those institutions seek to sell the shares they do own.
All in all, nine shares will be removed from the ASX 200, and nine added in, with DroneShield Ltd (ASX: DRO), Superloop Ltd (ASX: SLC), and Greatland Resources Ltd (ASX: GGP) among those joining the index.
At the upper end of the market, Treasury Wine Estates Ltd (ASX: TWE) was removed from the ASX 50, while software company Technology One Ltd (ASX: TNE) was added. Â