Yangzijiang Financial

When you are kick out of the STI-Index

Yangzijiang Financial (YZJF) started trading yesterday at 12pm after the formal demerger from Yangzijiang Shipbuilding Holdings Ltd.

When it started trading yesterday, YZJFH was “added” to the Straits Time Index (STI) with the same investable weight as its parent company, Yangzijiang Shipbuilding Holdings Ltd.

At yesterday closing price of SGD 0.62, it meant that YZJF market cap is SGD 2,499mm.

That meant that YZJF market cap is lower than ComfortDelgro market cap of SGD3,100mm

Since the smallest constituent in the STI on 28th April 2022 will then be removed from the index effective 5th May 2022, the news is more or less confirmed that YZJFH will be removed from the STI Index?

Active funds would have started in selling now.

Hedge fund would have started shorting now?

Passive funds (the sitting ducks) will need to start selling down once YZJFH is officially out of the index on the 5th May 2022.

Executive chairman, Ren Yuanlin said that YZJFH will be buying back shares if YZJH trades at a substantial discount to their intrinsic value.

I guess the day of seeing YZJFH below SGD 0.50 is near.

Welcome to the world of passive investing where the patient profit from the passive!

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