Bank of Ireland and Green Property have been given a boost with the announcement that they will be included in the Morgan Stanley Capital International (MSCI) Index next year. Jurys Doyle Hotel Group, however, is to be dropped. The index is the world's most widely used series of stock market indices and is tracked by institutional investors with funds of more than $3.5 trillion (€3.9 trillion).
The listing on the MSCI will make Bank of Ireland and Green Property stock more attractive to institutional investors and should generate extra trading in those shares as passive and active funds alter their weightings in these stocks. Other companies already included in the index are Elan, AIB, Ryanair, Iona Technologies and Smurfit.
The provisional list is a disappointment for the Irish Stock Market as stockbrokers had been expecting up to five further Irish companies to join the index with the exclusion of Jurys Doyle coming as a surprise.
The companies which had been tipped as likely new additions were IAWS, Riverdeep, Kingspan and Ryan Hotels.
"The new configuration is a great disappointment for the Irish stock market as a whole and is disappointing for the companies that were not included," Mr Colin Hunt, head of research at Goodbody Stockbrokers, said yesterday.
Goodbody had suggested a newly configured MSCI Index with five further Irish companies would attract an additional $400 million into Irish equities. Bank of Ireland would account for the bulk of those potential funds but the overall amount of new funds that will now flow into Irish stocks will be lower.
The MSCI was adjusted to take account of the free float of the companies included in its family of indices and an extension of the coverage of each market from 60 per cent to 85 per cent.
Twenty-nine UK companies were added, including Securicor, Severn Trent, Shell, Royal & Sun Alliance and Next.
Over $20 billion is expected to flow into British stocks as the index manager reforms the rules that govern its market measures to make the weighting of stocks reflect the free float of stocks available to invest in.
