This post is a follow up from my earlier post about the MSCI Singapore rebalancing (MSCI Singapore Index Rebalancing Impact on Stocks)

Quick recap: MSCI announced a rebalancing of the MSCI Singapore and MSCI Singapore Small-Cap indices resulting in the trading idea of buying the additions and shorting the deletions. In particular, I highlighted that the impact from the MSCI Singapore changes would be much larger than the Small-Cap index due to the size of funds tracking them. 

The price changes in the abovementioned stocks appear to be reflective of the initial thesis I had. This price was supported by extremely strong volume across the few stocks, way above their daily average trading volumes. Post-cutoff date, as funds finish up with their buying, there is a chance that investors who have benefitted from the price increases would take the chance to realize some profit for stocks that have been added (ie. MLT) and pick up the deletions (ie. SATS) if the sell down is too great. 

Moving forward, the dates for the next MSCI quarterly reviews have been announced. Given the continuing volatility in markets, prices will continue to fluctuate wildly and we can expect the weightings of MSCI constituents to change. Additionally, businesses that are deemed less future proof could see more outflows leading to them being dropped from the index or vice versa. A well-known example is that of Zoom, which has jumped 150% since 2nd Jan 2020 and has been added into the NASDAQ and the MSCI America.