Particle.news
Download on the App Store
5 ARTICLES
·
last mo.

Eternal Ltd Shares Drop Over 3% as Global Index Weightage Cuts Loom

The reduction in foreign ownership limit to 49.5% triggers $840 million in potential passive outflows ahead of index rebalancing by FTSE and MSCI.

Image
Image
Image
Eternal Ltd share price decline. | Image: Unsplash

Overview

  • Eternal Ltd's stock fell over 3% in early trade on May 26, driven by anticipated passive outflows from global index weightage reductions.
  • The foreign ownership limit (FOL) for the company was reduced from 100% to 49.5%, forcing FTSE Russell and MSCI to lower its investability weight.
  • FTSE Russell's changes will be implemented on May 27, while MSCI's adjustments are set for May 30, with combined outflows estimated at $840 million.
  • Despite the weightage cuts, Eternal Ltd will remain part of major indices like FTSE All-World and MSCI India, with no change to its total share count.
  • Jefferies warns of potential outflows reaching $1.3 billion if Eternal Ltd faces exclusion from MSCI indices due to further foreign ownership breaches.