Fiddich Review Centre

Guess which gold share is being booted out of the ASX 200

A man wearing 70s clothing and a big gold chain around his neck looks a little bit unsure.

Image source: Getty Images

The S&P/ASX 200 Index (ASX: XJO) is the most dominant index on the ASX. It tracks a basket of the 200 largest shares on our share market by market capitalisation. This means that it provides a useful benchmark covering the largest and most influential companies in Australia.

But the sizes of ASX shares change every trading day. Thus, over time, the index needs to be periodically rebalanced to ensure that it accurately reflects the state of the share market – and that the largest 200 shares are always in the index. In the ASX 200’s case, this occurs every three months.

So last week, S&P Global, the company that runs the ASX 200 Index, announced the results of its latest quarterly rebalancing. This will take effect on 19 December but, unusually, will only result in one addition and one removal from the ASX 200.

The lucky share to join the ASX 200’s prestigious club is Monadelphous Group Limited (ASX: MND). Monadelphous is an engineering company that provides industrial services across the energy and resources sectors.

But if one share is going in, it means that one share needs to get kicked out to make room. And that unlucky share is St Barbara Ltd (ASX: SBM).

Gold miner St Barbara gets the ASX 200 boot

St Barbara is (for the next fortnight) an ASX 200 gold miner. It’s not hard to see why it is in the ASX 200 firing line. This miner has had a shocking year, falling from over $1.40 at the start of the year to the 69 cents per share price tag we see today.

That leaves it with a market cap of just $563.4 million at today’s pricing, which is not enough to keep its spot in the ASX’s largest 200 shares. By comparison, St Barbara’s replacement, Monadelphous, has a market cap of $1.29 billion right now.

That said, St Barabara shares have been on a stunning run of late. Back in mid-October, the company was hitting a new 52-week low of 45 cents per share. Today, just six weeks later, it is at 69 cents per share, a gain of 53%. However, that hasn’t been enough to save St Barabara from getting the boot.

Who knows, perhaps St Barabara will be back in the ASX 200 one day. But it won’t be until 2023 at the earliest.

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