TORONTO - Standard & Poor's says five companies - Canwest Global Communications Corp. (TSX:CGS), Centerra Gold Inc. (TSX:CG) and three other mining companies - will no longer be included in the main Toronto Stock Exchange index.
Two other firms join the S&P/TSX composite CP Bankers Petroleum Ltd. (TSX:BNK) and New Gold Inc. (TSX:NGD).
Standard & Poor's takes pains to make it difficult to know exactly how it decides which stocks are included or excluded on the indexes it maintains for Canada's largest stock market.
Factors that contribute to the decision include the total value of the company, its relative weight compared with other companies and trading volume.
The S&P/TSX composite idex usually tracks between 200 and 300 shares - a small fraction of the total number of shares and units listed on the exchange - but it is considered a good measure of the overall Toronto market.
Being off the S&P/TSX composite index or any of the TSX subindexes doesn't stop a stock from being traded, but being bumped off or added on could have an impact on the shares' values.
Apart from losing status and attention in the investment community, excluded shares may be sold off - and included shares bought - by mutual funds, ETFs and pension funds that attempt to mirror the index.
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