Telecom added to ASX top 50

By DANIEL RIORDAN

The Australian Stock Exchange has added Telecom to its top 50 index, putting aside liquidity concerns which have prevented such a move in the past.

Dual-listed Telecom will make up 0.72 per cent of the S&P/ASX 50 index after the ASX afforded it a weighting worth half its market capitalisation.

The changes take effect from April 2 and are certain to boost Australian and offshore investors' interest in the company as many will readjust their portfolios to reflect the new indices.

Telecom has also been added to the top 100, top 200 and top 300 indices.

There was bad news, however, for Pacific Dunlop, one of the companies dropped from the top 50 index, and Telemedia Networks, the Auckland-based company listed only on the ASX, which was dropped from the top 200 index.

The ASX's willingness to add Telecom to its indices despite the company's market liquidity in Australia failing to meet ASX requirements, is seen in some quarters as a sign of the ASX's increased desire to attract primary listings of larger New Zealand companies after the failure of its merger talks with the New Zealand Stock Exchange.

Telecom shares, which gained 32c yesterday on expectations it would join the indices, rose another 16c to close at $6.20 in early trading today.