Tuesday, December 7, 2010

"Citigroup: Funds May be Forced to Buy Millions More Shares" (C)

We looked at this a couple times:
March 16, 2010 
"Sandler O’Neill on Citigroup: Shares Underowned by Institutions" (C)

October 6,2010 
"Institutions Snapping Up Citigroup" (C)
Here's the latest from MarketBeat:
So here’s an interesting wrinkle on news that Treasury is selling the last of its stake in Citigroup common stock.

It might mean managers of index funds are going to be forced to buy millions of shares, analysts say. “Citi will get re-weighted in various equity indices in the coming months, we estimate that index managers will need to buy roughly 486 million shares from December 2010-June 2011,” wrote Nomura banking analyst Glenn Schorr in a research note.

James Mitchell at Buckingham Research concurs. “Since the S&P is a ‘float-weighted’ index, the share sale should boost [Citigroup]’s weighting in the S&P. We estimate [Citigroup]’s weighting could exceed 110bps. Given limited ownership by large institutional investors, we would expect demand for the stock to increase,” he wrote in a research note....MORE
Also at MarketBeat:
Bank Dividend Bingo!: Chatter on Citi, BofA, Wells Fargo