Thursday, January 04, 2007

Standard & Poor's will add 12th REIT to S&P 500 Index

Today, S&P announced they would remove Symbol Technologies (SBL) from the S&P 500 Index at the close of trading on January 9, 2006 and replace the company with AvalonBay Communities Inc. (AVB). AvalonBay will be the 12th REIT in the S&P 500 Index.
  • Banc of America securities analyst Ross Nussbaum states index funds will need to purchase 4.5 million to 5.0 million shares of AVB, about 6.5% of the company's outstanding shares, or approximately 16 to 17 days worth of average trading volume of AVB.
  • Citigroup estimates adding AVB to the index will increase the REIT sector weighting to 1.2%.
(click on chart for larger image)

Given the strong price increase in REITs over the last few years, how much higher can REITs advance given their current valuations?

Twelfth REIT tapped to join the S&P 500 Index
John Spence
January 4, 2007, 11:53 am

No comments :