“Prosus, one of the world’s largest technology investors, will make its debut on the Euro STOXX 50 (STOXX50E) on September 21 as part of a reshuffle of the index, index provider STOXX announced on Tuesday. Prosus owns nearly a third of China’s Tencent (HK:0700).
Inclusion into an index can help companies bring extra investors on board. Equita analyst Gianmarco Bonacina estimates that Prosus could benefit from up to 2 billion euros ($2.4 billion) in passive fund flows through its promotion to the top 50 stocks index.”
When a new stock enters on a index, the index-funds/ETFs will buy the new entries and sell the stocks that exit the index.
Prosus could be a good bet for two reasons:
- Is entering a major index (the Europe’s leading index);
- For those investors that want exposure to Tencent, but until Trading 212 add it, Prosus is a way to get exposure to Tencent.