Deutsche Bank, Credit Suisse Kicked Out Of Stoxx Europe 50 Index

Tyler Durden's picture

What do you do when you are one of the biggest indices in Europe and are unable to rise simply because two of your biggest constituents, if not so much in market cap any more but certainly in terms of systemic importance,  just can't catch a bid? Why you delete them, of course even if the two names in question happen to be Europe's two largest banks, Deutsche Bank and Credit Suisse.

Moments ago, STOXX Ltd, the operator of Deutsche Boerse Group’s index business, announced component changes in the STOXX Europe 50 Index due to the fast-exit rule. All changes become effective with the open of markets on Aug. 8, 2016.

What is the Fast Exit rule? "The rule states that a component is deleted from the Dow Jones EURO STOXX 50 or Dow Jones STOXX 50 indexes if it ranks 75 or below on the respective index's monthly selection lists for a consecutive period of two months. Deleted components for all three indexes will be replaced by the highest ranking non-components on the monthly selection list. Component changes will be announced on the first trading day of the month following the publication of the monthly selection lists, implemented on the close of the fifth trading day and effective the next trading day."

In other words, someone did not like how DB and CS were trading and decided to kick them out.

And here are the replacements.

What does this really mean from a price index standpoint? Simple: the following.

And that is how you "boost" the performance of the constituent index. It was not immediately clear if there would be any forced selling as a result of these names getting kicked out of one of Europe's 2 most important indices alongside the broader Stoxx 600 index.

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Delving Eye's picture

I'm a Credit Suisse pensioner. Should I be worried?

Jtrillian's picture

Nooooo.   Don't you read the headlines?  Everything is AWESOME! 

knukles's picture

Survivor-ship Bias!
Here we are! 

Numbers lying.  So what else is new, eh?

JRobby's picture

Laugh Track Deafening !!!!!

But the stress tests said?????????

johngaltfla's picture

CS is fine.

Everything is fine.

Got lube?

Maplehood's picture

Hear no evil, see no evil, speak no evil

peddling-fiction's picture

La la la la la la la. <covering ears>

American Psycho's picture

Sincerely all who have purchased your 10 Jan2017 puts.

Mustafa Kemal's picture

Indeed, my Oct. 2016 DB put is looking kind of interesting now.

scintillator9's picture

As was said by a wise poster on this forum long ago, at some point in the near future, every stock will be red, yet "the market" will be green.


knukles's picture

"Fast Exit Rule"
It's gonna blow!  Get the fug outtta here! 

Here.  Hold this for me, I gotta go wash my hands

peddling-fiction's picture

Run for your lives, beyond the blast zone (the world?).

Elon, can you help? <sarc>

BlindMonkey's picture

Elon is going to need some choice negative interest loans and some gov backing to help you out.

tacoman's picture

Good riddance! LOL

. . . _ _ _ . . .'s picture

Watch for their bank machines to suffer a 'glitch'.

debtor of last resort's picture

Stoxx Ltd?

Ltd, isn't that London based?

But but, Brexit?

Owee, powerfiat ain't dead yet. Gosh, the struggle.

Citizen_x's picture

Do they have pink sheets stock in Europe ?

Sudden Debt's picture

It's clear nobody seems to understand what will happen next

1. Once a stock is kicked out, funds and pension funds need to sell the stock and push the banks into faillure.

2. Once the funds and pension funds sell, they need to write down the losses.

3. Pension funds go bankrupt.

4. American banks will also crash

5. American pension funds will also default.


I hope everybody has enough gold and silver to survive the next 5 years, you'll need about 5000 ounces per person in silver or 100 ounces of gold.

Don't dream of spectacular prices because those will be inflation adjusted. Anybody with less thant that, is fucked.

If you have less, use the PM's to get out of the country to a country where the economy is sound after the implosion. Shit will be bad for about 20 years, terrible for the first 5. There's about 3 to 6 months left.

Mentaliusanything's picture

Correct and as your Avitar says ... Sudden Debt. When it happens you have to change it to Sudden Death.

saldulilem's picture

you're thnking kicked out fom the exchange (delisted), right? this is only an index

jewish_master's picture

2017 fall fracking companies bonds mature  and go bust - then it stats in ernest. the whole bond market unravel. interest rates go up on all bonds due to falling prices,

the risk is gona be priced again. central banks will be done they can say interest rate is 0% all day the market will force it.

gona be 3 years of total chaos in leverged countries - looking at u china.

will get slowly better till 2025. there are alrdy new finanacial tech in the works to replace the banks and CB.



peddling-fiction's picture

SD: Yeah, the Yuan SDR event in October may well be the rug pulling event that will get this started in earnest.

All that is needed is for TPTB to stop honoring the petrodollar, and throw the U.S. under the bus, so to speak.

They will do it to themselves, but since they have their assets somewhere else, it will be easy pickings.

The U.S. election is beyond farsical at this point. The EU is going into Marshall Law, one country at a time, for bogus reasons.

What´s next?

Buckle up, it´s gonna get roller-coaster bumpy.

buzzkillb's picture

Type 9999 into each 1oz silver coin at Apmex, add to cart, to get a sense of how much is on hand there.

Herdee's picture

Every banking person uses a big chart to show the endless rise of the stock market since the start.The chart is the biggest lie known in finance.