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Chemist Warehouse/Sigma squeeze spicier than a Guzman y Gomez burrito

Hold on to your hats! Chemist Warehouse’s arrival on the bourse serves as a case study in the dark arts of index inclusion.

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If you thought trading in Guzman y Gomez was crazy, get ready for Chemist Warehouse. A liquidity squeeze is coming, and it’s already creating a headache for equity investors.

Chemist Warehouse, when it eventually lists via Sigma Healthcare, will slot straight into the benchmark S&P/ASX 200. Sigma’s index weighting will increase at least threefold, bringing guaranteed buying from index funds and all but guaranteed buying from the hundreds of active funds benchmarked to the ASX 200.

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Anthony Macdonald is a Chanticleer columnist. He is a former Street Talk co-editor and has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. Email Anthony at a.macdonald@afr.com
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    Original URL: https://www.afr.com/chanticleer/chemist-warehouse-sigma-squeeze-spicier-than-a-guzman-y-gomez-burrito-20241107-p5koql