MARKETS SPECTATOR: News Corp exclusion

News Corporation's demerger may see all but one of its companies miss out on a spot in the coveted S&P/ASX50 Index.

News Corporation’s demerger may result in only one of Rupert Murdoch’s companies making it into the coveted S&P/ASX50 Index - the index of the biggest stocks traded on the ASX, according to Morgan Stanley.

Morgan Stanley analyst, Antony Conte values Fox at $8.77 billion making it a member of the S&P/ASX50 Index and other indices. He ascribes a market value to News Corp of between $1.19 billion and $1.26 billion.

That would rank News Corp 95th on the S&P/ASX100 Index, based on Conte’s higher valuation.

“S&P will likely decide to omit News Corp from the S&P/ASX 100 index,” Conte says.

“Exclusion from S&P/ASX 100 index would provide opportunities for small cap managers to include it in their universe.”

The bigger the market value of a company the more fund managers generally include them in their portfolios as index weightings are skewed toward the largest companies in the indexes.

News Ltd is the owner of Business Spectator.