Severstal, Level 3 picked to join MSCI's stock index

Shares of Russian-traded OAO Severstal and Level 3 Communica-tions Inc of the US were among 10 companies picked to join MSCI Barra's global stock indexes this month.

Taiwan's Innolux Display Corp (群創光電) and Morocco's Douja Promotion Groupe Addoha SA were also chosen for its Morgan Stanley Capital International stock indexes, the index provider said today in a statement announcing the quarterly review of its benchmarks.

TCL Multimedia Technology Holdings Ltd (TCL多媒體控股) of Hong Kong and Thailand's Sino Thai Engineering & Construction Pcl will be dropped from MSCI Barra's indexes, which have more than US$3 trillion in funds benchmarked against them.

The changes, which will take effect after the close of trading on Feb. 28, may affect a company's share price as managers whose funds track the measures adjust their holdings.

Companies picked by MSCI Barra will be added to their respective MSCI country indexes, as well as regional and global indexes based on their market classification.

Severstal, Russia's biggest steelmaker, is the largest company by market value that MSCI is adding, at US$12.5 billion.

Russian billionaire Alexei Mordashov said last month that his steelmaker, Severstal, is seeking acquisitions around the world.

Level 3 shares almost doubled last year, surging 95 percent to US$5.60. The company is a long-distance phone and data-network operator.

Innolux is a maker of liquid-crystal displays controlled by Hon Hai Precision Industry Co (鴻海精密). Shares of Innolux surged by 7 percent daily limit to close at NT$82.6 in Taipei.

Douja Promotion Groupe Addoha is a developer of low-cost housing.

Hong Kong's Shui On Land Ltd and Taiwan's Powerchip Semiconductor Corp (力晶半導體) will join MSCI indexes. So will Fording Canadian Coal Trust and Lundin Mining Corp, which both trade in Canada. Brazil's Net Servicos de Comunicacao SA will also gain membership.

Shares of TCL Multimedia, which are being removed from MSCI indexes, have dropped three consecutive years. Sino Thai Engineering tumbled 62 percent last year.

Shares of OAO Polyus, Russia's largest gold producer, that are traded on the Moscow Interbank Currency Exchange will replace their shares listed on the Russian Trading Exchange.

MSCI Barra makes decisions on membership and weightings based on a company's market value, the average number of shares traded and the free float, or the percentage of shares available to investors. It also takes into account the representation of a company's industry group and country in the indexes.