Inclusion: Why is the Imugene (ASX:IMU) share price falling today?

Graph showing a fall in share price.

Shares in biopharma company Imugene Limited (ASX: IMU) are inching lower in afternoon trade and are now changing hands at 48.8 cents apiece, down 4.41%.

Whilst there’s been no market-sensitive information from the company today, its share price has slipped more than 16% in the past month amid a sector-wide selloff in ASX healthcare shares that’s been in situ since late November.

Let’s take a closer look.  

Why is the Imugene share price falling today?

Imugene was added to the S&P/ASX 200 Index (ASX: XJO) after its quarterly rebalancing exercise last Friday.

The S&P/ASX 200 is Australia’s leading share market index that measures the performance of the top 200 ASX-listed companies by float-adjusted market capitalisation

Inclusion into the index is often a high watermark as there are several inclusion criteria a company and its share price must pass in order to qualify.

For instance, a company must be listed on the ASX and must be considered “institutionally investible”, whilst holding a minimum 3-month float adjusted market cap of $120 million.

Not only that, but many large Australian fund managers are limited to investing in ASX 200 companies, to avoid excessive volatility and risk-taking. 

Therefore, any new additions into the index have immediate buying power or selling pressure behind them as said large fund managers have to rebalance their own portfolios in accordance with these regulations.

We see this in action on Monday as order volume on Imugene’s shares was already at 74% of its 4-week average trading volume earlier in the day as prices take a dip.

Imugene share price snapshot

In the past 12 months, the Imugene share price has soared over 294% after rallying an impressive 392% this year to date.

This is well ahead of the benchmark index’s return of around 9% in that time.

The post Inclusion: Why is the Imugene (ASX:IMU) share price falling today? appeared first on The Motley Fool Australia.

Should you invest $1,000 in imugene right now?

Before you consider imugene, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and imugene wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s