Trading of Toshiba stock balloons after capital increase
Passive traders grab shares after MSCI modifies index formula
TOKYO -- Turnover in Toshiba nearly tripled Thursday after the company's private placement of new shares spurred U.S. index compiler MSCI to more heavily weight the stock.
The Japanese conglomerate said Tuesday that it had carried out the 600 billion yen ($5.32 billion) transaction. On Thursday, Toshiba shares were provisionally given more weight in MSCI indexes to reflect the capital infusion.
Passive funds that track MSCI indexes appear to have added to their Toshiba allocations accordingly. Toshiba's trading volume shot up 160% to 258 million shares Thursday on the Tokyo Stock Exchange, with the stock closing 2.8% higher at 295 yen.
Japan's Rating and Investment Information upgraded the group's credit rating one notch to B+ from B, giving investors a reason to purchase. Toshiba is now trading at a 12% premium to the price of the newly issued shares.