Casino operator Las Vegas Sand Corp will be added to the S&P 500, one of the most commonly followed composite indexes of stock in the U.S. S&P Dow Jones, the entity compiling the index, announced last week that the Las Vegas Sands will be listed for trading prior to opening of the New York Stock Exchange last Thursday, replacing Nectar Therapeutics.
“It’s always an honour to be recognized as an industry-leading company and a successful global enterprise,” Sands spokesman Ron Reese said in a statement.
Las Vegas Sands is currently operating The Venetian Las Vegas, Palazzo Las Vegas and Sands Expo in the US, Marina Bay Sands in Singapore and five casino resorts in Macau, namely The Venetian Macao, The Parisian Macao, Sands Macao, The Plaza Macao and Sands Cotai Central.
The components of the S&P 500 are selected by a committee. The committee assesses the company’s merit using eight primary criteria: market capitalization, liquidity, domicile, public float, sector classification, financial viability, and length of time publicly traded and stock exchange. To keep the S&P 500 Index consistent over time, it is adjusted to capture corporate actions which affect market capitalization, such as additional share issuance, dividends and restructuring events such as mergers or spin-offs.
S&P 500 index
The S&P 500 is a stock market index in the US-based on the market capitalisations of 500 large companies that have common stock listed on the New York Stock Exchange or Nasdaq. It is one of the most commonly followed equity indices, and many consider it to be one of the best representations of the U.S. stock market. The average annual total return of the index, including dividends, since inception in 1926 has been 9.8%; however, there were several years where the index declined over 30%. The index posted annual increases 70% of the time. Listed companies include AT&T, Chevron Corp., Coca-Cola Co, and Proctor and Gamble. The index includes only companies listed in the US, even though this encompasses many multi-national companies. Companies in the index derive on average about 71% of their revenue in the US.
To prevent the S&P500 index from dropping over time, merely as a result of corporate financial actions; all such actions affecting the market value of the Index requiring a divisor adjustment. Also, when a company is dropped and replaced by another with a different market capitalization, the divisor needs to be adjusted in such a way that the value of the S&P 500 Index remains constant. All divisor adjustments are made after the close of trading and after the calculation of the closing value of the S&P 500 Index.