Energy World Corporation to be removed from S&P /ASX200

Come March 21, 2014 , the stocks of Energy World Corporation, with symbol EWC will be removed from the S&P/ASX 200 listing due to its failure to satisfy certain requirements to maintain its listing.

This is from the ASX

The S&P/ASX 200 measures the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalization. Representative, liquid and tradable, it is widely considered Australia’s preeminent benchmark index.

Market Capitalization. The S&P/ASX indices only include securities that are
considered to be institutionally investable, and market capitalization is a key criterion for
stock selection. Stocks are included if they are large enough to meet the minimum
ranking requirements for the representative indices within the Australian market.

The market capitalization criterion for stock inclusion is based upon the daily average
market capitalization of a security over the last six months. The stock price history (last
six months), latest available shares on issue and the Investable Weight Factor (IWF) are
the relevant variables for the calculation. The IWF is a variable that is primarily used to
determine the available float of a security for ASX listed securities.

So why is EWC being removed from the  preeminent stock listing in his latest Re-balancing exercise and what should the Jamaican authorities make of this.

Market Capitalization & Liquidity are the main concerns of the ASX .

Total shares of EWC  1,734,166,672

Latest stock price  AUS$0.285

Market Capitalization = stock price x # of shares

=  $0.285 x 1,734,166,672

=  AUS$494,237,501   or US$444,813,731

Cost of the Jamaican project is estimated at US$734M, which is 1.65 x the market Capitalization of the company.

What does this really mean ?

It means if the entire company was to be sold today (excluding cost of future earns from oil field, power plants, other project and goodwill), the money from the sale could not pay for the Jamaican project.

NB:  Market capitalization is not the same as the actual worth of the company  or its total assets as stated in its balance sheet. What it means is, this is the value the “market” places on the company at this point in time. Market capitalisation changes with market conditions and stock price and so a yr from now and with a stock price of say $1 per share,  the market cap could easily be $1.734b. ( I thought it important to make that point in the interest of being fair)

With the number of financial analyst resident in Jamaica, why have none of them commented publicly on this company ?

Why is commonsenseja the only one , who keeps digging up the financial operations of this company and asking questions ?

I urge those analyst to come forward and present their picture of the organization based on its operations and its audited financial statements, is that too much to ask ?

Don’t they owe this to the Jamaican public ?

See notice from ASX on the removal of EWC from the ASX 200 listing. Go to page two when the link opens up.

EWC

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2 Responses

  1. Based on this article seems the OUR is going to give the go ahead for them to be granted a license to build.
    http://jamaica-gleaner.com/latest/article.php?id=51742

    • I am still not convinced that this company can deliver, what they have promised to deliver. I want to know if the OUR will explain to the public the “new” scope of the project

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