TORONTO, Sept 1 (Reuters) - The Toronto Stock Exchange's main equity index could see as many as six companies added and three removed when Standard & Poor's conducts its next quarterly review, an analyst said on Wednesday.
The adjustments would leave the S&P/TSX composite index <.GSPTSE> with 226 listings, and would mark the fifth-straight quarter S&P has added more than it has deleted from Canada's main equity index.
The quarterly adjustments take effect on the third Friday of the month of the review -- in this case Sept. 17 -- and S&P typically makes the announcement about a week ahead of time.
The former TSE300 has been whittled down substantially since S&P set strict inclusion criteria in 2002, casting aside firms with small trading volumes and low market capitalizations in an effort to make the index more attractive to foreign investors.
But since bottoming out at around 210 names last year, S&P has added more than it has cut as rising stock prices have boosted market capitalizations and sparked higher trading volumes.
In a research note, CIBC World Markets analyst Yin Luo said Bennett Environmental Inc. , Conjuchem Inc. , and Miramar Mining Corp. could all be removed for failing to meet requirements.
Companies likely to be added are NovaGold Resources Inc. and Calfrac Well Services . Transat AT Inc., the parent company of Air Transat, and Algoma Steel are expected to return to the index after being removed in earlier reviews.
Pason Systems Inc. , an oil services company, and Western Silver Corp. are close calls that may or may not be added to the index, the analyst said.
Index standards call for the removal of companies with a relative index weighting of less than 0.025 percent, as well as those that fail to meet a formula for trading volume.
To be added, a company must have a relative weighting of at least 0.05 percent and meet the volume requirements.
Companies removed from the composite will still trade on the exchange, but will fall off the radar screens of index traders. However, removal from the index typically has little long-term effect on an issue.