- FYI Resources Limited (ASX:FYI) will be added to the MSCI Australia Micro Cap Index.
- The inclusion of FYI into the MSCI Global Index will increase the Company's exposure to global institutions and the investment market.
- The Company intends to position itself as a leading alumina producer amid surging demand for lithium-ion batteries in the electric vehicle market.
In a significant development, high purity alumina (HPA) producer FYI Resources Limited (ASX:FYI) has announced its inclusion into the MSCI Global Index.
The global market index provider MSCI has recently unveiled changes to its Global Micro Cap Indexes, which includes the addition of FYI. These changes to the Micro Cap Indexes will commence as of the close of 27 May 2021.
Buoyed by the crucial update, the shares of FYI surged by over 8.5 per cent to AUD 0.565 during the intra-day trade.
MSCI is a leading investment services provider that offers research, data and technology services to the global investment community. These services allow its clients to better analyse and understand the key drivers of risk and return and create an effective investment portfolio.
Recently, FYI also commenced trading on the US-based “over-the-counter” (OTC) market from 4 May 2021 as an initiative to build a strong and long-term relationship and shareholder base in North America.
Advantages of Inclusion into MSCI Global Index
As part of the changes, FYI will be added to the MSCI Australia Micro Cap Index, which has been designed to gauge the performance of ASX-listed companies in the Micro Cap segment.
The inclusion of the FYI into the MSCI Australia Micro Cap Index has several advantages for the Company, as stated below:
- It will boost the Company's exposure to global institutions and investment markets.
- FYI’s liquidity is also expected to increase with the addition.
- The Company will have increased access to capital sources after the inclusion.
Apart from all the benefits mentioned above, the inclusion will provide great research coverage as well as transparency for retail and institutional investment.
Promising Market Opportunity
FYI intends to position itself as a significant alumina producer in the wake of surging demand of the metal in the electric vehicles (powered by lithium-ion batteries) and LED markets.
Lithium-ion batteries represent the biggest potential growth sector for HPA demand over the coming decade. Currently, these batteries are used in portable electronics like mobile phones and laptops. However, their high energy density (energy contained versus weight) makes them ideal for use in the growing electric vehicle market.
As per FYI, the HPA international market is likely to expand from about 30,000tpa in 2020 to approximately 104,000tpa in 2028, primarily driven by robust growth in demand for HPA as a lithium-ion battery separator coating.
Furthermore, FYI expects LED-driven demand for 4N and 5N HPA to grow from 20ktpa in 2020 to 85kt in 2028, increasing at a CAGR of 19.8 per cent. The Company sees a robust headline demand for LED units driven by market acceptance, broad application development and replacement of inferior and less efficient alternatives.