I'm in London and one of the topics we have been discussing among the investment banks and brokerages of the City of London was the Merrill Lynch index, up 10% intraday yestersday.
With many of the stocks mentioned in the index, which as we have discussed have questionable links to nanotechnology being up 10-20% within a day of the announcement, will we see a wave of companies scrabbling to be included? The consensus from London and Frankfurt is that there seem to be two forces at work here.
Firstly, Merrill Lynch is staking out the territory for any possible IPOs, so in that respect it is good marketing. A second and somewhat more disturbing view is that there is an element of artificial hype to this. While Merrill Lynch are saying "we have to be cautious, it's a long-term trend etc. etc." suspicions about the short term gains do linger in the pubs of the square mile.
We'll have a more in depth analysis of the business of publicly traded portfolios, how they are created, weighted, and how much use they are next week.