Sep. 1--Two area banking companies could see additional demand for their shares as Standard & Poor's rebalances its popular stock indexes later this month, an industry analyst said.

Melissa Roberts, a senior vice president at Keefe Bruyette & Woods, listed Commerce Bancshares Inc. and UMB Financial Corp. among 17 financial stocks that could benefit.

S&P routinely adjusts the number of each company's shares in the S&P indexes to account for changes in the number of shares outstanding.

Large changes, from a merger or significant stock buyback, happen right away.

This rebalancing involves smaller amounts that accumulate. It should boost the number of Commerce shares in the S&P MidCap index and UMB shares in the S&P SmallCap index.

And that means mutual funds tracking those indexes will need more shares, too.

Commerce recently issued new shares when it raised $100 million through a "trickle out" stock offering. Roberts estimated that index funds will need to buy 146,000 shares of Commerce, or about a third of a day's trading volume.

Index funds will need to buy 161,000 shares of UMB, or nearly a typical day's trading volume, Roberts said, because of an increase in the number of UMB shares available to trade freely or float. Float excludes shares tied up by employee stock plans or insiders' holdings.

Roberts said to expect funds to add their shares at the last minute. Specifically, that means Sept. 18 for his rebalancing, which takes effect Sept. 19.

She said that if fund managers buy extra shares too soon, their funds' returns start to err from the index's movement.

Commerce closed Monday at $36.73, down 74 cents. UMB closed at $40.03, down 11 cents.

-----

To see more of The Kansas City Star, or to subscribe to the newspaper, go to http://www.kansascity.com.

Copyright (c) 2009, The Kansas City Star, Mo.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

MHP, CBSH, UMBF,

A service of YellowBrix, Inc.