Embattled Peugeot booted from French CAC 40 index
By Blaise Robinson
PARIS (Reuters) - PSA Peugeot Citroen (PEUP.PA: Quote) will be dropped from France's blue chip index CAC 40 .FCHI the latest in a series of setbacks for Europe's No. 2 automaker by volume.
Peugeot, a founding member of the CAC 40 when the benchmark was created a quarter century ago, will be replaced by Belgian chemicals group Solvay (SOLB.BR: Quote), NYSE Euronext said, with the changes taking effect on September 24.
The demotion from the index means the group will be dropped from the radar screens of exchange-traded funds and index trackers, translating into a fall in liquidity of the stock.
A Peugeot spokesman declined to comment.
Shares of Peugeot have been hit by the carmaker's worsening financials amid a deep sales slump in Europe. They have plummeted 43 percent so far this year, making them by far the worst performance on the CAC 40, which is up 11 percent.
"When a stock is expelled from the CAC 40, it's like a punishment. It's a signal that management has failed to maintain the level of performance of a company," said Christian Jimenez, fund manager and president of Diamant Bleu Gestion, in Paris.
Peugeot's shares have tumbled to as low as 5.70 euros in July, their lowest level since 1986, with the company's market capitalization shrinking to 2.14 billion euros ($2.7 billion).
The drop is in sharp contrast with the performance of arch-rival Renault (RENA.PA: Quote), whose shares are up 41 percent so far this year, while Europe's STOXX auto sector index has gained 20 percent. Continued...