TORONTO (Reuters) - Shares of Canadian train and plane maker Bombardier closed below C$1 on Wednesday for the first time since 1991,
putting the company at risk of being pushed out of major Canadian indices.
That in turn could put even more pressure on the stock, as index-based funds would be forced to sell any positions they own in Bombardier.
“Two of the six largest holders are ETF-based. I wouldn’t necessarily be surprised if they have already started legging out of the position,” said Ben Jang, a portfolio manager at Nicola Wealth Management.
The latest dip reflects the company’s continued struggle to find customers for its new line of CSeries passenger jets.
Bombardier is preparing the jet to enter service after years of delays and cash problems. The stock has fallen 26 percent since the start of 2016, and closed at 99 cents Canadian on Wednesday, down 2.0 percent.
The stock is the only S&P TSX 60 component to be trading below the symbolic C$1 mark, and one of only three below that level on the S&P/TSX Composite Index.
To be a component of the composite index, a stock must have a volume weighted average price of C$1 over the prior three months and over the last three trading days of the month-end prior to the quarterly review.
The next quarterly review is due at the end of February, and will cover the period from December through February, said Tony North, who heads Canadian Index operations for S&P Dow Jones Indices.
A spokeswoman for Bombardier said the company never comments on its stock price.
Writing by Euan Rocha; editing by James Dalgleish, Richard Chang and Bernard Orr