TORONTO, Jan 28 (Reuters) - Shares of Bombardier Inc , which closed below C$1 on Wednesday for the first time since 1991, fell further on Thursday as some funds dumped shares on fears of the train and plane maker being ejected from Canada’s main index.
The stock was down 11 percent at 88 Canadian cents a share in afternoon trading on the Toronto Stock Exchange, with investors rattled by the possibility of Bombardier getting pushed off the Toronto Stock Exchange’s S&P/TSX composite index .
“Five years ago people would have waited until an index came out with its additions and deletions. Now almost every firm has a group responsible for indexes, and they pre-position prior to the exchange making changes to their constituents’ list,” said John Goldsmith, deputy head of equities at Montrusco Bolton.
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.
The slide in Bombardier shares reflected 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 snowballing costs. The stock has fallen 34 percent since the start of 2016.
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. (Reporting by Euan Rocha; Editing by Meredith Mazzilli)