GM’s stock increased thanks to the news about the Standard & Poor’s, which will add the company’s shares to two of its stock indexes.
The US automaker’s shares rocketed on Monday after the agency announced it will add GM shares to the S&P 500 and S&P 100, replacing H.J. Heinz, which after its blockbuster sale deal completed later this week it will not be a public company anymore. The automaker’s stock reached a 52-week high of $35.49, a short while after the market opened Tuesday, June 4th. Shares closed up 54 cents to $34.96.
The S&P 500 removed GM four years ago when the automaker filled for Chapter 11 bankruptcy. Now, with the company’s return to the index, analysts predict that GM’s stock will see a boost as its shares will be opened to a new index-based investors.
“The addition to the index is very likely to result in a positive impact for the stock given the shares that need to be purchased,” said Barclays analyst Brian Johnson.
He added that the US and Canadian governments or VEBA retiree health care trust might sell some of their GM shares to index buyers. Investors are also encouraged by the fact that the Treasury plans to sell all its GM shares by 2014 and that the automaker has seen high profit in North America.