PSA could be rehabilitated in the eyes of investors image

After a government-assisted bailout this year and the loss of control of the founding family over PSA Peugeot Citroen, the second largest automaker in Europe could reach an important recovery milestone.

The French carmaker, now controled three ways by its Chinese partner Dongfeng, the French government and the Peugeot founding family, could return soon to a benchmark index – the CAC-40. PSA was left out of the index back in 2012, for the first time in history, as the company’s market value declined amid a six-year slump in demand that led to a two-decade low in the European region. The company’s stock managed to return to positive performances after the 3 billion euro ($4 billion) cash infusion and now the quarterly membership review of the French blue-chip index should come within weeks.

“Peugeot is the closest add candidate,” said analysts at Societe Generale.

“Peugeot’s potential re-entry would reflect the French economic landscape,” added John Plassard, deputy director of Swiss brokerage Mirabaud Securities.

The CAC-40 has overall declined 3.1% so far this year, as opposed to PSA’s shares that jumped 48% – double the increase achieved by the CAC-40 leader Orange – also making the automaker the best performer among the companies involved in the European auto business.

VIa Reuters