PSA Peugeot Citroen, the second largest carmaker in Europe, will now make a comeback to France’s benchmark CAC-40 index, according to stock market operator Euronext, which would likely further spur the French automaker’s long overdue recovery.
Peugeot, which had a close brush with bankruptcy and had to be bailed in a 3 billion euro deal by China’s Dongfeng and the French government, has been appointed to replace Gemalto. The latter was already reported to be the exit candidate even before last month’s rumors that millions of its mobile phone SIM cards were hacked by US and British intelligence. PSA’s addition to the CAC-40 is likely to further spur the shares turnaround – which have already gained 49 percent this year – as automatic buying of exchange-traded and tracker funds could be triggered. “Returning to the CAC-40 will increase our international exposure, which is an important part of the plan,” commented Peugeot spokesman Bertrand Blaise.
After the European six-year slump in demand led to sales collapsing towards two-decade lows, the highly regional dependant PSA had to issue a share boost of 3 billion euro ($3.31 billion) – with Chinese state-controlled group Dongfeng and the French government took each a 14 percent stake in the automaker while the founding family’s stake was diluted to a matching figure. Peugeot is returning to the CAC-40 after a two-and-a-half-year absence as of March 23, Euronext – reflecting the positive size of the company’s free-floating market capitalization and trading volumes.