PSA/Peugeot-Citroen risks being dropped from France’s CAC 40 stock market index.
The automaker’s share price dropped abruptly almost 65% in the last 12 months and the current trade is around 6.7 euro, while rival Renault’s share increased 30%. PSA’s market capitalization fell 2.4 billion euro ($3.1 billion), which would be about one fifth of Renault’s value of 11.2 billion. PSA is currently on the 77th place among the biggest French listed companies.
“Peugeot has the poorest weight in the index and is clearly at risk,” Exane BNP Paribas analyst Christophe Wakim wrote in a note on Monday. “Unless there is an exceptional ‘politically driven’ decision, Peugeot is at high risk of being deleted from the CAC 40 in September.”
Analysts believe that Belgian chemicals and plastics group Solvay could replace PSA on the CAC 40. The company is already under the country’s top 40 lists in the CAC 40 and if the automaker’s stock will drop below 6 euro its presence in the CAC would be extremely difficult to be justified. It is expected that PSA’s restructuring plan from September will help the company get back on track.
“There’s also a political dimension to this issue. It’s tricky to remove an emblematic French industrial name and replace it with a Belgian company,” said Arnaud Scarpaci of the Agilis Gestion investment fund.