Big Names Bumped From Key Indices
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The continuing woes of Retail Food Group, Myer and AMP has seen them dropped from key market indices because of the slide in their share market value in the past quarter.
The two companies were the best known of a number of changes among ASX 200 companies announced by Standard & Poor’s in the latest quarterly rebalancing of its key market measures.
The AMP’s continuing woes (all self-inflicted by the way thanks to weak management and an even weaker board) have led to the wealth management giant being removed from the Australian share market’s ASX20 index.
AMP, which has seen more than $3 billion stripped from its market value following the scandals revealed at the banking royal commission, has been replaced by global packaging company Amcor Limited.
The demotion could add even more pressure on AMP shares which last week hit a series of six year lows. the closed at $3.63 last Friday, just above the low of $3.615 the day before. The shares are down more than 30% so far this year.
The removal of the AMP and other omissions (and the additions) from the ASX20 index will be effective at the market open on June 18, 2018. Hot mid-cap stocks Afterpay Touch and Appen have been promoted to the S&P/ASX 200 Index, joining chicken processor Ingham’s Group as the winners from the June index rebalance.
Asaleo Care, Iron Mountain and Retail Food Group will be dropped from the benchmark index, S&P confirmed on Friday. Retail Food Group problems are all self-inflicted as well thanks to a flood of problems with relations with franchisees, impairments, weak demand and rising restructuring and legal costs.
The group’s shares have plummeted from around $4.40 in December to 61 cents at Friday’s close to be down more then 70% so far in 2018 and 88% in the past 12 months. And, Myer's tumbling share price has led to its removal from the ASX All Australian 200 index.
It comes after the embattled department store chain was removed from the benchmark ASX200 in March after its shares shed two thirds of their value in a year amid sluggish sales and a series of profit warnings.
The shares closed at 41 cents last Friday for a loss of 53% in the past year and 38% so far in 2018.
Hearing implant maker Cochlear will move inside the ASX 50 at the expense of Incitec Pivot which has faced a tough start to the year with dry weather cutting demand for its products Cochlear shares are up 16% so far this year and closed at $198.63 on Friday
Whitehaven Coal’s strong growth in the past year sees it move inside the ASX100 while GrainCorp drops out of the index after its profits sunk 64% for the first half of the year. Whitehaven shares ended at $5.65 on Friday and have more than doubled in the past 12 months
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.