BlueScope steeling itself for slide out of top 50 stocks

BLUESCOPE Steel's woes have pushed it out of the top 50 listed companies, making space in the index for a mining company propelled by soaring zircon prices.

By InvestSMART · 10 Sep 2011

By InvestSMART ·
10 Sep 2011

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BLUESCOPE Steel's woes have pushed it out of the top 50 listed companies, making space in the index for a mining company propelled by soaring zircon prices.

Steel maker BlueScope's share price slipped to a historical low of 74? yesterday, just weeks after it blamed the strong Australian dollar and low steel prices for a $1 billion loss.

The management announced a restructure that will close two factories and lay off 1000 staff.

Mineral sands miner Iluka Resources entered the S&P/ASX 50 because its revenue has been boosted by China's demand for zircon and rutile.

Standard & Poor's index rebalancing sees two new companies enter the benchmark 200 Acrux and Qube Logistics and two depart, Infigen Energy and Hills Holdings.

There were no changes in the top 20 companies but 16 swaps in the S&P/ASX 300.

The new weightings take effect after the market closes on September 16.

Qube has jumped straight into the 200 from outside the 300. It is a logistics company chaired by former Patrick Corporation managing director Chris Corrigan, who was behind reformation of unionised dockyards in 1998. It listed as KFM Diversified Infrastructure and Logistics Fund in 2007 and has gradually acquired a complete logistics supply-chain.

Qube's market capitalisation is now $1.15 billion up from $200 million three years ago, according to Baillieu industrials analyst Simon Dumaresq.

Acrux invests in pharmaceutical businesses and posted a net profit of $57 million last financial year.

Fund managers said S&P's rebalancing has little effect on equity holdings.

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Frequently Asked Questions about this Article…

Why did BlueScope Steel fall out of the S&P/ASX 50?

BlueScope Steel fell out of the S&P/ASX 50 after its share price dropped to a historical low (reported as 74) following a $1 billion loss the company blamed on the strong Australian dollar and low steel prices.

What restructuring measures did BlueScope announce and how might they affect shareholders?

BlueScope announced a restructure that will close two factories and lay off about 1,000 staff. Such measures often aim to cut costs and stabilise finances, but they can signal near-term challenges for the business and influence investor sentiment.

Why did Iluka Resources enter the S&P/ASX 50 and what is driving its revenue growth?

Iluka Resources entered the S&P/ASX 50 because its revenues have been boosted by strong Chinese demand for zircon and rutile, and soaring zircon prices that have helped the mineral sands miner move into the top 50.

Which companies moved into or out of the S&P/ASX 200 in the recent rebalancing?

The recent S&P/ASX rebalancing saw Acrux and Qube Logistics enter the S&P/ASX 200, while Infigen Energy and Hills Holdings departed the benchmark 200.

When do the new S&P/ASX weightings from the rebalancing take effect?

The new S&P/ASX weightings take effect after the market closes on September 16, according to the article.

What’s notable about Qube Logistics’ rise into the S&P/ASX 200?

Qube Logistics jumped straight into the S&P/ASX 200 from outside the S&P/ASX 300. Chaired by Chris Corrigan, it listed in 2007 as KFM Diversified Infrastructure and Logistics Fund and has grown its logistics supply‑chain assets. Its market capitalisation is now reported at $1.15 billion, up from $200 million three years ago.

How has Acrux performed and why did it qualify for the S&P/ASX 200?

Acrux, which invests in pharmaceutical businesses, posted a net profit of $57 million in the last financial year. That performance helped it qualify to enter the S&P/ASX 200 in the rebalancing.

Will the S&P/ASX rebalancing significantly change equity holdings for everyday investors?

Fund managers quoted in the article said the S&P/ASX rebalancing has little effect on equity holdings, suggesting the index changes are not expected to significantly alter most investors' portfolios.