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

Comments

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.

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.

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

Why did BlueScope Steel get pushed out of the ASX top 50?

BlueScope Steel’s recent troubles — including a reported $1 billion loss that management blamed on a strong Australian dollar and low steel prices — saw its share price slip to a historical low of 74. The company also announced a restructure that will close two factories and cut about 1,000 staff, and those woes contributed to it dropping out of the ASX top 50 during the index rebalancing.

Which company replaced BlueScope in the S&P/ASX 50 and why?

Mineral sands miner Iluka Resources entered the S&P/ASX 50. Iluka’s revenue has been boosted by China’s strong demand for zircon and rutile, with soaring zircon prices helping propel the company into the benchmark index.

What changes did the S&P/ASX rebalancing make to the ASX 200?

Standard & Poor’s rebalancing added two companies to the S&P/ASX 200 — Acrux and Qube Logistics — and removed two companies, Infigen Energy and Hills Holdings. The new weightings were set to take effect after the market close on September 16.

What happened with Qube Logistics in the index rebalancing?

Qube Logistics jumped straight into the S&P/ASX 200 from outside the 300. Qube is a logistics company chaired by Chris Corrigan, and its market capitalisation has grown to about $1.15 billion, up from roughly $200 million three years earlier, according to Baillieu industrials analyst Simon Dumaresq.

Who is Acrux and why did it make the S&P/ASX 200?

Acrux is a company that invests in pharmaceutical businesses. It posted a net profit of $57 million in the last financial year, which supported its entry into the S&P/ASX 200 during the rebalancing.

Did the rebalancing change the top 20 ASX companies?

No — there were no changes in the top 20 companies. The rebalancing mainly affected positions further down the benchmark lists, including 16 swaps within the S&P/ASX 300.

How many swaps occurred in the S&P/ASX 300 and what does that mean for investors?

The rebalancing resulted in 16 swaps in the S&P/ASX 300. For everyday investors, that typically means some index-tracking funds will rebalance their holdings, but fund managers in the article said S&P’s rebalancing generally has little effect on overall equity holdings.

Will S&P/ASX rebalancing significantly affect fund managers and equity holdings?

According to fund managers cited in the article, S&P’s periodic rebalancing tends to have little effect on broader equity holdings. While individual index-tracking funds will adjust to the new weightings, the managers suggested the overall impact on portfolios is limited.