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Cathay Pacific dropped from Hang Seng stock index after decades
HONG KONG's Cathay Pacific Airways is losing its decades-old membership of Hong Kong's benchmark equity gauge, the Hang Seng stock index, as the city's flagship carrier struggles to revive earnings, reports Bloomberg.
The airline, in which Qatar Airways just acquired a stake, will be dropped along with Kunlun Energy Co as part of Hang Seng Index's quarterly review. Country Garden Holdings, a Chinese property developer, and Sunny Optical Technology Group, an Apple Inc supplier, will replace them on the 50-strong measure, effective December 4.
The deletion is the latest blow for Cathay Pacific, founded in 1946, after it was removed from MSCI's Hong Kong index in May.
The airline has lost almost half its market valuation in the past seven years as the carrier battled rising competition from Chinese rivals as well as suffering ill-judged fuel hedges.
Rupert Hogg, who took over as chief executive officer this year, has been seeking to cut costs after the airline posted its biggest half-yearly loss in at least two decades.
Hong Kong conglomerate Swire Pacific is the largest shareholder with 45 per cent. Qatar Airways said it will buy 9.6 per cent from Hong Kong-based Kingboard Chemical Holdings and related companies for HK$5.16 billion (US$662 million).
Country Garden and Sunny Optical have more than doubled in the past 12 months, compared with the Hang Seng Index's 28 per cent gain. Separately, Guangzhou Automobile Group Co will be added to the Hang Seng China Enterprises Index, at the expense of China Longyuan Power Group Corp, according to the index compiler.
The airline, in which Qatar Airways just acquired a stake, will be dropped along with Kunlun Energy Co as part of Hang Seng Index's quarterly review. Country Garden Holdings, a Chinese property developer, and Sunny Optical Technology Group, an Apple Inc supplier, will replace them on the 50-strong measure, effective December 4.
The deletion is the latest blow for Cathay Pacific, founded in 1946, after it was removed from MSCI's Hong Kong index in May.
The airline has lost almost half its market valuation in the past seven years as the carrier battled rising competition from Chinese rivals as well as suffering ill-judged fuel hedges.
Rupert Hogg, who took over as chief executive officer this year, has been seeking to cut costs after the airline posted its biggest half-yearly loss in at least two decades.
Hong Kong conglomerate Swire Pacific is the largest shareholder with 45 per cent. Qatar Airways said it will buy 9.6 per cent from Hong Kong-based Kingboard Chemical Holdings and related companies for HK$5.16 billion (US$662 million).
Country Garden and Sunny Optical have more than doubled in the past 12 months, compared with the Hang Seng Index's 28 per cent gain. Separately, Guangzhou Automobile Group Co will be added to the Hang Seng China Enterprises Index, at the expense of China Longyuan Power Group Corp, according to the index compiler.
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