Heidelberg Cement likely to replace Salzgitter in DAX

(Frankfurt, Germany) — German cement maker Heidelberg Cement is the most likely candidate to join Germany’s blue chip DAX index on June 21.

Analysts said that the company, whose share price has doubled since last summer as it slashed its debt burden and the crisis-fraught construction industry recovered, is tipped to replace steel maker Salzgitter.

In addition, the sale of a majority stake in Heidelberg Cement by industrial heir Ludwig Merckle last year boosted the group’s free float, helping it meet a key criterion for entry to the index.

The revisions are especially important for index-tracking funds, whose portfolios mirror the composition of an index and which have been attracting increasing interest as investors move away from actively managed funds.

Mr Anke Platzek index analyst at LBBW said that “Due to the increased turnover, Heidelberg Cement should fulfil the Fast Entry-Rule very comfortably.”

The Fast Entry Rule allows a company to enter the index ahead of the stock exchange’s periodic review if it ranks within the 25 biggest companies both in terms of market capitalisation and turnover.

Mr Klaus Stabel ICF index expert said that Germany’s second-biggest steel maker Salzgitter, which has faced fading investor interest due to the sector crisis, is set to exit the DAX as it has the lowest market capitalisation of DAX companies.

Source: http://www.steelguru.com/news/index/MTQ4MTg2/Heidelberg_Cement_likely_to_replace_Salzgitter_in_DAX.html

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