Peugeot's blue-chip index comeback spurs recovery
(Adds company reaction, closing share prices) By Laurence Frost PARIS, March 5 (Reuters) - PSA Peugeot Citroen will return to France's benchmark CAC-40 index, stock market operator Euronext said on Thursday, delivering a likely boost to the French carmaker as it emerges from a prolonged European sales slump and bailout. Peugeot will replace Gemalto, which had already been identified as a possible exit candidate before reports last month that millions of its mobile phone SIM cards had been hacked by U.S. and British intelligence. CAC-40 re-entry could boost Peugeot's shares - up 49 percent so far this year - by triggering automatic buying on behalf of exchange-traded and tracker funds. It may also further increase liquidity and put the carmaker firmly back on the radar for foreign investors - as well signalling to customers, staff and competitors that the company's turnaround strategy is gaining traction. "Returning to the CAC-40 will increase our international exposure, which is an important part of the plan," Peugeot spokesman Bertrand Blaise said. Spiralling losses led Peugeot to a 3 billion euro ($3.31 billion) bailout last year, in which the French government and Chinese state-controlled carmaker Dongfeng took matching 14 percent stakes in the Paris-based company. New Chief Executive Carlos Tavares, appointed during the bailout negotiations, has since begun cutting inventory, production costs and the group's model lineup in pursuit of a 2 percent operating margin by 2018. Gemalto's CAC-40 exit and Peugeot's return, after a two-and-a-half-year absence, will take effect on March 23, Euronext said. Index membership decisions reflect the size of a company's free-floating market capitalisation and trading volumes. Peugeot shares closed 2.9 percent higher in Paris ahead of the announcement, with Gemalto down 2.6 percent. ($1 = 0.9069 euros) (Editing by Geert De Clercq and William Hardy)
